General Conditions for Foreclosure Auctions

DEFINITIONS

In these General Auction Conditions for Execution Sales (“AVVE”), the following is meant by:

1. AUCTION

The execution sale of property subject to registration in public before C.A. Tromp LL.M., her successor, substitute or deputy (also to be referred to as the civil-law notary hereinafter), on instructions of a mortgagee, attaching party or judgment creditor by court order.

2. PROPERTY SUBJECT TO REGISTRATION

The object to be sold by execution sale as referred to in Article 3:10 Civil Code of Aruba. In deviation from Article 3:10 Civil Code of Aruba, property subject to registration also means the membership of an association or cooperative association, giving the right to exclusive use of a property subject to registration and the movable objects present in or on the property subject to registration that the seller has the right to sell together with the property subject to registration in accordance with the rules applicable to a mortgage.
It does not mean a registered ship or aircraft.

3. SELLER

The party/parties on whose instructions the auction takes place and who is/are authorized to give this instruction by virtue of any right.

4. BID

Each amount bid by an interested party at the auction, either an ascending bid or a descending bid, which is acknowledged as such.

5. BIDDER

The party bidding at the auction, irrespective of whether he does so with an ascending bid or a descending bid, as well as the party who makes a private bid.

6. PARTY MAKING THE HIGHEST BID

The party who has made the highest bid acknowledged as such in an ascending-bid session.

7. OPENING BID

The highest bid made in an ascending-bid session and acknowledged as such.

8. GUIDE PRICE

The minimum amount for which the property subject to registration is put up for auction.

9. AMOUNT DESCENDING BID

The amount at which the bidder bids in a descending-bid session.

10. AWARD

The notice of the seller to the civil-law notary that the seller has accepted the bid, so that the purchase agreement between the seller and the buyer is realized as a result of the auction.

11. DEED OF MANDATE

The notarial deed in which the bidder mentions his principal(s).

12. BUYER

The party to whom the property is awarded and with whom a purchase agreement has consequently been concluded in the context of the execution sale.

13. PURCHASE PRICE

The bid for which the property is awarded or the private bid that is accepted.

14. TRANSFER

The legal act necessary to let the buyer become owner of or titleholder to the property subject to registration.

15. DELIVERY

Letting the buyer take possession of the property subject to registration.

16. SPECIAL AUCTION CONDITIONS

The provisions applicable in addition to, supplementary to, or in deviation from these general auction conditions, mentioned in the deed of adoption of auction conditions.

17. RECORD OF AWARD

A set of notarial deeds consisting of the individual deed of special conditions, if any, the record(s) of the ascending bid and the descending bid, of the deed of award, if any, and of the deed of mandate, if any.

18. DEED OF DISCHARGE

The notarial deed in which the civil-law notary certifies that the purchase price has been received and the seller grants the buyer discharge for the payment of the purchase price.

ARTICLE 1. PROPERTY SUBJECT TO REGISTRATION

1. The seller is required to describe the property subject to registration in the special auction conditions in the way customary in legal transactions, if possible stating or referring to those particulars that also determine the content of the property or the right as offered at the auction.

2. The description of a restricted right shall also contain at least the statement of or reference to the deed of creation, and any deeds of amendment or supplementary deed later registered in the public registers, the valid designated use of the right under civil law, the duration of that right, and the possibility, if any, of early termination and of extension.

3. The description of an apartment right shall also contain at least the statement of or reference to the applicable property division regulations.

4. The property subject to registration is sold as such in the condition it is in at the time of the sale without any indemnity and entirely to the debit and the credit of the buyer without any guarantee of the seller with regard to anything relating to the property subject to registration, with all benefits and burdens attached thereto, special conditions, obligations, perpetual clauses, restricted rights, dominant easements, and qualitative and personal obligations, that are accepted by the buyer, if necessary. The conditions, burdens, and restrictions ensuing from these documents are explicitly acknowledged, observed, and/or imposed on third parties by the buyer.

ARTICLE 2. ORGANIZATION OF THE AUCTION

1. The civil-law notary is responsible for the organization, preparation and entire execution of the auction.

2. The civil-law notary will announce the auction and auction conditions.

3. On request, the civil-law notary informs the interested parties before the bidding begins in the best possible way of the liability of the buyer to pay taxes, costs and charges that are for account of the buyer.

4. During the session the civil-law notary is authorized, also without stating reasons:

5. The civil-law notary will determine whether during the bidding such a mistake has been made that in the opinion of the civil-law notary the bidder cannot be compelled to adhere to his bid.

6. The opinion of the civil-law notary on all that takes place during the auction and on the interpretation or application of the auction conditions during the session will be decisive.

7. If private bids are made to the civil-law notary in accordance with the law, the civil-law notary will promptly forward a copy of the document containing this bid to the seller.

ARTICLE 3. AUCTION METHOD

1. The auction takes place in two phases:

This takes place successively in one session, unless the special auction conditions deviate from this.

