investment Archives

St Maarten (SXM) Property Auctions

Houses At Auction In St Maarten Now

If you’re planning on purchasing a house in St Maarten, I am sure you considered going to a St Maarten (SXM) auction. As a buyer, you have to consider all the channels including other St Maarten real estate listings or consulting with trusted St Maarten realtors. Auctions in St Maarten are a good way to expand your property search that could even help you snatch up a good deal if give it your due diligence. Here, we’ll be covering what goes on at a St Maarten auction, the St Maarten legal processes involved, as well as the pros and cons you may want to be aware of; specific to St Maarten real estate.

Did you know that you can get an Auction Risk Assessment Report before you buy a St Maarten auction property?
Contact Ritika our Head Broker on +1721 526-1819.
In most cases, a verbal yes/no is free of charge.
However, an in-depth study including market comparables is also available. See the Case Study below for details.

Latest Notary Auctions in St Maarten:

There are only three Notaries in St Maarten who are able to hold a auction and here are all the links to their SXM auction pages:

Notary Richards Auctions
BOEKHOUDT Auctions
Mingo Notary St.Maarten Auctions

St Maarten Auctions

Why Buy A St Maarten House On Auction

Only to get a good deal!

Remember that every property in St Maarten has been through storm damage. If the damage was neglected, the cost to repair is going to be significant when you buy a St Maarten auction property.
Usually, a property ends up in auction as last resort.
Most owners would have already approached St Maarten realtors like us before it ever reaches the auction stage.

There is no other reason you should ever buy a property in St Maarten auction unless the price is phenomenally good. In fact, The price has to be at least 50% less than the market value for you to consider. Otherwise, we would NOT RECOMMEND a St Maarten auction property.

Case Study of St Maarten Auction

For client confidentiality, the names are changed.
Danny came to us for investments. Anything really as long as there is a return.
Danny is a real estate investor in St Maarten with various business interests.
When Century21 was informed by the Notary auction that a beachfront condo is available for half the price; we urgently prepared a report for Danny.
Being experts in beachfront condos, Danny couldn’t say no when he saw our awesome report!!
The Century21 Auction Risk Assessment Report (C21ARAR) provided Danny with property rental incomes, recent nearby condo sales, re-sale values, running costs, surprise costs like condo assessments, and pictures of a similar condo in the building.
Danny would not have considered the beachfront condo without this report.
Remember Danny is only allowed to view the beachfront condo from the outside; which means Danny can only see the front door of this condo!!!
During the St Maarten auction, Danny got lucky. He was the only buyer and he won the Dutch auction easily!! Century21 was there to explain and support him during the entire auction process.
Auctions are easier with a little support!
Danny bought the property for half the price and was elated!!
Due to some delays in transferring the funds, Danny got the keys 30 days after the auction date. Usually, this is much sooner.
Unfortunately there was a major plumbing fault and the pipes had damaged tiles and structure.
Danny was ok with this because he had set aside 10% of the emergency fund in case of such eventualities. Smart because for anyone else this could have been a disaster.
Also, the ocean views were obstructed hence selling this condo will be difficult.
The condo actually cost $35,000 to repair (much more than the 10% Danny set aside!) because not only was the plumbing a problem but the kitchen had to be replaced due to neglect and bathrooms had to be re-tiled.
Danny still rents the condo on long-term and achieves 15% RETURN ON INVESTMENT on this St Maarten Auction property.
Can you believe that!
Danny also knows that when he puts the property on the market with Century21 once seven years have passed, we will sell it at approximately 80% more than the price he paid.
Full disclosure: The condo was bought for approximately $250,000. Rented for $2800 per month at 80% occupancy. The Auction Risk Assessment Report conducted by Century21 indicated a resale value of $425,000 (pre-pandemic valuation). During the pandemic, the condo sold for $375,000.
Win-Win!

