|The Club’s ‘Fractured Relationship’ with the DOA|
Chairman’s Communication 31 July 2021
This communication is about two matters concerning the Club’s relationship with the Development Owners Association (DOA).
1. The ‘article’ on the DOA website about maintenance fees – although loosely based on fact contains sufficient omissions, errors and/or misrepresentations to, severely, mislead members of The Club about the REAL situation underlying the payment of maintenance fees and Club finances.
Under the Club Committee’s commitment to transparency, and adhering to its pledge to its fellow members to tell them “The truth, the whole truth and nothing but the truth!” I am compelled to put the record straight.
2. An update on the court hearing in Tenerife last month concerning the Club’s challenge to the 2018 DOA AGM.
1. Where does your maintenance fee go?
The DOA claims that “ ……… WimPen manage the community account on behalf of owners”.
In response to this claim:
WimPen (through its dubious actions at successive AGMs – which is being legally contested) might well have the authority to manage the finances of the Escritura Community and the Development Owners Association but HAS NOT got the authority to ‘manage’ the finances of ‘The Club’ (which accounts for approaching 85% of total resort funds) since 2017 when WimPen’s management contract ended and was taken up by an alternate administrator.
WimPen continues to contravene Spanish law by combining the finances of the three Los Claveles communities (The Club, The Escritura Community and the Developmet Owners Association) in a single community account, i.e. it is legally required under the bylaws to have separate bank accounts for each community.
WimPen was ordered on 1 August 2017 by the Scottish Arbitrator, Brandon Malone to split the Los Claveles joint bank account, calculate the Club’s funds held within the account and return them to the Club Chairman within 28 days.
Despite having agreed to abide by the judgement of the Arbitrator, WimPen appealed against this order which it lost, as per the decision of the Court of Session of 22 February 2018, yet has still failed to comply with the order. This ‘failure’ has required the Club Committee to pursue the enforcement of the ‘order’ in Spain. The judgement was recognised by the Spanish Superior Court with no right of appeal and was passed to the local court in Arona to enforce. Since when the matter has, admittedly, become a ‘lengthy battle’ due to the ‘lethargy’ of the Spanish legal system, Covid and several ‘legal blocking actions’ enacted by WimPen as it desperately seeks to thwart the Scottish judgement/the decision of the Spanish Superior Court and retain control of Club property.
The DOA claims “…there is a misconception that WimPen receive your money, this is untrue!”
– WimPen is in sole control of the Community Account. The Club (represented by its Committee) has NO access, whatsoever, to its funds ‘held’ within this account, despite the arbitration award referred to above. Club Members are actively prevented from having any say in how their funds are used through being excluded by WimPen and the purported President of the DOA from approving the resort’s annual accounts. This is in contravention of the resolution approved at the 2014 joint AGM for members to take part in this process.
– WimPen has also consistently failed to comply with article 9.6 of the DOA Statutes which legally requires that a Reserve Fund be held in a separate bank account in the name of the Association for planned future substantial capital expenditure, with a second signatory to the DOA Administrator being appointed by members at the DOA AGM.
The DOA claims “….the money paid for maintenance fees is deposited in the Bank Account of Los Claveles, not WimPen, and this account pays all expenses and wages for the resort.” – Club members have NO say in the approval of the annual accounts for the resort and NO control over how their money is spent. A situation resulting in WimPen (or should we say Onagrup) plundering and/or wasting Club funds:
– WimPen ‘helping itself’ to €183k per annum for “management fees” despite not having a contract with the Club which expired on 2 May 2017;
the expenditure of €90k on the refurbishment of the restaurant and bar as WimPen pursues it’s strategic objective to turn LC into an aparthotel (at owners expense) allowing it to target general tourists, ie non-owners, where it can charge higher weekly rentals thereby increasing it’s own profitability.
– WimPen spending £9000 on a DOA AGM serving 16% of the resort with less than 20 attendance, which compares with the £2000 for a Club AGM (organised by the Committee) serving 84% of the resort with over 100 attendance.
The DOA claims “…. Audited accounts are published in full so there is complete transparency on how your money is used. “ – This claim is simply untrue, as, for the past 5 years, WimPen has repeatedly failed to show any income received from the sale and receipt of annual maintenance fees for the unauthorised disposal of the Club’s 1200 cancelled weeks, estimated at €2m minimum.
