Updated 24th April 2023
A number of Fractional Owners have been in touch to ask how they surrender their Ownership of their TRG Fraction. These are typically Owners who feel the costs of ownership outweigh any benefits they may get. For example, the some feel that the costs of maintaining a pension wrapper or BRM fees are greater than the income they would get from rental. Others have already recovered the value they paid to purchase the Ownership and now wish to exit without being asked for BRM fees. We can't advise if this is he correct step for you, but if you have decided you want to hand back your Fractional Ownership this article is designed to help you navigate the steps you need to take.
Does this apply to you?
There are 2 types of Fractional Ownership relevant to the property in Cape Verde. If you own a 50% interest it I possible that you have a direct land-registered interest in the property. If you do not know, contact us at firstname.lastname@example.org to ask. Please include your name in the request and we will confirm if you hold a direct land-registered interest.
If you DO own a direct land-registered 50% interest then you will need to instruct a lawyer able to carry out conveyancing in Cape Verde and there is likely a cost involved in this process. Contact us to ask about help with this and we will be able to recommend someone suitable. The rest of this article does not apply to you.
Most Fractional Owners will NOT have a direct land-registered interest, but will have a Membership of a UK-based LBG Company which holds the property for them. This article deals with this situation. Read on.
2. Check Surrender is the best option for you
You must think before you act because once you have Surrendered your Ownership this cannot be undone. The pandemic has been a difficult time for everyone and during that time you may have become frustrated with the lack of income and the costs of maintaining an Ownership which can include the cost of keeping a pension wrapper open. If you wish to see a statement of account from TRG, please ask by sending your name and request to email@example.com. We can provide a tool which allows you assess what income might come in in future based on pre-pandemic performance to help you make a decision. You may also be well advised to speak to a specialist advisor independent of TRG on your options. Again, if you contact us we can make some recommendations including some alternatives to just hoping for the best. Also consider selling. We have an article on this which can be found at: https://www.sua-casa.net/post/how-do-i-sell-my-fractional-interest
3. What do I need to start?
Actually, this is very simple and to do this you require a copy of your Fractional Ownership Certificate which should have been sent to you at the time of your purchase. A digital copy will suffice and you do not necessarily need the original. To Surrender you need to have the following:
The correct name of the owner of the Fraction. This could be your name, or it could be the name of a trust or pension that a holds the Ownership on your behalf.
The name of the LBG Company in the UK which issued your Fractional Membership. If you do not know this, contact us at firstname.lastname@example.org providing your name and we will be able to tell you the LBG Company relevant to you. (If you do not know how the LBG Company is relevant, may we suggest you read this article: https://www.sua-casa.net/post/who-s-who)
A copy of your Fractional Ownership Certificate issued by the LBG Company. If you do not have this, you may ask for a repeat copy by writing to the Director of the LBG Company requesting a copy. Please contact TRGFMH using the e-mail address email@example.com. TRGFMH is not connected to TRG/Sua Casa. If they do not respond then please contact us and we will encourage them to support you positively.
If you hold your Fractional Ownership via a Pension then your scheme administrator should hold all of the above information and should be able to help you.
. 4. Surrendering
The terms of your Fractional Ownership allow you to Surrender on your own decision. You simply need to write to the Director of the LBG Company (by e-mail is sufficient) attaching a copy of your Ownership Certificate explaining that you have opted to surrender your Membership and your Membership is cancelled automatically after 7 days. A suggested text for the letter or e-mail is as follows:
From: [Insert the name of the Owner of the Fraction which may be the name of a Pension Scheme]
Date: [The date of your correspondence]
To: The Directors,
[Name of the LBG Company relevant to your Membership]
Surrender of my Membership in the above Company
I have decided to surrender my Membership of the above Company. In accordance with clause 17.1.1 I hereby give 7 days notice of my resignation as a Member of the Company and I enclose a copy of my Membership Certificate. Please confirm by return that you have received this instruction.
I am informed by representatives of TRG that I will have no further liability for Property Manager fees associated with my Membership.
[Name of Owner]
This can then be e-mailed to admin@TRGFMholdings.com together with a copy of the Certificate.
Once you have successfully surrendered your ownership, please let us know so we can be sure to amend the records here to avoid you being chased for any further charges.
5. What does this cost?
There should be no charge by the LBG Company for this service. You will note from the wording in the letter that as a gesture of goodwill, for any Owner of a Fraction taking the option to surrender, TRG will waive any overdue fees for Beach Resort Management Fees. There is no contract between the LBG Companies and their Members for this activity and no right for the LBG Company to seek to charge or recover any administration fees. If you do receive a request for fees and do not know how to challenge this, please feel free to let us know at Sua Casa and we will see if we can support you. We recognise that surrendering indicates that you are not happy with your ownership of a Fraction and we certainly don't want to add to any dissatisfaction; we are here to help you implement your choices.
It is possible that your Pension Administrator will seek to charge for their involvement. We cannot advise you on the terms of your Pension Administration service.
6. What if my Pension Administrator is obstructive
In a recent Financial Ombudsman Service ruling which was made public the Ombudsman made it clear that where there is no ongoing benefit in the holding of an asset in a SIPP the Administrator should "provide all assistance it reasonably can to .... engage with any necessary parties to arrange for the disposal of underlying investments and enable the closure of the SIPP." It was made clear that this obligation fell under the requirement for the firm to "pay due regard to the interests of its clients and treat them fairly". In fact, while each case will rest on its merits, in this recent case the Ombudsman required a refund of some SIPP administration fees to the client.
Should you need to evidence this recent ruling in dealing with your SIPP provider you could direct them to FOS DRN-3042875. If you need support picking up this argument we are aware of Advisors who have been able to support clients through this issue.
7. What happens to my Membership
You may be wondering what happens to a surrendered Membership. Does it go back to TRG? The answer is 'no'. In fact the is cancelled while the property to which it relates stays with the LBG Company and it will be a matter for the LBG Directors to deal with any costs or revenues that accrue to that share of the property.
We recognise that this is a lengthy article. In simple terms, you should be able to simply surrender your Membership at no cost and minimum of hassle within 7 days. However, if you find you are obstructed in that process, please let us know and we will do our best to help.