St Maarten Auction Terms

Auction – The public sale of foreclosed registered properties officiated by a civil law notary, instructed by a judgment creditor or mortgagee and governed by applicable laws of the Code of Civil Procedure as well as the Civil Code.
Registered property – this is the real estate being offered up for auction, or a restricted right to a registered property for auction, the rights to which may be transferred independently.
Seller – the authorized party to provide instructions for the auction.
Bid – a bid amount that raises or decreases the bid, offered by the interested party at auction.
Bidders – the people offering bids at an auction.
Opening bid – his is the first bid to be placed after the start of the auction.
Reserve price – the minimum price of the registered property for which it is auctioned for.
Adjudication – the seller’s statement on the account and as an outcome of the auction.
Act of Command – a notarial deed in which the bidder indicates his mandatory principles.
Buyer – the party to which the adjudication is directed at.
Transfer – the legal action required to make the buyer become the party entitled to or the owner of the registered party.
Delivery – the act of surrendering ownership of the registered property to the buyer.
Special auction conditions – these are valid conditions added to or that deviate from general conditions contained in the record of the auction or deed of auction conditions; also includes information specific to the registered property.
Record of award – compiled notarial deeds that may contain any of the following: records of the auction, deed of special conditions, deed of adjudication, and act of command
Notarial statement of payment – a notarial deed certified by the civil law notary that serves as proof of receipt of the purchase price, that the seller permits discharge of the purchase price
Lender conformation auction – a type of auction In which the lender has the option to not accept a bid even if it’s the highest
Absolute auction – an auction in which the highest bidder gets the property

Things To Do Before A St Maarten Auction

Prior to attending a property SXM auction, it is critical to get a chance to eyeball the property first, just like with conventional real property sales. However, it’s rare to get a chance at inspecting an auctioned property to a level normally offered by real estate agents. If an opportunity does come up, grab it – and if possible go with real estate professionals such as appraisers, real estate agents, or contractors who can provide an accurate assessment of the property.

Properties at SXM auctions are sold as-is, and keep in mind that the property owner was unable to pay the property taxes or mortgage payments; thus it won’t come as surprise if the owner failed to put in repair works or even regular maintenance. Some property owners may have neglected the house on purpose or damaged it knowing they’ll lose it soon. Moreover, properties become vandalized or get squatted on. So, always think that if a property’s exterior doesn’t look good, it’s likely the same applies to its interior.

So, how do you not end up with the short end of the stick? First off, don’t even think about visiting the property to get a “quick peek” by going over fences or climbing windows – those are illegal.

The best course of action is to be ready to have additional money for extensive repairs if you can’t arrange for a home inspection.

It’s always best to do a bit of research prior to the actual action. Get in touch with a title search company that should let you find out if there are any existing liens or perhaps a second mortgage that you might end up being responsible for if you don’t dig deeper. In addition, make sure the property has a clean title by checking with the auction company.

There are situations where the former owner or perhaps a squatter refuses to leave the property will need to be evicted from the property – a costly, expensive, and totally unpleasant experience. Experts advise to just offer up cash to get it done and over with than endure the arduous eviction process.

If you happen to win the auction, secure a Title Insurance while in escrow or right after closing to help ensure you don’t end up with any property liens that don’t turn up during the property search.

What to remember at an auction

You must secure a guarantee or an approved financial agreement from your bank or get in touch with a notary office
Items up for bidding will be auctioned in two rounds
The first round (also called the English auction) starts with the reserved price or the minimum bid, with the notary asking for higher bids from the participants until no one bids higher
At this point, the highest bidder has not yet purchased the item unless no one bids higher in the second round
The second round (or the Dutch round) follows right after the first with the notary sets off the bidding with an amount significantly higher than the last bid from the previous round
The notary will now go lower and lower until a bidder says “Mine!”, and the bidder who does, has bought the item
An item is “unsold” if it does not get a bid in the first round
The highest bidder from the first round may say “Mine!” anytime during the second round just to ensure he/she gets the item
Saying “Mine!” is legally binding especially if you win the bid
At lender confirmation auctions, If the highest bidder gets the property, it is an absolute auction

How residential properties end up getting auctioned in St Maarten

In most cases, residential homes wind up getting auctioned because of two reasons:

Home foreclosures

In a situation where a homeowner fails to make mortgage payments within a specific period, he may go into default and result in foreclosure. If no payment is made or no renegotiation is made, the lender is allowed to put the property up for auction and make the debtor vacate the property due to non-payment. Such foreclosure action is conducted by trustees brought in by the bank.

