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General Who is behind San Martinho Beach Club (SMBC)? PERTINENT QUESTIONS EVERY INVESTOR SHOULD ASK: SHARE BLOCK I know that all land in Mozambique is owned by the Government, so what, exactly, am I buying ? Investors acquire shares in Grace Bay Club Limited, a registered company in Mauritius . Grace Bay Club Limited has the exclusive right to the use and development of the resort on the immovable property in Bilene owned by San Martinho Beach Club Limitada, a company registered in Mozambique. The duration of the occupational right of use is based on a “long lease” system and endures for 49 years, automatically renewable by another 50 years. Treselle Limited (which is a registered company in Mauritius ) is the Share Block Developer and Seller. The Purchaser enters into a Building Contract with Treselle Limited to build a villa or apartment and owns the full use title to that unit. What will I own when I invest in SMBC ? Share Block, simply put, is the acquisition of shares in a development, and together with the purchasing of a Building Plan, which when implemented, entitles the Purchaser to the full and unreserved use of his villa or apartment. The ownership of this use or footprint is transferable, realising the profits as would be the case with any full title ownership. Due to the ease of ownership and security with Share Block it is becoming more and more attractive to the modern day investor. Can the Developer raise a bond over the development ? No. There are no borrowing powers in this development. Schedule S of the sale agreement contains the warranties to prevent the developer from borrowing against the assets. The entire development is being funded with cash. How is the agreement of sale structured ? The agreement of sale is divided into two components: Share Purchase : The first component is for the acquisition of shares from Grace Bay Limited to secure the occupational rights as recorded in the use agreement and the right to have an apartment constructed in accordance with the architect's drawings. When the purchaser acquires the shares, the seller (Treselle) cedes and assigns the use agreement to the purchaser. Building Contract : The second component is the building contract providing for the erection of the apartment or villa on the site. The building contract is between the purchaser and the Contractor (Treselle Limited). What is the Use Agreement ? The Use Agreement is the agreement which entitles each successive holder of the share block to the exclusive use and occupation of the apartment, villa or site and also the use of the common property on the development, subject to its terms and conditions. In what currency is the purchase price ? Your investment is US Dollar based, regardless of the purchase currency. How is payment to be effected ? The purchase price, in respect of the shareblock fixed loan and use agreement, is US$75 000, comprising US$74 173-55 in respect of the shareblock and US$826-45 in respect of that portion of the shareholders loan allocated to the shareblock. To whom is payment made ? Payment is made to the seller (Treselle Limited, a registered company in Mauritius ). Payment is usually by bank transfer. Traveller's Cheques are NOT an acceptable means of payment. Where is this money held ? The money is held by the developer's Agent (Frontfin Properties, Secretaries and Administrators Limited of Mauritius ) in an Escrow account with the Standard Bank of Mauritius pending fulfilment of any subjective clauses. The funds will therefore flow from the investor to an account in Mauritius and from there will be released to the seller based on the fulfilment of specific contractual conditions. Frontfin Property Administrators is the transfer office. How is payment of the contract price made to the contractor ? The developer's agent, Frontfin, will pay the contractor in instalments on receipt of reports issued by the consulting engineer certifying completion of the various stages of the apartment or villa as specified in the agreement. Who benefits from the interest earned by the money in the Escrow account ? Interest earned in the Escrow account will accrue to the purchaser. What is included in the building contract ? The apartment or villa with quality finishes (granite top kitchens, mozzie screen windows, DSTV ready connections) as described in the San Martinho Schedule of Finishes. The Building Contract includes major kitchen appliances such as under-counter oven, hob and cookerhood, side by side fridge/freezer (4 bedroom unit) or combination fridge freezer (3 bedroom unit), washing machine, tumbler dryer and microwave. Also included is a gas braai on the patio and aircon to all bedrooms as well as ceiling fans. Investors must furnish their own units. What about Foreign Exchange Controls ? South African residents investing in SMBC must warrant that their taxation affairs are current and in good standing with SARS and that they have sufficient offshore investment allowance available in terms of applicable laws to transfer the full purchase price and the building contract price to Mauritius from South Africa . In this regard the investor must apply for SARS clearance to transfer the appropriate funds. Can I re-sell my unit ? Yes, at any stage. Do I have to repatriate the profits made on the sale of my unit? No. South African Reserve Bank requires that funds utilised through the SADC exemption to acquire property outside of South Africa be repatriated to South Africa if the property is sold, HOWEVER, any profit generated on the sale of the property need not be repatriated. What is the anticipated levy ? To be advised What will this levy cover ? Everything outside the unit. When will the initial levy become payable ? From the effective date in respect of costs and expenses of the Grace Bay Limited and costs are incurred after the occupation date. Who determines the levies ? The Directors of the Company. Can I rent my apartment out ? Yes. Either privately or through the professionally run rental pool. Do I have to repatriate the profits made on the renting of my unit? No. Will each apartment have its own electricity and water meter ? Yes. Will my apartment be insured and by whom ? The Company will in its discretion and at the cost of the shareholders insure the villas and apartments against damage for their replacement value. Who is responsible for maintaining the buildings ? The owner of the shares will be responsible for all interior maintenance. Can a unit be jointly owned ? Yes. The maximum number of joint owners is limited to 12. FRACTIONAL TITLE OWNERSHIP The San Martinho Development also encompasses Fractional ownership. Simply put, Fractional Ownership is ownership of the use of a villa or apartment for a stipulated time period in a twelve month cycle. Fractional Ownership has its own appeal, in that you purchase the right to use a fully furnished and serviced villa or apartment together with the right to use the amenities within the resort and also have access to the common property within the resort (all of these rights are subject to rules and conditions as set out by the Use Agreement and Conduct rules). It is important to note that any unused weeks can be banked or rented so as not to be wasted. What will it cost me to buy into SMBC via Fractional Title Ownership ? P.O.A. How many weeks will this entitle me to ? Four weeks in any twelve month cycle. Are levies applicable and if so how much will they be and what will this levy cover ? Yes. Weekly levies will be payable (tba). All fractional units come fully furnished and are fully serviced 6 days a week. How many entitlements to a single villa or apartment ? There will be a total of 12 Fractional Title Owners to a single unit. As a Fractional Title holder will I be entitled to use all the facilities of the resort ? Yes |
