A few Owners have asked us to provide a simple summary of the key phrases and abbreviations used in TRG Communications and Blog articles. We have listed our definitions used in answering those questions and share them here. We appreciate it is complicated but hopefully if you come across one of these acronyms or phrases this article will be clear enough to explain what we mean. We hope this helps.
Short for Limited by Guarantee Company. This refers to the UK Company that has been incorporated to own or hold the property in Cape Verde. Most Fractional Owners actually are Members of the LBGs. So, for example, if there are 5 ordinary Members of the LBG Company which owns a hotel suite in Cape Verde, then each Member has a 1/5th or 20% interest in the property - including any income from renting the property. Limited by Guarantee means that Members can only be asked to pay a maximum of £1 ever to the costs or operating the company. The Company itself is responsible for managing the ownership of the property, collecting rental income, paying property costs, paying any operating or administrative costs and distributing any surplus income to the Members. The Company is managed by its Directors.
This refers to the Members of the LBG and normally refers to the fractional investor. Where the investment has been made via a pension (such as a SIPP or a SSAS) the Member is strictly speaking the Trustee of that pension fund. Members are recorded on the Register for each of the LBG Companies.
We tend to use Owner to describe the individual who ultimately took the decision to buy a fraction. This person (or people) might have bought via a pension scheme - and if that is the case the scheme itself or the Trustee of that scheme will be recorded as the Member.
Each LBG has one Founder Member. This Founder Member has no right to any income from the property and is there to ensure the governance of the company operates correctly. The Founder Member may fill any vacancies in the Board of the LBG and nominates the Chairman of the Board. For most LBG Companies the Founder Member is a company called TRG Founder Memberships Holdings Limited.
TRG Founder Memberships Holdings Limited (TRGFMH)
This is a company registered in the British Virgin Islands. It is independent of The Resort Group and independent of FPSL and FPS, so the only wholly independent entity in the LBG. TRGFMH is owned by some private individual investors who organised a loan to TRG during the pandemic to get the resorts back up and running. TRGFMH, on discovering that the other Directors were conflicted in their dealings with the LBGs appointed itself at a Director and Chairman of the LBGs to seek to improve governance of the LBGs. TRGFMH is managed and controlled by its only Director - David Mahon.
There are 2 companies called Fractional Property Solutions Limited. Normally this refers to a company registered in Guernsey and controlled by its Director, Nick Hannah. FPSL signed a contract with David Hannah (brother of Nick Hannah) on the 19th February 2019 for the provision of a range of services to the LBG Companies. The validity of this arrangement is currently being challenged in the High Court. (Note - there is a UK Company also called Fractional Property Solutions Limited which is owned and controlled by David Hannah. Care must be taken as occasionally communications come from this UK Company. David Hannah has explained that the UK Company is an agent of the Guernsey Company, and the Guernsey Company is an agent of the UK Company). FPSL is not connected to The Resort Group.
This normally refers to a company called FPS Corporate Services. This is a UK company controlled by David Hannah and ultimately owned by David Hannah's wife - Samantha. Although this company declares itself to be dormant, on the 19th February 2019 (the same day referred to above) David Hannah signed an agreement to provide a set of services to support the LBG Companies with FPSL. When FPSL sends a request for 'fractional fees' it requested that the money be sent to FPS. FPS is not connected to The Resort Group
This normally refers to the fees being charged for a set of services provided by either FPSL or FPS (it is not always clear) to administer the LBG Companies. According to the disputed contract, these fees are to be paid by the LBG Company. Currently FPSL and FPS seek to charge Members for these fees, but David Hannah accepts that there is no contractual arrangement which requires the Members to pay these fees. There are often 'late payment' charges attached to demands which are not based in any agreement.
These are normally (there are a small number of exceptions):
- David Hannah
- TRGD1 Limited (A dormant UK company controlled by David Hannah and Nick Hannah)
- TRGD2 Limited (A dormant UK company controlled by David Hannah and Nick Hannah)
- TRGFMH (See above) - also the Chairman of the LBG.
The Directors' job is to promote the success of the LBG Companies on behalf of their Members.
This refers to Beach Resort Management Fees. These refer to the costs of maintaining pools, pathways, security and other resort services and - as described by the Management Agreement signed by the LBG - are paid by the LBG Company (normally from the rental income received). TRG is entitled to deduct BRM Fees from Rental Payments. During the pandemic, TRG did ask Members directly to pay BRM Fees, but this stopped in May 2022 when TRGFMH negotiated this directly with TRG. Fees already paid by Members are recorded in statements distributed by TRG so that these are taken into account in future.
COA - Costs of Attraction
This refers to the specific costs relevant to an individual property (rather than a resort) and include such things as commissions paid to Tour Operators for bringing guests, laundry and cleaning of the rooms, etc. These fees are deducted from the amount a guest pays to stay in the room before calculating the actual room revenue.
This refers to a UK Law Firm called New South Law. NSL were appointed by TRGFMH to represent them in the UK until April 2022. NSL have a special expertise in supporting private individuals and companies who have difficulty with some investment products and were asked to support the set-up of TRG's Sua Casa project by helping to cleanse the TRG database. TRG do not receive any income from the activities of NSL. Owners may have received e-mails or phone calls from NSL.
This refers to a UK Company called Persei Management Limited which provides advice and support to companies in a range of industries. It has been engaged by TRG for advice, and has previously provided advice and support to NSL. It has Brad Lincoln as a Director. It has in the past provided working capital loans to TRG. Save being a contractor, it is not otherwise linked to TRG.