2. The bidding with an ascending bid takes place in a clearly noticeable way.

3. Unless determined differently by the civil-law notary, the bidding will begin with the opening bid and subsequently with bids in round sums of one thousand Aruban florins (Afl. 1,000.00) or a multiple hereof above the opening bid.

The bidding with a descending bid session will take place in round sums of one thousand Aruban florins (Afl. 1,000.00) or a multiple hereof, unless determined differently by the civil-law notary.

4. It is exclusively at the discretion of the seller whether or not an opening bid is used.

5. The bidding with a descending bid takes place orally by calling the word “mine” when the civil-law notary calls the amount.

6. If several persons make the highest bid simultaneously, they will immediately bid additionally with an ascending bid. If these persons do not bid at this additional auction, during the session the highest bidder will be designated by lot before the civil-law notary.

7. The amount at which someone calls mine in a descending-bid session is considered to be the highest bid. This bid shall exceed the opening bid. If nobody calls mine, the opening bid is considered to be the highest bid.

ARTICLE 4. BID

1. Each bid is unconditional, irrevocable, and without any reservation.

2. If several persons make a bid or buy together, they are jointly and severally bound and liable to pay the purchase price and costs, and to observe all other obligations ensuing from this sale for the buyer.

3. A bid is no longer in effect as soon as:

However, the highest bid in an ascending-bid session or a descending-bid session remains in effect until the end of the consideration, unless the property is awarded to another party or it has been established that it will not be awarded earlier.

4. The judgment creditor has the right to refuse each bid without stating reasons and to accept a previous bidder, while every bidder is compelled to adhere to his bid until the end of the auction, without prejudice to the right of the judgment creditor to then proceed to a new auction immediately.

5. Each bidder at the auction shall submit a declaration of intention or other security issued by a financial institution to the seller –on his request and to his satisfaction– which explicitly shows that he is able to fully and unconditionally pay the purchase price and costs and taxes as referred to in Article 7, with due observance of the terms (of payment) applicable to the auction.

6. If the highest bidder does not promptly comply with the declaration of intention or other security required, the judgment creditor may decide that the bid will be cancelled and the bid of the previous bidder will be accepted, or a new auction will take place, at the discretion of the judgment creditor.

ARTICLE 5. BIDDING FOR A THIRD PARTY

1. The party bidding at an auction is qualified as bidder, also if he states not to have made a bid for himself.

2. The highest bidder, also without explicitly having reserved this right, has the right to state in conformity with the provision in paragraph 3 hereinafter that he has made the bid on behalf of one third party or more third parties, which third party/parties will be referred to hereinafter as “principal”.

3. The bidder shall make this statement to the civil-law notary before the payment of the purchase price, and it shall be confirmed by the principal in writing. This statement and confirmation shall be evidenced by a deed of mandate, to be drawn up for this purpose by the civil-law notary, so that the principal will succeed to the rights and obligations of the bidder under the terms of the auction, as if he has made the bid himself, without prejudice to the provision hereinafter in paragraph 4.

4. Beside the principal, the bidder is jointly and severally liable for the payment of the purchase price and costs, and in general for the compliance with every obligation ensuing from the auction.

ARTICLE 6. AWARD, CONSIDERATION, NON-AWARD, AND CANCELLATION

1. The purchase agreement under the terms of the auction is realized by the award. The transfer is realized by registration of the record of award in the public registers, on which occasion the notarial deed of discharge shall also be submitted.

2. The seller has the right not to award the property or to consider whether or not he will award the property. The consideration period ends the fifth (5th) business day following the descending-bid session or so much earlier as the seller may have awarded the property. The seller has the right to extend the consideration period once by no more than five (5) business days.

3. In principle, the seller awards the property to the highest bidder.

4. The seller uses his right of consideration, unless he awards the property immediately, as evidenced by the record of the auction proceedings.

5. The award after consideration shall be evidenced by the instrument of record or a notarial deed, which instrument shall also show to which bidder the property is awarded.

6. The property subject to registration will be at the buyer’s risk from the moment of the award.

7. The auction can always be cancelled without stating reasons, as long as the property has not been awarded.

ARTICLE 7. TAX AND COSTS

1. As far as due, the buyer will be charged the following:

a. transfer tax;
b. the fee of the civil-law notary at the expense of the buyer in conformity with the auction rates;
c. premium paid to the highest bidder in the first session of the auction, if any;
d. the costs of the deed of mandate, the costs of the deed of award and discharge;
e. the Land Registry costs;
f. the costs of cancellation of the registrations of mortgages and attachments;
g. the stamp duty and disbursements;
h. the costs of the process server, advertisements, and posters, the costs of auctioneer fees and rent of the room;
i. the costs and charges under the terms of the special auction conditions;
j. costs of execution, if any, to prepare and organize the auction as far as not already stated above;
k. the costs of vacation;
l. the outstanding property charges, including property tax and (if applicable) ground rent, both for the overdue years and the current year.

2. The taxes, costs, and charges referred to in paragraph 1 of this Article are never part of the bid made, but are due in addition.