The DOA claims “….. So, if you are paying your fees to the Community Account managed by WimPen, you can be confident that you are making a full contribution to the running of Los Claveles and will have full use of your resort.”
– On ’face value’ a reasonable statement BUT one which, crucially, OMITS mention of the policy (agreed to by the DOA) by which WimPen enforces/secures payment to the bank account controlled solely by itself, rather than the recognised legal recipient of maintenance fee payments, i.e. The Club. The ‘real life experience’ of a multitude of ‘owners’ is that unless you pay direct to WimPen (recognising that WimPen has no authority to demand funds due to the expiry of its management contract with the Club) you will be refused access to your apartment – to the extent that WimPen has previously used physical force with recalcitrant Club owners to enforce its policy. In effect, an EXTORTION RACKET of which organised crime groups, such as the Mafia, would be proud.
– Notwithstanding the matter of ‘criminal extortion’, it is illegal under article 21 of the Spanish Law of Horizontal Property to deny owners access to their property, regardless of whether they have paid their annual maintenance fee or not. WimPen is breaking the law by refusing access to Club owners who have paid their maintenance fees to the legally appointed Club Administrator, Snr Hiro Bulchand, through the UK company Club Los Claveles Ltd. which was registered at Companies House in August 2015 for the purpose of invoicing and collecting maintenance fees on behalf of the Club Administrator. The matter of WimPen refusing access to Club owners has been raised on appeal to the Spanish Supreme Court and its ruling is awaited.
The DOA claims “…do you pay your fees to Club Los Claveles Ltd? You are not contributing to the expenses of running the resort, you will not have the use of your villa and you will be building up a debt to the Community.” – WimPen has consistently ignored the statutory legal requirement (under article 8 of the DOA Statutes) to calculate the common parts service charge which covers all the expenses and wages of running the resort; to have this approved by owners at the DOA AGM; and to collect this from Community Administrators. When WimPen was the sole administrator for all three Communities, and joint AGMs were held, this was a straightforward process. However, since the expiry of WimPen’s Club Administration contract on 2 May 2017 WimPen has ignored its statutory obligation and carried on as before as the self-appointed “Acting Club Administrator” which, of course, is illegal in the absence of a contract. Regrettably, as previously alluded to, the Club has been forced to pursue multiple court actions in Spain to force WimPen to obey the law.
The DOA claims “……..and what happens to your money? The Club do not publish accounts so no one knows. Why don’t they publish, what are they trying to hide?
– The DOA, conveniently, ignores the fact that Club Members voted at the 2016 SGM to keep the Club accounts confidential during the dispute in order to prevent WimPen from refining its ‘LC take-over strategy(ies)’ through knowledge of the Club’s financial position.
– The decision was taken in the light of THE WARNING made by the late Mr Pengelly that Onagrup would run the Club out of money to ensure it could not ‘fight off’ the take-over of the resort by Onagrup.
The DOA claims “..invoices sent to you by Club Los Claveles Limited are illegal. This company has no legal link with Los Claveles and no right to demand payment.” – It was the award winning, Top Tier Legal 500 firm of Sidney Mitchell that advised the Club that it would be necessary to set up and register a UK limited company for the purposes of supporting the new Club Administrator appointed by Club Members to replace WimPen. The claim by the DOA, therefore, demonstrates a fundamental misunderstanding (if not misrepresentation) of UK company law.
The DOA claims “…..and what about taxation implications? Companies registered in the UK with a permanent address in Spain are required to declare income and pay tax in Spain. Those with an address in the UK are obliged to pay UK tax.” – Prior to undertaking the sending of invoices and collection of fees the Club Chairman sought and received advice from the UK Customs and Revenue in relation to tax issues and also received advice from a Spanish expert. This was shared with the Club Committee. Solicitors were also involved. Club members can be assured that due diligence has taken place. The Club is fully compliant in all respects.
The DOA claims “….if you are paying your fees to Club Los Claveles Limited, you are wasting your money and will never get it back.”
– This claim is completely false. WimPen is doing all it can to discredit the elected members of the Club Committee in a desperate effort to hold onto Club management, and control of the resort.
– In reality, the converse is true. Both the UK and Spanish courts acknowledge that ‘The Club’ (represented by its elected Committee) is the legal recipient of maintenance fees rather than WimPen/Onagrup. That it is the individual fees paid to WimPen/Onagrup which are at risk.