Additional Costs To Buy A Auction Property

You are subject to the same costs as buying any other St Maarten property, sometimes more. As the buyer you will be responsible for the following:

- Transfer tax
- Fees the buyer’s account in line with auction rates
- Fee for the Act of Adjudication, Command, and Discharge
- Expenses incurred in preparation of the auction, marshal, advertising, auctioneer’s fees, appraisal, and all other costs of the auction
- Cost of the cancellation of mortgage registration and attachments
- Vacating expenses, disbursements, and revenue stamps
- Unpaid property charges and fees (if applicable).
- Expenses for special auction conditions
- Auction Risk Assessment Report

It also helps to know what fees the seller will shoulder:

- Seller account fee based on auction rates
- Opening bid premium, if applicable
- Expenses incurred, if applicable, in preparing and organizing the auction if not already set
- Expenses incurred for special auction conditions

Real Estate Laws In St Maarten

Property Acquisistion Laws In Sint Maarten

St Maarten Real Estate Law

Simple yet effective!
With a smaller economy, the volume of real estate transactions; means everything is simpler and less complicated.

Real estate laws in St. Maarten are somehow unique from the rest of the world but not unique in the Caribbean. There are many different aspects of real estate laws in St Maarten that need to be discussed in full and in-depth.

In this article, let us discuss the different real estate laws in St. Maarten and the rules that one should follow when it comes to the acquisition and transfer of real estate property.

Why is St. Maarten Considered As A Pandemic-Proof Island?

One thing that a lot of people have learned in the past year is the fact that being in the center of everything is not always a good thing.

What happened to New York will less likely happen to a place like the Bahamas or St. Maarten. The problems associated with big countries and places like London, Italy, and the United States will less likely happen in a place in the sea. This is what makes St. Maarten a property paradise that is as safe as one could get against the pandemic.

Second-home investors, property investors, and even tourists have made St. Maarten their home away from home. What makes St. Maarten a good real property investment is not just what the islands represent but the real estate laws in St. Maarten that are friendly not just to locals but to foreigners as well.

The Paradise Acquisition

St. Maarten is known for many of the things that it has to offer. Before the pandemic, St. Maarten has been considered a paradise that is primarily used for vacation and some investment. Today, families have revisited St. Maarten and discovered that it is much more than just a place for a vacation.

The good food, the friendly locals, and the real estate laws in St. Maarten are asking every single visitor to stay.

There are many reasons why real estate in St. Maarten is sought after. For those who are already sure that they want to purchase a property in St. Maarten, they can do so with the knowledge that real estate laws in St. Maarten are pretty straightforward when it comes to what they want the population to follow.

Private Property Ownership

Private property ownership in St. Maarten is often called eigendom. It means property ownership in dutch. Any legal entity and the private individual may own real estate property in St. Maarten.

As in any other place, the legal owner of the real estate property in St. Maarten has the absolute right to that property. An absolute right includes the right to freely use and enjoy the property. The absolute right also includes the right to dispose of a particular property that the owner has possession or legal ownership of.

However, the individual who wants to fully enjoy his rights as an owner may only do so by also observing all of the encumbrances and all of the other limitations set forth for the property.

Can I own real estate with others?

Yes, real estate in St. Maarten can be jointly owned. Joint ownership of the real estate in St. Maarten may occur when two or more private individuals or legal entities jointly purchase the real estate property.

In St. Maarten, the joint ownership common regulations or the beheersregeling may be created or put in place to provide for the rules that will govern the individuals.

Where is my real estate ownership recorded?

If you decide to purchase property in St. Maarten, the ownership of the real estate shall refer to and must be recorded in the public register for real estate property. The land registry in St. Maarten is called a Kadaster. It often provides an overview of the liens, mortgages, encumbrances, and all details related to land ownership in St. Maarten.

If you purchase property, the civil law notary who executes the transfer deed will have to register the new ownership in the public register for real estate property. This is primarily done to complete the transfer of ownership of property in St. Maarten. After which, the buyer is now considered as a property owner in St. Maarten.

Long Term Land Lease

For property that does not yet fully refer to one main ownership or that where ownership pertains to the government, there is a long-term land lease that is granted. A long-term land lease refers to the right of an individual to hold and use someone else’s real estate property for a fixed period. Some long-term land leases may be unlimited but this is a practice that is no longer done today.

An individual who owns the property under a long-term land lease is allowed to use the real estate property as if he was the owner of the property. There will only be a couple of limitations in the deed of a long lease.

