How will Indigo Green be managed?

FREQUENTLY ASKED QUESTIONS

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ABOUT THE FOUNDATIONS

There are a number of different foundations at Indigo Bay, which Owners will be required to become participants in depending on the location of their property. Why are there multiple foundations?

The Indigo Bay Master Foundation (“IBMF”) is the homeowners' Foundation representing the entire Indigo Bay Estates development. The IBMF will manage all issues that are common to all areas of Indigo Bay, while the different Sub-Foundations will manage the particular needs and features of the different neighborhoods.

Therefore, in addition to the IBMF, several Sub-Foundations have been established. These include:

The Indigo Bay Sunset Villas Foundation,
The Indigo Bay Skyline Foundation,
The Indigo Bay Oceans Foundation and
The Indigo Green Foundation.

As the overall Indigo Bay community matures, additional Sub-Foundations will be formed to provide a cohesive set of rules and regulations related to the intended developments and the Indigo Bay Estates Master Foundation. Owners will be required to be a participant in both the IBMF and their respective Sub-Foundation.

What is the difference between a foundation and a homeowners’ association?

The Owners at Indigo Bay Estates are organized in and represented by “Foundations”, rather than “Associations”.

Participation in the Foundations is mandatory, whereas under Dutch law, membership in Home Owner Associations (HOA) traditionally has a more voluntary character.

One of the few exceptions to this is in the case of condominiums, which under Dutch law is referred to as "Right of Apartment". In such cases, the membership in the Homeowners' Association is mandatory and binding.

The Foundation structure was required to make sure that all the Owners in Indigo Bay Estates will become and remain “Participants” and as such financial contributors in terms of carrying a prorated portion of the annual Long Lease Rent, as well as other dues & assessments (including “Maintenance Fees”). In summary, Foundations provide more stability and security than associations do.

ABOUT THE LONG-TERM LAND LEASE

Is Indigo Bay on Leased Land?

Yes, like so much of the Dutch side of Sint Maarten, all of Indigo Bay is being developed on leased land. The long-term lease entered into in 1989 with Bell Realty Corporation N.V.

The duration of the lease is for an initial term of 99 years and provides for a 51-year extension option. Since the option has already been exercised and recognized by the landlord, the lease currently ends in the year 2139.

How much is the Long Lease land rent?

The current annual Long Lease land rent is approximately US $0.60 per square meter (or US$0.06 per square foot) and will remain the same from 2012 until 2018.

For Owners in Indigo Green, this averages about $210 per year per residence. Of course this will vary with the size of each residence.

From 2019 to 2028, the annual Long Lease Rent will be increased by 10% - i.e. from $0.60 to approximately $0.66 per square meter.

For the next 49 years from 2029 to 2088, the annual Long Lease Rent will remain at approximately $0.72 square meter.

Who collects the fees related to the Long Lease land rent?

The Sub-Foundations collect from Owners (also called “Participants”) the following:
1. Prorated Annual Long Lease Rent due Lessor (Bell Realty Corporation N.V.)
2. Prorated Dues & Assessments due IBMF
3. Prorated Dues & Assessments due the respective Sub-Foundations

The Sub-Foundations shall pass on to the IBMF the prorated Annual Long Lease Rent and dues and assessments due the IBMF collected from Participants. The IBMF subsequently pays the Annual Long Lease Rent and expenses incurred by the overall development.

From the remaining dues and assessments collected, the Sub-Foundations pay expenses attributed to services incurred for the benefit of Participants in each respective development only. These expenses include - but are not limited to – security, infrastructure upkeep and repairs, landscaping maintenance etc. within that specific development.

How will the Long Lease land rent be allocated?

The Long Lease land rent for each Sub-Foundation will be calculated based on the total land area of each Sub-Foundation.

How this rent is allocated within each Sub-Foundation will vary depending on what is built within (i.e. single family homes, multifamily developments; condominiums; office, retail and resorts). Therefore, allocations may be done differently between the Sub-Foundations to the extent the property developed within such foundation differs.
The entire land area encompassed by the Indigo Green Foundation (including its common areas) will be used to calculate the Long Lease rent due, and the Indigo Green Foundation will be responsible for including such rent in its budget and allocating such costs amongst its participants.
Within the Indigo Green Foundation, the allocation will vary based upon the type of residential units constructed – villas or condominiums.
The long lease payment due from each Owner will be prorated for the year in which the Owner closes on the unit.

