17 April 2020 – Clarification about the 2020 Club AGM

Supporting Our Owners

Supporting Our Owners with Clarity around the 2020 Club AGM, 17 April 2020

With reference to the Chairman’s letter of 10 April 2020:

  1. The Club AGM is postponed until after the Government lifts restrictions in response to the Coronavirus.
  1. Section 16.7 of the current (2017) Club Constitution provides for resolutions to be proposed and voted upon that enable important Club business to be progressed in circumstances like the present where an AGM cannot take place.
  1. Club members voted democratically at the 2018 AGM to adopt a policy of preventing WimPen Onagrup, with whom the Club is in dispute, from knowing the Club’s financial position. We are achieving this by filing micro accounts with Companies House which meet its requirements and by giving a finance report to members at the AGM for their approval. This happened in 2019, and will continue in 2020, in line with the policy that members democratically adopted in 2018.  The next finance report will be given at the 2020 AGM when that is allowed to take place.
  1. The resolution to remove arbitration as the means of resolving member disputes from the Club Constitution is largely in response to the corruption of this longstanding approach by WimPen Onagrup.  Having reneged on its commitment to comply with the judgement of the original arbitration, Wimpen/Onagrup instigated a 2nd arbitration in an attempt to circumvent the first.  Given that Wimpen Onagrup has submitted numerous appeals to successive court cases (in which it lost), the Committee is under no misapprehension that a third, fourth …..arbitration would be instigated in its efforts to retain control of the Club by treating the legal judgements and the Scottish Court with contempt, and endlessly trying to run the Club out of money.  Recognising that members have expressed their desire to bring this protracted litigation to an end, the Committee has investigated several options for dispute resolution.  The alternative proposed by the Club Committee is designed to meet the criteria of being fair and reasonable, transparent, quick, low cost and democratic, with members having the last say in cases where the dispute cannot be resolved by the Chairman or the  Committee in the first two stages of the process.  The key point for members to take on board about this resolution is that we have to remove the opportunity now for WimPen Onagrup to initiate yet another costly arbitration that the Club and its members cannot afford.  Having achieved this, if members subsequently wish to put forward preferred alternatives at the AGM to be voted on by the membership, they are perfectly free to do so.
  1. It is a condition of Club membership that members abide by the Club Constitution. Members who breach the Club Constitution will have their conduct reviewed by the Club. An example of a breach is inciting other Club members to pay their maintenance fees to WimPen Onagrup, who ceased to be the Club’s Administrator in May 2017.  Any member repeatedly breaching the Club Constitution risks having their membership cancelled. This is fair, transparent and clear to all because we have a constitution and we are all obligated to abide by it.

Supporting Owners with Judicial Clarity regarding WimPen’s Appeal, 1st April 2020

From the English language translation of the legal ruling of WimPen’s appeal, which is on the owners’ website, Club members will have read with their own eyes that WimPen is only entitled to, quote, “charge the payment of the Service Fees corresponding to the Common Areas to the members of the Club, and to implement the measures defined in the bylaws of the Association regarding outstanding payments. That is, the defendant (WimPen) can demand the members of the Club that own personal timeshare rights to make the payment and, where applicable, prevent them from using the common facilities.”

Service Fees corresponding to the Common Areas typically amount to 15% of the annual maintenance fees paid by owners.

The ruling clearly does not mean that WimPen can collect the full maintenance fees from Club members, and it does not mean that WimPen can cancel ownership for non-payment of the Service Fees, which is what the purported President of the Development Owners Association is erroneously claiming.  Yet again demonstrating that he cannot be trusted to tell you the truth and be staight with you.

The Appeal Court ruling which allows for the DOA to collect a service charge for the Common Areas has been challenged and an application to the Supreme Court in Madrid has been submitted by the Club.  As Mr Barrow and WimPen Onagrup have repeatedly said about previous legal judgements, this decision is not binding until it is finalised in court. Now that the boot is firmly on the other foot, as the age old saying goes, “What’s good for the goose is good for the gander.”

Supporting Owners with Financial Insights into the Resort’s Annual Accounts, 30th March 2020

You probably recall Mr Castro’s letter of 11 December 2017, in which he extols the virtue of Ona WimPen’s superb management which results in exceptional earnings attributable to Los Claveles owners.

Quote: “Starting with an income in 2013 of 1,461,287 euros, this has risen in 2016 to 1,629,468 euros. This can be classified as good management.”

      However, if we look a little more closely at this increase of 168,181 euros we find:

  • “Other income” increased by 65,223 euros, without explanation.
  • Villa renewals, reduced by 77,778 euros
  • Provision for Bad debts reduced by 39,997 euros to zero, without explanation

That’s 182,998 euros, which more than accounts for the claimed increase in income.

