A company leasing a three-story concrete building in Garapan has learned that portions of the structure are encroaching on property leased to the U.S. government.
Joint Marketing Saipan Inc., through counsel Tiberius Mocanu, is suing the property’s owner, Emerenciana Sonada, for breach of contract.
Joint Marketing asked the Superior Court to issue an order granting the company its rights pursuant to the terms in the lease agreement with Sonoda to “use the portion of the rent payments due at closing to cure such defect as necessary for Sonoda to convey a good and marketable title, and deduct that sum from the amount due at closing.”
Joint Marketing requested the court requiring Sonoda to pay expenses incurred, including attorney’s fees and costs pursuant to the terms in the lease agreement.
As of press time yesterday, Saipan Tribune was still trying to contact Sonoda for comments.
Mocanu stated in the complaint that Sonoda is the fee simple owner of a lot in Garapan that contains 1,022 square meters located next to a property leased by the CNMI government to the U.S. government.
Mocanu said Sonoda’s property, located on the corner of Micro Beach Road and Kalachucha Road, touches portions of the southern end of the American Memorial Park.
Mocanu said that on Jan. 6, 1983, the CNMI leased approximately 177 acres, which is 72 hectares or 720,000 square meters of property on Saipan by the Tanapag Harbor to the U.S. government.
The American Memorial Park sits on the property leased by the CNMI government to the U.S. government.
In 1989, Mocanu said, a three-story concrete building was erected on Sonoda’s property.
The north boundary of the building contains a concrete walkway extending across the length of the north side of the building.
Mocanu said that sometime in 1993, the Department of Public Lands discovered during a survey that portions of the north and east side of the three-story building encroached on to the land leased to the U.S. government.
Mocanu said during the survey it was also discovered that the east end of the middle one-story concrete building encroached on to the land leased to the U.S. government.
DPL notified Sonada of the encroachment.
In December 2016, Joint Marketing, through its manager Hua Feng Guo, entered into an agreement for a 55-year lease of the property.
Joint Marketing paid Sonada $215,000 as an earnest money deposit when the agreement was signed. The remaining balance was to be paid, and closing was to be held on Dec. 19, 2017.
Mocanu said Sonada did not disclose the encroachments to Joint Marketing.
Mocanu said that on May 12, 2017, Joint Marketing discovered during a survey that the three-story building encroached on the property leased to the U.S. government.
Mocanu said Joint Marketing then notified Sonada of the encroachments and requested that she resolve/clear them before the closing date.
The lawyer said pursuant to the agreement, Sonda has the obligation to deliver good and marketable title, free of defect, on the closing date.
He said Joint Marketing is unable to secure title insurance that would protect it against any lawsuit stemming from the encroachments onto public land.
Last Nov. 21, Joint Marketing wrote to Sonada and informed her that it was prepared to close on Dec. 19, 2017, but that it was concerned that the encroachments would not be resolved before the closing date.
Joint Marketing proposed two possible options if the encroachments were not resolved before the closing date.
Joint Marketing proposed that the closing date be extended for a reasonable amount of time to allow Sonada additional time to resolve the encroachments.
If Sonada does not agree to an extension of the closing date, that Joint Marketing may exercise its right to cure the defect and deduct the amount it takes to cure from the purchase price.
On the Dec. 19, 2017 closing date, Mocanu said, Joint Marketing presented to Sonoda a check for $1,585,000, the remainder of the purchase price.
Joint Marketing proposed that the closing date be extended for three months so that Sonada may resolve the encroachment.
Mocanu said Sonada refused an extension and maintained that the encroachment is not a cloud on the title.