Case law

  • Case Details
    • National ID: 09/01062
    • Member State: Netherlands
    • Common Name:X v. Akgi Royal Palm CVOA
    • Decision type: Other
    • Decision date: 11/02/2011
    • Court: Hoge Raad (Supreme court)
    • Subject:
    • Plaintiff:
    • Defendant:
    • Keywords:
  • Directive Articles
    Timeshare Directive, Article 2
  • Headnote
    Unclear character of a contract: rent or timeshare. Whether a contract may qualify as a rent contract cannot be answered in general. The decisive factor is whether under the given circumstances at the moment of conclusion of the contract parties intended to conclude a rent contract and formulated it as such. Timeshare contract in this case may not be seen as a rent contract.
  • Facts
    Consumers concluded on the 26th of April 1989 a “lease agreement” with Royal Palm Beach Club by Pelican Resorts NV. On the basis of this agreement consumers had a right to occupy and use a unit identified in the contract for the agreed price until the end of the year 2988, under the rules of the Royal Palm Beach Club Tenants Association. The unit was located in St. Maarten, the Dutch Antilles. Subsequently, two other lease agreements were concluded between the parties for different units. Following conclusion of the lease agreements, the parties agreed that all units would be permanently place in the rental pool of the Royal Palm Beach Club and that parties would share the proceeds of renting these units. Consumers were guaranteed a certain amount of yearly profits during a few years. Moreover, after a period of a few years the units were supposed to be repurchased by Royal Palm Beach Club for the same purchase price. On the 31st of July 1989 Pelican Beach Resort NV (PBR) placed a mortgage on the land it owned, including on which the units were placed. The mortgage act mentions the existing timesharing rights that need to be respected. On the 23rd of May 1995 AKGI Royal Palm CVOA took over the right to the mortgage of the PBR and since the loan that was guaranteed by this mortgage could not be paid back, they proceeded in July with claiming this land. In August 1996 AKGI Sint Maarten NV became the owner of the land, which further was transferred to Saint Maarten Title Limited in March 2004. Consumers claimed that they had rented these three units and demanded that AKGI respected their rental or timesharing rights, including the right from art. 7A:1593 BW to have a rental contract taken over by a new landlord of an immovable property. AKGI claimed that the concluded contracts concerned investing and were neither rental nor regular timeshare contracts. One of the issues raised was whether there was a timeshare or rental contract concluded between the parties
  • Legal issue
    Pursuant to art. 7:48a BW implementing art. 2 Directive a timeshare contract should be concluded for at least three years, and consumers should have the right to use the apartments for at least a week a year. Under the circumstances of the case the consumers had a right to use the apartment for the whole year, which does not really fit under the label ‘time-share’. Whether a contract may qualify as a rental contract cannot be answered in general, however, the fact that consumers concluded it for a very long time (999 years) does not in itself prohibits labelling it as a rental contract. The decisive factor is whether under the given circumstances at the moment of conclusion of the contract parties intended to conclude a rental contract and formulated it as such. The contract in this case may not be seen as a rental contract, taken into account that facts of the case show little aspects of a rental relationship between parties.
  • Decision

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