FPSL and TRG are pleased to announce that they have completed protracted negotiations in respect of the management of the Fractional Ownership programme. While this is a complicated situation, and as many of the terms of the agreement reached must stay confidential, the following statements have been agreed by both parties.
Partly as a consequence of these negotiations, it has now been possible for a resumption of Rental Income payments to be made by TRG to the Fractional Owners.
Where the income generated by the properties has exceeded costs, Owners are already beginning to receive income payments, which may include historical sums due from before the pandemic, bringing them up to date to the end of 2023. For other Owners, the income in 2024 is being used to offset negative balances owed to TRG for Beach Resort Management fees.
As a result of the negotiations the costs of managing the fractional structure will be significantly reduced, and are dealt with by the LBG Companies going forwards. This has the direct benefit of increasing the amount of money that will be available to Members.
TRG paid for the management of the fractional structures out of income prior to distribution to investors from inception, but ceased doing this at the end of 2018.
The continued administration of the LBG companies was provided via FPSL from January 2019 until the beginning of 2024, for which they received no payment by TRG. TRG’s letter to investors in early 2019 made it clear that investors should make their own arrangements with FPSL for the payment of those expenses.
It was originally assumed that the costs of administering these companies would be met from within rental returns paid by TRG, and indeed some costs were initially met in this way. What could not be foreseen was the pandemic and effect this had.
Investors/Owners are again invited to make their own arrangements directly with FPSL, and without the involvement of TRG, for any contribution they wish to make to FPSL’s costs for the period from 2019 to 2024 as these costs will not be deducted from the rental income now being paid by TRG.
FPSL have offered to make significant discounts and offer extended settlement terms to make this as manageable as possible.
The complexity in the structure, and the need to amend it, has created considerable confusion and some communications may have been either confusing or unhelpful to Members. Both TRG and FPSL apologise for any upset or confusion this may have caused. While there will be a further period of adjustment, both TRG and FPSL feel that the future arrangements are likely to bring benefits to Members.
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