Update on delayed payment of fees by Ros Y Falcon, please read the whole post

Please also take note too that in about two weeks or so Ros y Falcon is going to finish the ashphalt surface of the area between the entrance of Village and the Vizcarronda. All costs and expenses, once again, will be totally covered by Ros y Falcon.

Jeff, many thanks for taking the time to not only meet with Gerardo but to also post this update!  It's most welcome.

I can see the logic in RyF's actions - although I think it would have been appropriate for AEA to, maybe, send out a letter of explanation to all owners (along with the notice of the EGM perhaps) of the situation.  As it was we had to ask them if RyF had, in fact, paid or not and then were only informed that they had not and given no explanation as to why or indeed why they were not listed with the other debtors!

Half the problem here is the lack of communication, I think.  When we are not aware of the facts, we can only draw our own, possibly incorrect, conclusion - and there is always the local gossip to throw into the equation!

I agree that - although I have some issues with them! - it would be a logistic nightmare to try to replace AEA!  They are a large, experienced organisation and from what I have been told there aren't many other companies who could handle a community the size of Duquesa Village.  Again, if only they would communicate more - eg what action have they taken against debtors, for instance?  Nobody knows what on earth they have done because they haven't told us.  It may be the case they have done nothing - in which case they must be brought up on this.

Hopefully, we'll get some clarity at the EGM.

Thanks, again, Jeff for all your efforts.

Thnaks Jeff fort all your effort on this and other matters that you have good knowledge on.  It is much appreciated.  I too agree with what is said here.  I would much rather it be finished than half bulit.   It is great now the trucks/cranes have gone.  It is so peaceful in DV.

Thanks again!

Thanks Jeff.

It's a shame we won't see you at the EGM - we definitely owe you a few drinks for all the effort you are putting in!

I agree with your viewpoint and hopefully RyF won't suffer the worst from the current downturn.

We hope to see you soon.

Michelle & Alex

Jeff,

Once again many thanks for your hard work on behalf of us all.

Best regards

Michael & Joy

Jeff 

You know my thoughts on this as we have shared emails recently.

What we need to know as a community what is the impact on the cash flow of our accounts. How much do RyF owe?  and can AEA manage the budget , although some costs have been absorbed by RyF, with this shortfall. Those are the questions for AEA and as AEA have been working with RyF to manage this situation I would like to think it wont have a detrimental effect on the services in DV. I will contact AEA for their observations so they can respond before the EGM.

Jeff,  Let's be clear about RfY's motive here. 

As I  wrote  in my emails to you earlier this year   RyF  want to be able to continue to sell apartments.  
Completing the development helps to improve their sales. 

Not paying community fees is an obvious choice for RfY in their cash juggling. 
As a former Financial Controller I've seen it all before.
Also it is possible that bank only pays out mortgage loans to RyF   in installments based on the state of completion of each block.  
So RfY  have a financial incentive to complete each block from a cash flow basis to get paid the mortgage fund.

RfY  don't pay the community fees because they can get away with not paying them.  We are the soft target for their  Corporate Treasurer.

Whilst I would agree that we don't rock the boat at this EGM  and allow  RyF to complete the job,   let's all recognise that  the community is taking a risk of being landed with large debtor
in the event that RyF  go in to administration.    The mortgage holder has first call on the asset   and if there was  a fire sale there may be little, if any surplus to pay the community
charges owed.

If I was attending the EGM I would advocate a motion that RyF be surcharged in the event they did not pay the overdue by 30th September.

regards,
Paul

Pauls points are very well made and I agree with them. RyF are paying the debts or directing their (apparently) limited funds to where it best suits them. Lets hope that it is also to our benefit ! But the simple truth is that both debts are due. AEA are the company and they need to persue all debts. Notwithstanding RyF's motives where does that leave the persuit of the debts by other non paying owners. Maybe we need to start looking for economies within the existing budgets?
I shall attend the meeting and hope we can have a positive outcome.

Dave

Please fully read my other post as a question raised here has already been answered. RyF and AEA meet once a week to discuss the budget and they have being looking at trimming it where possible. As I said in my note RyF have taken over some aspects and are paying  for them. Any energy chasing debt should be focused on owners as I believe RyF will pay, they have already paid some 50,000 euros as well.

Rather than wait for an EGM when people are over why don't you go and spend some time with AEA and understand whats going on and try and help them.
I have met with Gerardo 3 times this year, I know him quite well as a trained sales/contract negotiator and I can tell from his body language he is under extreme pressure to juggle whats going on and I believe he is doing his best.

AEA will only get about 110-120 euros per year per apartment to run the community so for 300 apartments thats 33000 per annum that does not even pay for 2 full time people, plus office expenses. The processes involved make it difficult to keep all paperwork and debt absolutely up to date.  Firing emails at them is not the answer, because if they gets lots per day they will not have time to answer.

So can we have volunteers to mark AEA and I will mark Gerardo as I have the relationship with him and will endevour to meet him every other month when I am here.

We need a consolidated route to Gerardo and to AEA (2 people per contact) so we do not flood them with emails or calls. 

 

This message was last edited by manilvajl on 9/15/2008.

I can see both your points of view Jeff and Paul.  Jeff - I agree the site being finished is a priority and that RosyF cannot magic huge sums from nowhere.  Clearly there needs to be some negotiation and a sensible relationship maintained.  (Thank you for all your efforts on this score too).  

At the same time, many of their investors (like us) were persuaded to part with large sums of money years before completion to fund their development with the promise of a sound investment by sales teams endorsed by RosyF.  Like RosyF, these people now find themselves in some cases unable to meet mortgage payments or pay community fees. 

