St. Maarten Timeshare Owners Alert....

Note to Readers:
The following letter from Rowie and Pat Percoco will be of serious interest to ALL SXM timeshare owners since it could have grave repercussions on their timeshare contracts. It is being emailed to our "Timesharing in St. Maarten Email Forum" and "St. Maarten Weekly News" readers.

Dear Timeshare Owners,

As many of you know in December Festiva Resorts/Atrium NV filed suit against 3 owners in the Sint Maarten courts. The "Summoned Parties" are Roaldo & Patricia Percoco and two other owners.

The suit by Festiva asks the Sint Maarten courts to change the terms and conditions of our Atrium lease contract. Festiva wants to remove or change a condition of our contract which pertains to the limitation of the increase in maintenance fees to the CPI of the Netherland Antilies and to implement the 10% increase in maintenance fees for the year 2007 and collection of 2 times the 2007 maintenance fee plus legal interest on the uncollected funds until the day of collection. Festiva also requests the court to change the contract so as to allow Festiva/Atrium to collect increased annual maintenance fees based on projected budgeted expenses to be based on "Real Figures" and to have an "independent accountant" check this budgeted amount each year.

In other words the increasing of our maintenance fees and or the charging of Special Assessments would be at the whim and demand of Festiva/Atrium and the current contractual controls and limitations on increases per the current contract would be null and void. This would give the Festiva/Atrium "Carte Blanche" to increase fees each and every year left in the remaining term of the contract with no oversight or recourse for the leaseholders. All of the leaseholders would be responsible for every expense past and future incurred by the Festiva/Atrium Resort operations. Any and all approved budgets would be passed on to the owners as an increase in maintenance fees or Special Assessment.

If the court rules in Festiva/Atrium favor on this proposed change to the contract the precedent would affect all owners at the Atrium and have repercussions on the entire timeshare industry in Sint Maarten.

If this suit prevails it would forever change the Festiva/Atrium contract. There is no provision in the suit for the lease-holders to have any input or controls on any expenditures or to audit or review the financial reports of the Atrium expenses or collections.

In most timeshare contracts provisions are made for the Owners Association to review and for the owners to vote Democratically on major expenses above and beyond the normal maintenance operations of the Resort. The Atrium contract clearly states the obligations of the lessor and the lessee. The lessor has to maintain the Atrium in certain conditions and has to meet the obligations of the contract.

Our obligations are clear, as lessee's we are to pay the required yearly maintenance fees linked to the CPI of the NA. Festiva bought the Atrium Resort in September 2005. The previous owners stated in previous newsletters that the Atrium was on sound financial footing and during the 2005 year had replaced all the stoves on the rear side of the building, replaced over 50% of the Kitchen and Bathroom cabinetry and extended the pool deck. The proposed 2006 improvements were to be the replacement of soft goods, replacement of bed mattresses, more sofa beds and refrigerators. In prior years the previous owner upgraded all the Ocean side stoves, over 100 AC units, Hurricane shutters for all sliding glass doors, remodeled the lobby, re finished the pool, replaced the kitchens in the studio apartments, painted the building, developed the area adjacent to the Atrium for the Buccaneer Beach bar, added the new Dock, replaced the generator in 2002, replaced the tile floors in the bathrooms, etc.

As you can see the previous owner was able to maintain and actually improve the conditions at the resort with the available funds from the maintenance fees and rentals. Festiva in 2006 published the annual newsletter to all the owners with the statement "

As you are no doubt aware, Festiva Resorts purchased the Atrium resorts and assumed management in October 2005. In the past year we have found that the resort is in need of many things and foremost the resort needs to operate on its own financially. In 2005 The Atrium resort lost more than $150,000 and is forecast to lose at least that much in 2006. Festiva has subsidized that loss to date, but we cannot continue to do so." They continue, " The overall condition of the resort is another critical area of need. Room Furnishings, exterior, electrical wiring, generators, and many other areas are in need of full refurbishment as the resort goes into its 14th year. Finally there is the issue of a reserve fund. The resort has never operated at a surplus and therefore has never been able to establish a reserve fund. A reserve fund should be set aside to provide for financial shortfalls, major renovation projects and emergency funds in case of natural disasters. As the operating budget cannot afford hurricane insurance, it is of the utmost importance that a reserve fund be established to insure that there are repair funds in case of a disaster."

This is where Festiva announces the increase in maintenance fees for 2007 of 10% plus in addition a 2 times the annual maintenance fee, Special Assessment. As the previous owner was able to maintain the Atrium in a condition to warrant RCI Gold Crown status for the past 10 years, perform many up grades to the resort and made available annually the financial reports of the resort to the owners it is difficult to comprehend the dire financial conditions described by the new owners. Festiva Resorts has stated that the financial statements would be made available to the owners on a quarterly basis, to date no documents have been made publicly available since 2006.

We urge all Atrium lease-holders to now join the litigation efforts to preserve the existing contracts. Our group of 360 lease-holders representing over 560 unit weeks are defending your rights under the current contract and we wish to expand our numbers and include you in the defense. We are now able to act as one group to defend the terms and conditions of the contract. If you need further information on this contract dispute please do not hesitate to contact me. Rowiep@aol.com If you wish to join the effort to defend the contract I need the following: A fee of $50 per unit week is requested. An email request to join the litigation, include your names, address, phone number, unit number and weeks. You will then be represented by our counsel in Sint Maarten, Ms. Monique Hofman. You will then become a litigant and be presented to the court. You will be protected by any and all court proceedings and agreements between Festiva/Atrium and the litigation group in the future. We will also place you on our email update list.

Again I urge you to contact me immediately and join the litigation group and defend your contract. If the proposed changes are ruled on by the court in favor of Festiva/Atrium you may not have any recourse in the future to protest any increases in your annual maintenance charges or demands for Special Assessments or additional fees requested by Festiva/Atrium for operations. If you know of any other Atrium owners please ask them to also get in touch with me.

Every litigant wants the Atrium to succeed as the resort we purchased. We have proposed the forming of the Atrium Owners Association with the powers all timeshare owners should have in the operations of their primary resort. Festiva and Atrium NV have refused over the past 10 years to form this association and have formed an "advisory board" with no powers but to advise. A full fledged empowered Owners Association with voting rights for all the owners would have the desire, power and means to maintain the resort to the conditions we all expect. Rowie Percoco rowiep@aol.com www.atriumowners.com