3. The costs for a first enforceable authenticated copy to be able to vacate the property subject to registration.

4. The costs of release, if any, and judicial ranking of attachments that currently may be attached to the property subject to registration.

ARTICLE 8. MOMENT OF PAYMENT

The amount owed by the buyer shall be paid –unless determined differently in the special auction conditions– no later than six (6) weeks after the property subject to registration to be sold has been sold publicly.

After this period has expired, the buyer shall pay the civil-law notary in charge of the auction an amount equivalent to the interest the judgment debtor owes the mortgagee, which will be charged from the date of the expiration of this period until the date of payment of the purchase price and auction charges to the civil-law notary by the buyer at the auction.

The obligation to pay aforementioned amounts will be cancelled if the judgment creditor has stated in writing that these amounts do not have to be paid within the period set for this purpose.

ARTICLE 9. PAYMENT METHOD, DISCHARGE

1. All that the buyer and the seller owe with regard to the auction, including the purchase price, shall be paid to the civil-law notary in the way to be indicated by the civil-law notary.

2. The right of the buyer to suspend the payment or apply setoff is explicitly ruled out.

3. As soon as the buyer has met all his payment obligations under the terms of the auction, this will be evidenced by a notarial certificate of payment.

ARTICLE 10. TRANSFER

1. As soon as the condition of full payment, attached to the award, has been met, and the costs described in Article 7 of these conditions have been paid by the buyer, the transfer of the property subject to registration can be completed as described in paragraphs 2 and 3.

2. The transfer of the property subject to registration takes place by registration in the public registers at the Mortgage Registry Office of Aruba of the individual deed of special auction conditions, if any, the record(s) of the auction proceedings, the deed of award, if any, and the deed of mandate, if any, together with the notarial deed of discharge.

3. After the transfer, dissolution of the purchase agreement cannot be claimed anymore. In the opinion of the seller and the buyer in this execution sale, this stipulation is a key stipulation as referred to in Article 6:231 of the Civil Code of Aruba, without which the agreement would not have been realized.

4. After payment of the purchase price and the costs, the buyer can take possession and enjoyment of the property bought by him at his own expense, and can dispose of it at his own discretion.

5. The property subject to registration will be delivered in the actual condition it appears to be in at the time of the delivery. If the property subject to registration is destroyed or damaged in whole or in part, or decreases in value in any other way after the award, this cannot be invoked against the seller, irrespective of the cause.

6. The presence of occupants and/or users at the time of delivery of the property subject to registration is at the buyer’s expense and risk.

7. The difference between the actual location, boundaries, extent, and further description of the property subject to registration auctioned off and those stated in this record will not provide a ground to increase or decrease the purchase price or to dissolve or annul the purchase.

8. The buyer shall be responsible for release and ranking, if any.

ARTICLE 11. VACATION

The buyer will be responsible for the vacation of the property subject to registration at his own expense. All rights and powers the judgment creditor might currently have to this effect will hereby be granted and transferred to the buyer as far as necessary, now for in that case.

ARTICLE 12. NON-COMPLIANCE

If the buyer fails to pay the purchase price and costs within the period determined, he will be in default on account of the expiration of this period, and the judgment creditor will have the right:

A. to dissolve the purchase agreement by writ, while it will not be necessary to claim dissolution in court, and to proceed to a new auction. In that case, the buyer who is in default is required to pay the judgment creditor as compensation, within fourteen (14) days after he has been notified hereof:

B. or to claim compliance with the agreement by writ, with compensation of all loss and costs and one percent (1%) interest per month in respect of the total amount, to be charged from the day he was in default up to and including the day of payment.

ARTICLE 13. PRIVATE SALE

1. A private bid can be made on the property subject to registration up to fourteen (14) days before the day scheduled for the auction by means of a bid form to be obtained at NewLeaf Notary, which shall be fully completed and signed by the bidder.

2. A private bid will be considered not to have been made if it has been made subject to a condition or reservation or if it is revocable, unless the bidder withdraws the condition, reservation or revocability in writing promptly on the request of the civil-law notary and before the filing of the application.

3. By acceptance of the private bid by the mortgagee, the purchase agreement is realized with due observance of the provisions in the Civil Code of Aruba.

4. In case of a private sale, the conditions applicable to the auction of the property subject to registration will apply by analogy, unless the nature of a private sale opposes it or if it is deviated from in this Article or in the special auction conditions.

5. The private sale is entered into under the condition precedent of approval hereof by the judge in the Court of First Instance of Aruba in conformity with Article 548 Code of Civil Procedure of Aruba.

ARTICLE 14. FINAL PROVISIONS

1. Everyone is deemed to be a directly interested party in the sense of Article 37 of the Civil-Law Notaries Ordinance with regard to the content of this deed (the deed of adoption of the content of the auction conditions).

2. Any supplements to or deviations from these conditions shall be evidenced by the special auction conditions. If these general conditions and the special auction conditions are contradictory, the latter will apply.

3. Aruban law is applicable to these general conditions.