In addition, unpaid Club legal costs of 138,098 euros were listed as expenditure, when no money has been paid out. This provision should be in the Balance Sheet, not in the Profit and Loss account.

So that’s 321,096 euros worth of “smoke and mirrors” not “good management”!

In fact, if we adjust the 2016 income of 1,629,468 euros by this amount, we end up with a reduced income of 1,308,372 euros, 152,915 euros less than in 2014!

Quote: “… but there is another important figure, and that is the RESERVE FUND. In 2014 this was 373,131 euros and in 2016 it was 818,866 euros, a very good figure, even without an increase in fees for 3 years”.

However, the 2014 Accounts presented at the 2015 AGM showed that the RESERVE FUND was in fact 105,552 euros, and Mr Castro’s letter of 12 April 2018, showed that the RESERVE FUND in the 2016 Accounts was 373,131 euros. This means Mr Castro’s claim of a RESERVE FUND increase of 445,735 euros during the period 2014 and 2016 is actually only 105,551 euros.  

However, the good news is that the RESERVE FUND increased to 806,863 euros in 2018.

The question is, how much faith can we place in that figure in light of the above?

Perhaps Mr Castro just likes counting his chickens before they are hatched?    

As owners, we need to very careful not to accept any financial information presented by Ona Wimpen at face value.

To be continued.

One Administrator? Monday 23 March 2020

Clarification required, please.

Roger Barrow and WimPen Onagrup claim that there can only be one administrator of Los Claveles under Spanish tourism law but in the Deed of Adaptation Los Claveles is described as a Residential Complex and not touristic. Each apartment is registered with the Land Registry as belonging to the Residential Complex Los Claveles and this identified on the Nota Simple, the property registration certificate. Los Claveles was probably described as residential because Wimpey had planned to have outright owners though that never transpired.

The website https://www.lodgify.com/blog/es/apartamento-vivienda-turistico/ describes the differences and requirements for Tourist Apartments and Tourist dwellings.

The Tourist Apartment category applies to those accommodation units that are established as companies and real estate that is not residential. They must have a visible identification plate showing the category – the initials AT (Tourist Apartment) with the number of keys they are credited with according to service offered. Tourist apartments must offer 24 hour a day service.

Tourist Dwellings (or houses) for tourist use are registered as residential units and their property is individual. Los Claveles fits this category.

Importantly for Tourist Dwellings, the website says Although tourist dwellings are individual units, isolated or within buildings or residential complexes, the owners of these properties can contract the services of specialized companies for the promotion, administration and management of their properties as places of temporary accommodation. In addition, the municipal ordinance of uses in which the home is located or the Statutes of the community of owners may limit or condition its use.”

This allows Club Los Claveles to engage a different Administrator and services.

The category ‘Tourist Dwelling’ would also apply to WimPen Onagrup’s other managed resorts such as Sueno Azul which have outright owners and there is no demarcation between the 31 weekly timeshare villas and the remaining 61 outright and privately owned villas (one of which is the home of Ian Crane).

Tourist Apartments exclusively provide temporary accommodation and as such could not apply to Sueno Azul for example, where some private outright owners do not use WimPen Onagrup for holiday marketing or maintenance.

Request from a Club member for advice, 22nd March 2020:

“Wimpen have mailed me and said if I do not pay the outstanding fees to them they will give my week 13 in Villa 66E to RCI for rental, which I am sure is not correct.

Can you advise me what I should do, please?”

This is an alarming development as legally, under the Constitution, it is only the Club that can stop the use of a Week, or cancel membership, for non-payment of maintenance fees.  WimPen have no legal authority to rent or give Weeks to RCI.  

Club members who find themselves in the same position, should email RCI to make clear that they are not giving authority for their Week to be given to RCI, and that using their Week without permission is theft. 

The Club Committee is supporting owners by:

1) Making clear to RCI that the Spanish Appeal Court ruling was:

“The Association encompasses the whole of the Urbanization, including Common Areas and Apartments, but the powers transferred to the Association refer only to the so-called Common Areas, the main purpose of which is to control, repair, renew, maintain, ensure, and in general take care of the Common Areas for the use, benefit and enjoyment of the members.

Consequently, the defendant (WimPen) is entitled to collect the Common Area Service Fee from the members of the Club and to take the measures provided for in the Association’s statutes in the event of non-payment, that is to say, to require payment from the members of the Club who have a personal right of use in turn and to prevent them from using the common facilities, if necessary.”

2) Pointing out therefore to RCI that:

WimPen is exceeding its (contested) legal right from the Spanish Appeal Court ruling by seeking to collect maintenance fees from Club members when it is only authorised to collect the Common Area Service Fee, and by threatening to cancel membership or give members’ weeks to RCI.

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