Since the Long Lease is paid by the IBMF, who has been paying for it?

The Master Developer has been paying the annual Long Lease Rent and has agreed to pay it for 2013. As of 2014, the prorated annual Long Lease Rent will be calculated and invoiced to the Participants.

For Indigo Green residents, the annual Long Lease Rent for 2015 will be paid by Indigo Green Development B.V.

ABOUT THE INITIAL CAPITAL CONTIBUTION

Why do Buyers have to pay a Foundation deposit at closing and what happens to it?

All Buyers at the “Closing” (i.e. the legal notarial transfer of property) are required to pay a deposit (which varies in each sub-foundation) in escrow with the “Closing Agent” (i.e. the licensed Civil Notary in Sint Maarten in charge of the Closing) towards prorated Long Lease Rent and Foundation Dues that will need to be collected by the Sub-Foundations from all Participants. Such funds will be used by each Foundation as initial capital to fund its start-up expenses such as insurance, maintenance products and equipment and in some cases, furniture, tools or vehicles.

What happens in the case of Indigo Green?

At Indigo Green, this deposit is referred to as the "Initial Capital Contribution". Since the Indigo Green Foundation's bank account was put in place, these funds are released by the Closing Agent after Closing.

These funds are then used by the Indigo Green Foundation as initial capital to fund its start-up expenses such as insurance, maintenance products and equipment, as well as the purchase of the foundation's pool, gym, office and security furniture, maintenance equipment, tools and vehicles if any.

ABOUT THE MAINTENANCE FEES

How are the Maintenance Fees determined?

The annual budget for the IBMF will be voted on in an Annual Meeting of Participants to be held in December of each year. The first Meeting of Participants for IBMF took place on March 1st of 2015 and has been or will be held once a year thereafter as determined by its Board.

The annual budget for the Indigo Green Foundations will be voted on by its Board after consultation with its Participants at its Annual Meeting to take place in 2017 and to be held once a year thereafter as determined by its Board.

The Sub-Foundation meetings are expected to be scheduled after the IBMF passes its budget for the following year since the IBMF fees will need to be included in the Sub-foundations’ budgets for same period.

What Monthly Maintenance Fees will be charged to the Participants?

The Maintenance Fees (also called “Foundation Dues”) will be payable by the Participants in advance on a quarterly basis, based on annual budgets for the fiscal year (or in the case of the last quarter the dues may be based on all or part of the following fiscal year). The budget of the IBMF is presented by its Board.

Does this mean that an Owner will need to pay fees to the IBMF, and the Indigo Green Foundation, on top of paying the Long Lease rent?

Yes and No. The Indigo Green Foundation shall incorporate the IBMF dues (which already include the Long Lease rent) into its own budget and submit its budget for consultation to their Participants (the Owners) prior to the budget’s ratification by its Board at the Annual Meeting to be held in December of each year.

For example, this budget will include provisions for the following:

The cost of services rendered by the Foundation;
The cost of maintenance of common grounds, roads and other infrastructure and facilities that have been or maybe transferred or entrusted to the Foundation;
Other costs of the Foundation to be reasonably expected.

How will the Maintenance Dues be allocated?

The prorated contribution of each Participant towards the overall Maintenance Dues and assessments charged by IBMF and the Sub-Foundations per approved budgets shall be based on different calculations varying per Sub-Foundation.

As an example, the allocation of expenses for condominium, retail, office and resort developments may differ from the residential allocations. The residential assessments will generally be allocated based upon the prorata share of the total land area of the Owner’s lot plus the interior area of the Owner’s unit, although one needs to look at each Sub-Foundation to clarify this.

How will the Maintenance Dues at Indigo Green be allocated?