As part of the government’s way to earn money, the real estate acquisition of individuals in St Maarten Real Estate Law, or of foreigners, through a long-term lease is required to pay a canon or an annual payment.

Is there a difference between a long-term lease and a normal lease?

Yes, there is a difference between a long-term lease in St. Maarten and a normal lease in St. Maarten. Generally, a long lease is constituted to last for a long period. The usual term of a long lease in St. Maarten is in decades.

On the other hand, for a normal lease, the long lease is a proprietary right. The right can be mortgaged as security and is just like any other normal lease.

Who grants the long-term lease in St. Maarten?

Long term lease in St Maarten Real Estate Law is granted by the government for several reasons.

First, when the government intends to regulate the use of land and prevent unlawful land use, they grant a long-term lease. This act from the government in St. Maarten aims to at least encourage those who are building houses to help those who cannot easily afford to buy land.

Another reason is that the government wants to designate persons who can take care of the real estate in St. Maarten and in turn helped the island boom further in economy and tourism.

The government’s income is also reliant on the real estate in St. Maarten. The lack of real estate tax on the Dutch side requires the government to be more crafty in creating laws that would enhance government revenue.

The long-term lease granted by the government increases the value of the land. As land value increases because of improvements placed, there are bigger and better benefits for the general interest.

Can I dispose of my long-term lease and transfer rights to others?

A long-term lease is usually granted by the government. Hence, it is still the government in St. Maarten that is the ultimate owner of the property. However, with a long lease, the lessee can use the real estate in St. Maarten and dispose of it, as if he is the ultimate owner.

There are, however, limitations as to the kind of disposition that the individual lessee can make. Applicable restrictions have been placed by the government on this end and it often depends on the right of the long-term lease agreement.

Can I terminate my long-term land lease?

Yes, you may terminate your long-term land lease. St Maarten Real Estate Law allows the lessee to terminate the long-term land lease. The lessor may also do so if the lessee fails to pay the annual payment for two consecutive years or with another severe breach of contractual obligations. The right to terminate depends on the deed of the lease.

What are the effects if I terminate my long-term land lease?

Real estate laws in St. Maarten require that if the long lease is terminated, for reason attributed to the lessor, the owner of the real estate may pay the lessee compensation for the buildings and improvements.

However, if the termination of the long-term lease is because the lessors failed to pay his annual obligations or have a breach of his contractual obligation, such responsibility may no longer be required of the lessor.

Short Term Land Lease

In the case of a short-term land lease, the land that is usually owned by the government may also be leased out for a short period. Real estate laws in St. Maarten define a short-term lease as that between one and five years. The lease may be granted for recreational or agricultural purposes.

In comparison to a long-term lease, a short-term land lease in St. Maarten is very restricted and the lessor would have more power to easily terminate the lease.

Acquisition of real estate in St. Maarten

The acquisition of real estate in St. Maarten is a strict process. While foreign ownership of land is allowed. The sale and purchase of real estate property in St. Maarten is also a strict legal process that undergoes specific local real estate laws in St. Maarten and the rules on money laundering. St. Maarten is a member of the Caribbean Financial Action Task Force on Money Laundering (CFATF) to protect the islands from the acquisition of questionable individuals tagged under the rules of anti-money laundering and terrorism financing.

Two main documentary requirements are processed in the acquisition of real estate in St. Maarten. The acquisition of real estate requires a purchase contract and a notarial transfer deed. There is a title investigation that should also be conducted before the civil law notary.

Title Investigation

The requirement of a title investigation conducted before the civil law notary has a specific purpose. The purpose of the search is to verify the details of the real estate property in St. Maarten.

Details such as the name of the real estate owner are important. The search verifies the ownership of the real estate in St. Maarten. Who has the power to dispose of the property? Is the property encumbered with a mortgage or attachments? These are important details related to the ownership.

Once all of the other details are settled, the transfer then needs to be registered in the public register for real estate property in St. Maarten. It must be concluded in writing and executed before a civil law notary.

The conditions for the acquisition and transfer of real estate property in St. Maarten are stringent. When the deed of the transfer has not been executed before a civil law notary, the agreement may be voided and nullified by the parties.