– Once the Club has recovered its property (real estate, funds, financial accounts, documents/records and Register of Members) the Club will do its level best to reconcile payments from individual owners (which might have been paid to WimPen/Onagrup) with receipts. In the event of financial discrepancies, either through WimPen’s/Onagrup’s maladministration or its ‘plundering’ of financial accounts it may be forced to pursue legal action.
The DOA claims “…recent bulletins on the Owners’ website will undoubtedly have caused confusion.”
– “..in accordance with the Spanish appeal Court ruling, WimPen are legally authorised to invoice and collect your Maintenance Fees.” – This claim is inaccurate. The Spanish appeal court ruling is published on the owners’ website (see Key Document no. 19) and clearly states on page 4 of that document that WimPen is ONLY allowed to collect the common parts service charge from Club owners via their Administrator, in accordance with article 8 the DOA Statutes.
– “….paying your fees to the DOA through WimPen will guarantee access to your villa and contribute to the running of the resort.” – WimPen is breaking Spanish law (article 21 of the Law of Horizontal Property refers) by preventing any owner from entering their property regardless of whether he/she has paid annual maintenance fees.
“…beware of ‘look-a-like’ invoices from Club Los Claveles which do not give you access to your villa and do not support the expenses and wages at Los Claveles.”
– WimPen is breaking Spanish law by invoicing Club Members after the expiry of its management contract on 2 May 2017.
– WimPen has ignored repeated requests from the Club Chairman for an annual invoice of the resort’s common parts service charge in order to pay for the Club’s share of the expenses and wages of running the resort. This is in contravention of article 8 of the DOA Statutes and is being done deliberately in order to hold onto control of the Club until forced by the Spanish Courts to recognise the Club’s legally appointed Administrator, Snr Hiro Bulchand and to handover all of the Club’s property to the Club Chairman.
2. UPDATE ON THE DOA COURT HEARING IN TENERIFE ON 24 JUNE 2021
On 24 June 2021 the Club Chairman, Albert Fletcher attended the Arona Court just outside Los Cristianos in Tenerife. The Chairman had to deal with all the Corona restrictions and obtain flights.
Ana Martin from WimPen was there along with WimPen’s lawyer. Unfortunately Roger Barrow, the purported President of the DOA did not attend. The Judge stated that she would rearrange the hearing until 2 December 2021 as the hearing could not progress without Mr Barrow being in attendance. This was because Mr Barrow, as the purported President is the only person that could legally answer for the DOA.
The Club complained to the Court that Mr Barrow did not conduct the 2018 DOA meeting correctly and that this meant he had acted illegally by not adhering to the DOA Statutes. The Club is asking for the DOA meeting to be null and void. If successful, this will mean that Roger Barrow has not been the President and WimPen has not been the Administrator for the common areas and had no entitlement to be on the Resort since 2018.
I quote from the Spanish Law of Horizontal Property (This relates to Timeshare):
Section 13, para 3 “The President shall legally represent the community both in and out of court in all matters relating thereto.
Section 13, para 7. “The term of office for all governing bodies of the community shall be of one year unless otherwise provided for by the community statutes.”
Section 16, sub section 2, para, 2. states “Any unit owner may request the meeting to examine and resolve any matter whatsoever concerning the community. For this purpose, a letter should be sent to the president setting out clearly the items requested to be dealt with. The president shall include them in the agenda of the following meeting to be held.”
Section 18, para 1
states “The resolutions of the general meeting may be challenged in court, in accordance with the provisions the general procedural law, in the following cases-
a) where such resolutions are contrary to the law or to the community statutes.
b) where they are seriously detrimental to the interests of the community and benefit one or several unit owners,
c) where they are seriously detrimental to some unit owner who has not the legal obligation to sustain such detriment or where they have been adopted in abuse of power.
I quote from the DOA Statutes first published by Wimpey Leisure S.A and used ever since. (This deals with Common Parts ONLY)
Article 7 – Chairman (now called President)
7.1 “The Chairman shall be elected by members at the Annual General Meeting by a majority vote and the post shall be held on a voluntary and unpaid basis for a period of one year although the same member may be re-elected indefinitely and shall be voted with the following powers
Anyone that has been following developments will realise that Mr Barrow in conjunction with the purported Administrator has a case to answer. It is hoped that Mr Barrow will attend on 2 December 2021 to answer the allegations. If he does not, he will be failing his duty and will be in breach of a court order.
My Very Best Wishes for a safe future.
Chairman, Club Los Claveles