Within Indigo Green an Owner’s Share of the Indigo Green Foundation Dues and special assessments shall be calculated by taking the Owner’s combined surface area of interior space of his Residence and lot (together the “Owner’s Area”) and dividing it by the total of all Owner’s Area of all Residences, where:

a. in regards to a Villa, the Owner’s Area is equal to the sum of:

i. the square meter area of the Owner’s Villa Lot and
ii. the square meter area of the interior floors of the Owner’s Villa; such area to include the thickness of the exterior walls and exclude outdoor (covered or uncovered) patios, balconies and terraces;

b. in regards to a Condominium, the Owner’s Area is equal to:

i. the sum of:

⁃ the square meter area of the Condominium Lot upon which the Condominium Building is erected; and
⁃ the total square meter area of the interior of all Condominium Units in the Condominium Building; such area to include the thickness of the exterior walls and exclude outdoor (covered) patios, balconies and terraces;

ii. multiplied by the Owners’ percentage of the dues and assessments such Owner is responsible for according to the homeowners’ association of the Condominium Building in which his Condominium Unit is located.

Starting when do Owners need to pay Maintenance Dues?

Indigo Green Development B.V. as developer of Indigo Green has agreed to waive the 2015 and 2016 Maintenance Dues and other dues and assessments. The expenses have only been invoiced to owners from January 2017 going forward.

As the community is still under construction, individual Owners will only be assessed dues once their villa or condo is completed and serviced as more clearly defined by the Board.

ABOUT THE CONDOMINIUMS

Will be condominiums also be part of the IG Foundation?

Yes. The Indigo Green Foundation will also include the condominiums in the sense that the condominium owners will also be participants in the Indigo Green Foundation, and the Indigo Green Foundation will provide the same services for the condominium Owners.

However, as required under Dutch law, the condominium units, their parking spaces, and the condominium building's common areas will be managed by a condominium homeowners association.

What will be the purpose of such a condominium homeowners association?

Since each villa owner will be individually responsible for the insurance and long-term maintenance of his villa, while the condominium buildings need such expenses to be taken care of in common, it would not be fair to put such expenses in the Indigo Green Foundation.

Therefore, all expenses that are common to all Owners (such as the community swimming pools, landscaping, security, the irrigation and sewage system, street maintenance) will be taken care of by the Indigo Green Foundation. However, expenses that are unique to the condominium buildings will be taken care of by such buildings' homeowners association.

What will be included in the Maintenance Dues of the condominiums?

The Maintenance Dues of the condominiums may include their owners pro rata share of the Indigo Green Foundation's Maintenance Dues, or these may be invoiced separately by the Indigo Green Foundation, as will be determined from time to time by its board.

To this will be added the expenses to maintain the portions of their buildings that are not privately held, the general insurance of their buildings, and provisions for long-term capital maintenance expenses such as the replacement of their roofs and the repainting the exterior of their buildings.

This approach will allow condominium owners to make one single quarterly Maintenance Fee payment, which will include their condominium building's expenses, the Indigo Green Foundation expenses, the IBMF Maintenance Fees and the Long Lease land rent.

How will be Owners of the condominiums own their property? Is it like a "co-op" or what is known as a "condominium" in the US?

Under Dutch law, it is neither of those approaches. This form of ownership is referred to in English is the "Right of Apartment".

Under such legislation, the buildings are owned by a homeowners association. In turn, this association is owned by the Owners of the various units, in proportions that relate to the relative size of the interior of their units.

The Owners own the exclusive use of the interior of their unit (the Right of Apartment), yet in the Dutch system, they still enjoy the full authority to sell, mortgage or pledge their unit.

ABOUT VOTING

How are voting rights allocated within each Foundation?

The way the number of voting rights are allocated will also vary per Sub-Foundation based upon the type of developments constructed within each sub-foundation. In many sub-foundations the voting rights will be allocated in the same manner as the maintenance assessments.

How are voting rights allocated within the Indigo Green Foundation?

Within Indigo Green, the voting rights will be equal for each residence. There shall be one indivisible vote per villa or condominium owned within Indigo Green.

Will voting rights allocations change for the IBMF?

For the IBMF, the percentage of votes will vary from year to year based on how many dwelling have been completed within the development. Therefore, as the number of dwellings increases, the percentage each other Owner's vote represents shall diminish.

The number of Owners eligible to vote shall be established in a resolution of the Boards of each Sub-Foundation based on its updated Participant roster. This voting schedule shall be issued prior to each annual meeting.