Requirement for Natural Persons

In real estate law in St. Maarten, or just about anywhere else, there are two kinds of legal personalities – the natural persons and the juridical persons. Natural persons are individuals. Juridical persons are corporations, entities, organizations that are given existence by the application of the law.

If the buyer of the real estate is a natural person, there are a few requirements. When agreeing, the buyer must be given a copy of the written agreement. He is given a reflection period of three days after the deed or its copy has been handed over to the buyer. The reflection period is given as the right of the buyer to rescind the sale agreement.

If the buyer exercises his right to rescind buying the property, the right of rescission will not arise again if the same parties enter into a new sale agreement for the same real estate property.

Documentary Requirements For The Sale Of Real Estate In St. Maarten

To aid buyers and sellers, the requirements for the sale of real estate in St. Maarten are listed and categorized in this section.

Required Documents

The transfer and purchase of real estate property in St. Maarten require the following documents:

A sign purchase agreement between the buyer and the seller of the property. This is an important document. Verbal agreements can be revoked at any moment. If you are planning to get a property in St. Maarten, you should make sure that you get a sale and purchase agreement in written form;
An appraisal report must indicate the description of the immovable property. It must mention the certificate of measurement. There must also be an appraisal of the market value that is not older than six months from the time of the transaction;
A copy of the title deed must also be included in the documentary requirements; and
The documents and information from the buyer and seller.

Compliance With Anti-Money Laundering Rules

The Anti-Money Laundering (AML) legislation for St. Maarten may be found in the National Ordinance Combating Money Laundering and the Financing of Terrorism. The rules require that the real estate agent in St. Maarten inquired into the identity of the customer and must know who is the ultimate beneficial owner of the property.

After the real estate agent in St. Maarten has entered into a business relationship, he must continue applying the rules and report any unusual transitions. He must take a risk-based approach to identify the needs and the service that he is required to submit. He must also keep his records for years after the termination of the relationship.

What does the Risk-Based Approach Mean?

A risk-based approach means that the service provider, in this case, the real estate agent in St. Maarten, creates and continues his service relationship with a customer even after the transaction has ended.

The real estate agent should apply the risk-based approach and also conduct a risk assessment that is formalized in a Customer Due Diligence (CDD). Depending on the risk, there are three different kinds of forms – the simplified, the standard, and the enhanced form.

Buying Real Estate As A Foreigner In St. Maarten

Buying real estate property as a foreigner in St. Maarten is not impossible. While many countries do not allow foreign ownership, this is allowed in St. Maarten and possible. Foreign ownership is not impossible in St. Maarten. However, rules and regulations are in place to protect the islands from being used for money laundering and terrorism financing. The process is the same as any other purchase of property on the island.

The foreign buyer would start his property search. Once he has found the perfect property, he would make an offer. On both sides of the island, there are different ways that they can get the property.

There is no need for a lawyer because a civil law notary, who is responsible for performing the title search, would give the all-clear before any other part of the transaction is commenced. The foreign buyer, whether personal or corporate, is then required to pay the notary fee. The notary will prepare the required documents and handle the buying and selling, effectively representing both the buyer and the seller.

The transactions are normally completed within a timeframe of 4 to 6 weeks. The buyer covers all of the transfer charges.

Even foreign buyers have a right to the cooling-off period where they may rescind the contract within three days from receipt of the sale and purchase agreement. Of course, this right also comes with specific limitations.

Paying For Your Real Estate Purchase in St. Maarten

Paying for your real estate purchase in St. Maarten is just as important as all of the legalities that you have to undergo to legally obtain the real estate property in St. Maarten. How do you pay for your real property in St. Maarten? There are two ways: a certified banker’s check payable to the order of the office of the notary and a wire transfer in United States dollars are two of the more important ways that you can pay for your purchase of the real estate in St. Maarten.

A bank account can be opened at the local banks and you may set them up either as a corporate resident or a personal account. The properties are then transferred following the European systems.

Other than your purchase price of the property in St. Maarten, you should also expect to pay a one-time government transfer tax of 4% in addition to the Notary’s fee. The total closing cost of the property and the transfer tax may be between 4% to 6% of the purchase price.

