Real Estate Association of St. Maarten RAM President Arun Jagtiani and board member Marc van der Bilt told Members of Parliament (MPs) that the cooling-off clause could be abused by both the buyer and the seller. This can happen, for example, with the buyer using that time to make (unreasonable) demands or the seller increasing prices.
Their argument is that the purchase of a house or a condo is not an "impulse buy" like timeshare weeks. A sizable investment in property is made after some careful research and review.
RAM board member David Bardfield said that while RAM believed in consumer protection and rights, the cooling-off period would "weaken the contract." Real estate purchases are "not like buying a car or timeshare," he said.
RAM believes the issue of protection for buyers and sellers would be dealt with better through regulation for real estate brokers through training and certification. This is also a sentiment of the St. Maarten Real Estate Association headed by Walter Castle.
However, Castle's group is in favour of the cooling-off period, calling it "very ethical" and on par with regulations in the United States. The time would give buyers a chance to see whether they have stretched themselves too thin financially. He said a lot of work went into a sales and purchase agreement and "everything should be cut and dried."
Mijke Martina of St. Maarten Real Estate Association added that the cooling-down period was needed because there were "a lot of people in real estate without experience." She said licensing was needed to protect the consumer.
MP Leroy de Weever (DP) said plans were underway to invite the realtors to meet with Parliament's permanent committee on regulating and certifying agents.
De Weever is fervently in favour of the cooling-off period and suggested that the three-day period be specifically stated as three working days. He was also in favour of the stipulation that only 10 per cent of a property's purchase price can be placed in escrow by the buyer, with a notary in St. Maarten. He said problems in the sector arose because too often the developer, contractor and real estate agent were the same person.
De Weever said projects could not be completed "unless the developer goes into the pocket of the client," unlike the French side, where no funds can be touched unless the project is completed or in the final stages. "We have life in London. We basically consummate the deal and sometimes collect the commission."
MP Jules James (UP), noting that two associations had indicated that nothing much could change during the cooling-off period, said there was no harm in implementing the proposal.
RAM representatives told Parliament the 10-per-cent stipulation could be applicable for pre-construction or in a construction project, but would be counterproductive for the sale of existing structures.
It has happened in the past that a buyer makes an agreement with a seller to pay much more than a 10 per cent down payment to secure a property that they would close on in a month's time. Should the 10-per-cent rule be forced through, that possibility no longer would be an option, as no seller would consider taking a property off the market for 10 per cent down and a long closing period.
For pre-construction agreements, Van der Bilt said the 10 per cent down payment would limit investment in some ways and would increase cost for buyers, because developers would be forced to obtain bank loans to carry out projects. The cost that comes with acquiring a loan would be passed on to the buyer.
One part of the draft amendment to the Civil Code that realtors and MPs agreed was positive was the stipulation that all contracts be in writing.
MP Dr. Lloyd Richardson was concerned about the sale of property with encumbrances. Castle and Martina said clients were advised to make a survey of a property prior to purchase.
MPs Frans Richardson and George Pantophlet had questions about the functioning of the real estate sector.
President of Parliament Gracita Arrindell said the hearings on this topic would continue and an amendment to the legislation would be made depending on the consensus of Parliament.
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