As Marija Crnjak/Poslovni Dnevnik writes, Hotel Villa Dubrovnik is embarking on a project to build luxury tourist villas in the Sveti Jakov area of Dubrovnik, on its own land that is free of encumbrances, after the legal entanglements with the Europrojekt company were finally resolved on Monday. So far, there have been no details about the project published, and Villa Dubrovnik promises to present their ideas to the local community in due course.
As stated in the recent announcement on the Zagreb Stock Exchange, based on the settlement between Villa Dubrovnik and Europrojekt, the Commercial Court in Dubrovnik issued a verdict on Monday rejecting the plaintiff Europrojekt’s claim and cancelling all encumbrances on the aforementioned land.
Legal entanglements
This is the epilogue of the story about the attempt to sell the aforementioned land to the company Europrojekt, which has allegedly never paid the required amount since signing the purchase agreement with the hotel way back at the beginning of 2021, and just a week ago, it has been said that it sued Villa Dubrovnik because they ”didn’t want to return the deposit of one million euros”. With that settlement, Europrojekt gave up its claim for double the amount of the advance, and Villa Dubrovnik agreed to return the down payment, although until a few days ago they had claimed that there was no basis for the return.
It is currently non-operational land in the Sveti Jakov part of the city, spanning a total area of 6,675 square metres. The attempt to sell the land off, all with the aim of preserving the financial stability of the company, was launched in the midst of the coronavirus pandemic, and the sales contract with Europrojekt stipulated that the land be sold for 4.2 million euros plus VAT.
At that time, Villa Dubrovnik was still owned by the large Turkish Dogus Group, and in the summer of 2021, pressured by the consequences of the global public health crisis, it was sold off to a group of eight Croatian pension funds. With the aim of paying the full purchase price, on October the 6th, 2021, Villa Dubrovnik signed a long-term loan agreement and an agreement to secure a monetary claim (mortgage) on the property as a pledge debtor, and with this agreement, the hotel was to be paid the purchase price no later than the 15th of October 2021, and following the payment, the mortgage should have been established.
However, the payment never arrived. According to Villa Dubrovnik’s report on its business operations for the year 2021, it is stated that during that year, the Company and the Group recognised income in the amount of 7.4 million kuna based on the down payment for the sale of the land in the past.
It is un that report that they noted that, based on the contract, the buyer had the obligation to pay the difference in the purchase price by a certain deadline, and otherwise, they’d lose the down payment. However, since the customer breached the contract and failed to fulfill their obligation, the Group recognised revenue from the collection of damages in accordance with contractual law.
However, they relented. As Villa Dubrovnik pointed out in its recent press release, the court decision confirmed Villa Dubrovnik’s ownership of the aforementioned real estate, the previously paid down payment in the amount of one million euros was returned, and Villa Dubrovnik also achieved the desired structuring of the land parcels.
To speak more specifically, by exchanging and selling smaller parts of real estate with the owners of neighbouring properties, who are in partnership with the company Europrojekt, the required minimum area was reached, which will allow Villa Dubrovnik to develop its already planned project of the construction of luxury villas on all parcels under its ownership, which wasn’t the case before.
“The planned development of the project of luxury villas in Sveti Jakov is currently still in the initial phase, and we’re convinced that, with its synergistic potential, it could provide additional value to the overall tourist offer of the city. Of course, as a socially responsible company which akes into account the interest and opinion of the public, we’ll publicly present our ideas beforehand to all involved and interested stakeholders, and in cooperation with the city authorities responsible for spatial planning, we’ll ensure compliance with all of the relevant regulations that define construction in the area of Sveti Jakov,” said Mirna Loncar Strazicic, president of Villa Dubrovnik’s management.
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