Since you should not expect to have any closing costs on any of the movable items or furniture, you may deduct the value of such items from the gross price. The value determines to be for the understanding of both the buyer and the seller and must be agreed upon beforehand.
What if I want to purchase property to be turned in a leased property?
If the purchase of the property that you have is to be turned into a real estate investment, you are recommended to have it named after an offshore company for more tax breaks. The notaries and trust companies in the Caribbean islands can provide you with the necessary information related to this need.

However, regardless of whether the property you have falls under any of the above categories, you should take note of the zoning requirements of the property.

Zoning requirements are different for residential use and somewhat commercial use. Ask your civil notary to look at the property and include the zoning rules in St Maarten Real Estate Law as part of the search. Tell them the specific purpose of your investment.

Buy Real Estate In St. Maarten Today

If there is one thing that the pandemic has taught all of us, it is the fact that life is short. If you have always dreamt of having property in the Caribbean, St. Maarten real estate is a good place to search.

While searching for the perfect place, keep in mind that real estate in St. Maarten is as advanced as in any other island in the Caribbean. There are condos in St. Maarten, hotels for sale in St. Maarten, and land for sale in St. Maarten that you can choose from. A destination that is as good as a permanent abode, St. Maarten is truly the best place to invest during, and even after, the pandemic.

Saint Martin or Sint Maarten: Where do I buy my property?

Saint Martin or Sint Maarten Where to Buy Property

Sint Maarten Buy My Property, Here on the island, we don’t think of our home as two different countries.

We are one island!
Created as one, always be one.

However, the reality is that we are two separate nations, two separate legal systems. And it has with time become a unique feature of this little Caribbean island in the Lesser Antilles belt.

Saint Martin, French Side:

Lovingly called the French side, it is the larger of the two islands. You find a lot more natural beauty, peace and tranquillity. However a lot of the French stay on the Dutch side for the convenience of amenities, infrastructure, business and nightlife. I am always surprised how much of the Dutch Sint Maarten is owned by the French! But there are reasons for this!

Buying real estate on French St Martin comes with higher costs and taxes. It’s like buying a property in France, the same stringent laws!

Cost and problems of buying in St Martin (French side):

Around in 10% transfer fees; which includes Notary fees and taxes.
Land and Property tax!
Capital Gains Tax at 33.5%.
Offshore companies have restrictions.
Limited planning time. Penalties if you don’t build in a certain timeframe.
Very strict building regulations and zoning.

All this seems like a negative, but if you have the resources this is an advantage. This is why the most luxurious estates are in Terres Basses on the French side. Sint Maarten Buy My Property, The restrictions give you exclusivity and prevent over development.

Read this article in the New York Times titled: House Hunting in … St. Martin.
Verifies everything I just mentioned and gives you a first-hand experience on a buyer’s perspective.

But your money doesn’t work for you as it does on Sint Maarten, the Dutch side.

Sint Maarten, Dutch Side:

The more industrious and savvy side! You will find everything on the Dutch side. Over two hundred restaurants, casinos, nightclubs (strip clubs too!) and everything else that comes attached to an active nightlife!

If you live in Saint Martin (French side) you will find yourself spending most of your nights on the Dutch side. Sint Maarten has a vibe and everyone loves it!

Of course, Sint Maarten is a real estate paradise. Even the French buy more on the Dutch side than on the French side. Not only are the laws more favourable, you actually have a very high turnaround of real estate.

Buying on Sint Maarten (Dutch side):

6% in transfer fees; which includes Notary and transfer fees.
No land taxes!
No Capital Gains Tax!
Easily obtain building permits and favourable zoning restrictions.
Investors are given the red carpet treatment.
You can buy a property within a few weeks!

Where do I buy my home? Sint Maarten or Saint Maarten?

If you are looking to make money from your real estate, the Dutch Sint Maarten gives you a lot more advantages than French Saint Martin.

Long term rents are much higher in Sint Maarten (Dutch), so your return on investment is better. Short term rates are attractive on both sides of this Caribbean island.

90% of investors buy on Sint Maarten, including the French themselves! Especially locations close to the French borders: Cole Bay and Oyster Pond.

To make it easier for you to find your next investment I have created a page just for the latest real estate investment in Sint Maarten.

I know you have more specific questions, so just message me using the contact form or email me on info@c21sxm.com. To make it easier, I am now available anytime on Whatsapp number +1721 526 1819.

Thank you for reading, looking forward to working with you soon.