Published On: Wed, Oct 11th, 2023

Real estate agents advertised Carbon Grove despite warning signals

A report from our Correspondent

PHILIPSBURG — Long after problems started piling up for Carbon Acquisition Group (CAG) doing business as Melbon Enterprises NV, and media reports surfaced about the Court ruling in favor of clients who demanded delivery of apartments or deposits to be returned to them, several real estate agents on St. Maarten kept advertising Carbon Grove residences. Marketing and sales continued while the hillside plot and all structures on it were encumbered with mortgage from CIBC FirstCaribbean International Bank.

The first sales agreements for apartments and townhouses in Carbon Grove in Cole Bay were signed in 2016.  Construction of the project was scheduled to commence in May 2017 and conclude in May 2019. There was an additional six-month grace period included in the contract, after which “developer will be charged a penalty fee bearing 5% of the purchase price of the unit, for each additional month that completion is late.”

What buyers could not foresee, is that the Carbon Grove development would remain undivided, which meant they could not obtain a title to their unit. Although they had a sales agreement, and proof of full payment or down payment, buyers enjoyed no legal rights under law towards the ownership and possession of the property.

Only on November 13, 2020, CAG’s CEO Dwain Carbon had a ‘Deed of subdivision into apartment rights’ executed by notarial deed, on the basis of which the plot described in 121 apartment rights was split across buildings A, B, C, D, E, F, G, H, and I. This allowed for the right of ownership for each of the units to be transferred by notarial deed. However, the subdivision into apartment rights had been deeded after CIBC FirstCaribbean bank had granted Carbon a $7,5-million-dollar mortgage for the entire project.

A woman who had invested in Carbon Grove in 2017, and had not received the keys four years later, took CAG/Melbon to Court on September 13, 2021. Dwain Carbon represented himself during the hearing of the lawsuit. He did not contest that the lady had bought an apartment and a townhouse, on April 20, 2017, and on April 28, 2017, respectively. The purchase prices were US$150,000.00 and US$325,000.00. She had paid for the apartment in full and had made a $46,400.00 deposit on the townhouse.

The plaintiff requested the Court to order Carbon to deliver units B-1 and G-1. She also asked the judge to determine that the judgment replaces the notarial deed of delivery of these units.

In a previous lawsuit, in September 2020, the woman had already been ruled in favor of Carbon’s obligation to comply with the purchase agreements. Carbon remained in default and forfeited $250,000.00 in penalties, as well as a fine of up to $308,750.00. The ownership of the properties could not be transferred because the subdivision into apartment rights had not yet been executed by the notary.

The judge ruled again on October 22, 2021. “It has now been established that the plot with measurement certificate 071/2017 has been split and that therefore both apartment B-1 and the townhouse apartment G-1 can be delivered. Nothing stands in the way of the conviction to comply with the purchase agreements for both apartment rights.”

Melbon was ordered to deliver the apartment rights within seven days. However, the judge informed that Carbon could not be ordered to “deliver the unencumbered ownership of the apartment rights: after all, the plot described in measurement letter 071/2017 was subject to a mortgage right from FirstCaribbean International Bank at the time of the demerger so that after division, each apartment right will be subject to this mortgage for the entire debt of Melbon to FirstCaribbean.”

Notwithstanding civil proceedings from numerous CAG clients in 2020 and 2021, real estate agents continued to advertise Carbon Grove. On September 1, 2020, an Ire Team representative posted pictures in the Buy Sell Rent SXM Facebook group, and wrote: “The perfect opportunity for first time buyers or investment property is here. This condo is located in Carbon Grove in Cole Bay. Brand new unit.” The sales agent claimed there was only one unit left for sale. “If you have a pre-approval or funds ready for a deposit don’t miss out on this.” At the time of the post, a buyer would not be able to obtain a title to the unit.

Another google search shows a post from Century 21, on October 19, 2021. It reads: “We present to you a new two-bedroom, two-bathroom condo with views of the Caribbean ocean over Simpson Bay lagoon. The sunsets are divine.” The price is listed as $215.000. “Comes with a deed”, the sales agent stated, without mentioning that the unit is encumbered with a mortgage. The post does mention that this particular unit was rented out while being advertised for sale.

The Century 21 agent announced that Carbon Grove will be a gated community. “The perimeter fencing will be of rock walls attractively designed to lend to the aesthetics of the community. The common areas which provide for traffic and landscaping will be maintained by the developer, through the homeowner’s association, whose work will be funded by a $150 per month fee in the case of the condos and $300 per month in the case of the townhouses.”

Clients of Carbon, who were able to obtain a deed after November 13, 2020, automatically became members of the homeowner’s association, of which Dwain Carbon is president. The developer has done no landscaping since; the site looks neglected.


Related articles:
Carbon’s duped clients to hold town hall meeting; seeking justice
CIBC FirstCaribbean criticized for inadequate supervision of Carbon Grove project