We have been receiving a series of questions from Owners recently, and while we have been working hard to reply to them individually, s so many people are asking similar questions we thought we should share some of the responses.
Q. Why are statements reporting rental income so delayed. When will they next be available?
A. We appreciate this is frustrating. Since the pandemic those with ownership in the Dunas and Llana resorts will have had 3 statements dealing with rental income up to the summer of 2022 and will shortly receive the next quarter beyond that. As Tortuga did not open until September 2022, Owners for this resort are still waiting for their first post-pandemic statements. Part of the difficulty in sending statements is that providi9ng accurate statements of returns to fractional owners is currently impossible, and this is in part related to the legal action that is taking place between one of the LBG Companies and FPSL/FPS Corporate Services/David Hannah and Nick Hannah. This legal action is related to way in which rental income is paid and what may be deducted from it. Until the legal action is concluded it is impossible for TRG to accurately communicate to Owners how much they will receive from rental payments, and how much will be deducted (if anything) by FPSL and FPS Corporate Services.
Related to this, FPSL have been trying to get Members to pay fees directly and at the same time repeatedly seeking to get all rental income paid directly to their own companies rather than to Owners.
This makes it impossible for TRG to identify how much will eventually be returned to Owners, and FPSL are not sharing information with TRG.
As a consequence, TRG is maintaining records of how much each property earns in detail, and the payment or recovery of Beach Resort Management fees as this information is fully available to TRG. Once the legal process is complete, TRG will work with the Directors of the LBG Companies to reconcile these numbers with the liability of the Companies or Members to pay fees, and then will work with those Directors to make sure the Members are given accurate information and receive their rental proceeds in a timely manner.
In a small number of cases where the LBG members have been proactive and they have received accurate statements up to May 2023 and have received their rental income up 31st May 2023. We look forward to be able to bring the majority of LBG Companies up to the same status as soon as the legal matters can be concluded and appropriate arrangements are put in place. It is impossible to determine when the High Court process will conclude. The latest information we have is that the Defendants have yet to file any Defence and have asked for an extension in the time to compile their defence.
Q. How do I stop FPSL sending me demands?
A. FPSL is not connected to TRG, so we cannot prevent them from sending you e-mails. They and their legal advisors have been asked to stop sending demands, but they have not responded to this request and continue to contact Owners directly. The UK police provide the following advice:
- ask FPSL to stop sending you e-mails and demands.
- block the admin@fractional.net e-mail address or add it to your ‘blacklist’ so that it goes to spam.
- if, despite this, they continue to contact you and you feel harassed or threatened, then report them to Trading Standards in the UK - https://www.tradingstandards.uk/consumer-help/ - or the Channel Islands - www.gov.gg/consumeradvice
Q. FPSL are threatening that the LBC Company may become insolvent. What does this mean and what would happen?
A. Insolvency refers to a situation in which a UK Company - such as an LBG Company - cannot pay its debts as they fall due. As the LKBG Companies are not trading companies, they do not normally have trading costs. As we understand it, FPSL are suggesting that as they have not received payment for their services, they are threatening to demand that they are paid and if you or the Company does not pay their fees they will seek to make the Company insolvent and ultimately it will be closed. The claim. In the High Court seeks to clarify if the fees being charged by FPSL are correct and legitimate. Therefore, while the High Court claim is in progress, should FPSL seek to claim that an LBG is insolvent, the Directors of the LBG will be easily able to point to the High Court action to prove that the fees are not agreed and cannot be enforced. While the High Court action is proceeding this is therefore an empty threat.
Some Members have pointed out that the Directors of the LBGs are controlled by David Hannah, who is the brother of Nick Hannah who controls FPSL, and that FPSL have been asking for money to be sent to FPS Corprpate Services, which is controlled by David Hannah. This is true. However, it would be a very serious matter if David Hannah were to work with his brother to threaten the LBG Companies with insolvency.
Whatever happens, TRG will always regard Members as the rightful ultimate owners of interests in the TRG property.
Q. Where will rental income be paid when it is available?
A. We have agreed that rental income will be paid to the LBG Companies but only when we can be assured that the LBG Companies have correct arrangements for the receipt of funds and have made arrangements to correctly forward the funds on to Members.