When did the first Board election to the IBMF and the Sub-Foundations take place?

The first Board elections for IBMF took place in 2015. As this and future boards' term expire, all Owners will receive an advance notice of this meeting.

The first Board meetings of the various Sub-Foundations will take place within 12 months of the forming each Sub-Foundation.

Prior to such elections, the Master Developer and each Sub-Foundation's Developer will take decisions on behalf of their respective Foundations.

ABOUT THE RULES AND DOCUMENTATION

What rules and regulations affect the use of my residence and/or property?

There are several documents that affect each property, depending in which Sub-Foundation they are located.

As of this writing, the documents affecting Indigo Green are as follows:

Declarations. The general articles of formation of the IBMF and the Indigo Green Foundation are the main document giving purpose and regulating each foundation. They address many issues and should be read and understood by each Owner.
CBRUP or PBRUP. The Community Building Regulations and Usage Prescriptions detail many rules related to construction and usage of buildings within Indigo Green. Such rules are usually provided for in each Foundation’s respective documents, also called Project Building Regulations and Usage Prescriptions.
Bylaws. For Indigo Green and several other Sub-Foundations, its rules of procedures concerning the governance of the Foundation can be found in its General Bylaws.
Rules and Regulations. Finally, additional rules and regulations governing what the Owners (and those allowed on the property by the Owners) may or may not do may be passed the boards of each Sub-Foundation in accordance with such Foundation’s documents.

Other regulations imposed as general covenants by the IBMF may also be passed by the IBMF board as provided for in the IBMF Foundation documents.

Who determines the rules and regulations that affect the Owner's use of his residence and/or property?

There is already an extensive set of documents regulating the operation of the IBMF and of the Indigo Green Foundation. Please consult the following documents:

The Indigo Green Foundation Declaration;
The Indigo Green Foundation General Bylaws;
The Indigo Green Foundation Rules and Regulations;
The Indigo Green Community Building Regulations and Usage Prescriptions (CBRUP);
The Indigo Bay Master Foundation Declaration.

These documents may be amended from time to time as provided in the various documents.

Most of these documents can be found on the following website www.IGF.SX

ABOUT RENTING

Can an Owner lease his residence?

Within Indigo Green, it is quite possible for an Owner to lease his residence for extended leases.

In fact, it is quite common in Sint Maarten for people having signed multi-year work contracts with Sint Maarten employers to seek two and three year leases to house their families.

Can an Owner rent his residence as a vacation rental?

Within Indigo Green, it is also possible for an Owner to rent his residence as a short-term vacation rental.

Thanks to the advent of the Internet, vacation trends are in fact changing, as the Web makes it easier for Owners to offer their properties for rent, and for vacationers to find such available properties.

Will there be any restrictions?

While at this time the Foundation does not impose restrictions on such seasonal rental or longer-term leases, the tenants shall be bound to abide by the various rules and regulations set forth in the governing documentation of Indigo Green.

Although no system has yet been adopted, once Indigo Green becomes a gated property, access will also need to be coordinated for any such renters.

What should an Owner be planning as a rental?

When considering renting a property from abroad, there are several issues to consider depending on whether the property is to be leased short-term as a furnished vacation rental, or on an annual furnished or unfurnished basis:

Leasing Management – i.e. promoting, advertising, rental negotiation, and possibly rent collection;
Guest Management – for vacation rentals, there is also greeting the guests, presentation of the property, handing of the keys, housekeeping, check-out, damage inspections, etc.
Property Management – depending on the amenities, there are regular services such as pool service, landscaping maintenance and property cleaning and there are sporadic services such as when an appliance fails, a window breaks, or a pipe leaks.

How can an Owner go about finding assistance to generate income from his Residence at Indigo Green?

There are several websites today that specialize in helping Owners promote their vacation rentals.

There are many brokers and property managers in Sint Maarten that can offer all or part of these services as it may suit each Owner.

The team at Indigo Green can help guide you to such service providers.

HOW WILL INDIGO GREEN BE MANAGED?

THE FOUNDATIONS

Their Purpose and Responsibilies

INDIGO BAY MASTER FOUNDATION

INDIGO GREEN FOUNDATION

FREQUENTLY ASKED QUESTIONS

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