I think we are all agreeing that debtors should have to pay dues, with fines if not settled within a reasonable timescale, (so we don't have to pay for the priviledge of others owning apartments!) It seems mightily unfair therefore that RosyF are able to effectively distance themselves from this group (as the largest debtors by far too!) and to get special dispensation from being penalised for not paying up!  I don't think we could morally force some debtors to pay penalties and not others.  What does everyone else think?

PS Good point made Jeff about AEA being limited in what they can do with a much reduced income from the large development.  I, despite my frustrations, feel it would be hasty to write AEA off at this present unsetled time.

It's not exactly an incentive to purchase when the developer is a debtor to the community. This needs to be stressed to RYF if they expect sales to continue in the forseable. Also presumably they will lose their voting rights in the interim like all debtors........ How much exactly is owed to the community?

This is a very interesting situation and one that is probably being played out all over Spain and not just limited to Spain as well I guess. 

I think we have to look at what is most important to us.  My view is that the most important thing is that the development is not left unfinished.  In th current climate RyF and other developers are bound to take the position they are taking and who can blame them. However, if they pay late then that is to their finanical gain and the community should find some mechanism to share in this as well; maybe by a late payment penalty or something like that. 

As far as AEA are concerned, I actually beleive they are doing a good job.  There is room for improvement and their handling of the debtors is apauling but to look to change them I believe would be a big mistake.  Let's concentrate on focussing them on what they should be doing and on doing it well. 

Am I right. but if RyF have not paid the charges they have no vote?  if so this is our time to make our point and look after the interests of the residents and the community as a whole, but lets be carefull to make sure it doesnt end in a breakdown in our relationship with the developer or the management company. 

Steve

I agree with Caroline - RyF cannot be exempt from penalty, they should pay the same as everybody else!   I can see the situation - and in these times we really don't want RyF to bite the dust! - is extremely sensitive, but at the end of the day we cannot penalise other debtors and not penalise RyF.  So, if they want to juggle their funds at this very precarious time in the market, then we can allow them to, but they must face the penalty.  End of story!!

I can't recall how much the Administrators' fees were last year, but did it really only work out to 110 dollars or so per apartment?  Is that correct?  I'm not doubting your word, Jeff, but I was under the impression their fees for DV were about 70,000 per annum already!  Although, saying that, I can't find the budget for last year!!!  I'm probably wrong, but I thought it was a lot higher.

Totally agree, Steve (I was obviously still typing while you posted!!).   We have to make sure AEA enforce the rules and RyF basically don't have a vote! 

This message was last edited by Pitby on 9/15/2008.

We need to understand what this shortfall means to the cash flow of AEA ..i have written to Sandra at AEA with a number of relevant questions...one being the impact of the shortfall.  The question of penalty could be answered by RyF's contribution to costs which they are not charging AEA...but we need to know what that is!! Also the empty apartments owned by RyF have not got people in using the facilities and if we can reduce the costs associated with these apartments and blocks there is  an argument that any penalty to RyF can be minimised. We can choose the way want to the penalties to work..it's our development.  I would like to hear more from AEA and Gerardo on this subject at the EGM before deciding what action we need to take.

Incidentally i do not think RyF can sell a property with a debt on it...it needs to be cleared before it is sold or the new owner takes it on!!

God point John - I don't suppose they can sell without paying up - can they?!

John

re your comment  "Incidentally i do not think RyF can sell a property with a debt on it...it needs to be cleared before it is sold or the new owner takes it on!!"

John, this is true.  The mortgage sticks with  the property in Spain.   

My (unclear) reference to "huge debt"   below  is  reference to the risk of an accumulated outstanding community fee on several  hundred apartments and not the outstanding mortgage.

I think RfY's claims of spending sums that they could have charged to the community is cloudy and not helpful.
 It's not the way to do things and it should not become a justification for them not paying fees.   However It might be a reason not to apply surcharge.
There are often grey areas of spend at the final stages of development and debates about whether something is payable by the community or the developer  or   split between the two.
As none of use have examined all of AEA's payments to contractors who knows what we might   discover that  is questionable?

I too think Jeff's point about two people marking AEA is an excellent point to avoid barraging them with repeatative emails.  Whoever takes up this role though need to expect
getting a few emails themselves !!  Volunteers  anyone? 
I might suggest a lot of Q&A stuff could go on the DV Wiki.  That should help.


Proposed Budget for 2008 was as below.  The was at the end of an attachment to the March 08 AGM minutes.  Not sure if it became the final budget.
I will post the attachment to the March 08 AGM page.

Presupuesto -           Budget

1          Mant.  General/General       Maintenance                          100.000,00

2          Limpieza         bloques          /Buildings       cleaning         177.964,32

3          Agua/  Water                                                                          30.000,00

Contratos/Contrac                                                                             3.000,00

4          Electricidad/Electricity           60.000,00

5          Vigilancia       /Security         93.600,00

6          Socorrista/Life           guard  14.000,00

7          Contro Sanitario/Sanitary      Control            6.900,00

8          Mantenimiento           Ascensores/lifts         maintenance  150.000,00

9          Telefono         ascensores/Lift          telephone       7.000,00

10        Administracion+        IVA/Administration+VAT       72.871,12

11        Seguro           edificio            /Iinsurance     building           20.000,00

12        Compra          Materiales/Purchase materials        10.000,00

13        Mantenimieto Piscina/Pool   Maintenance  2.000,00

14        Mant.  Jardines/Garden       Maintenance  221.328,00

15        Mant.  T.V.,    Portero           aut./Maint.T.V.and     entry   phones           2.000,00

16        Mant.extintores/Fire  extinguisher   Maint.  8.000,00

17        Gastos            de        oficina/Office expenses       2.000,00

18        Gastos            Bancarios/bank         expenses       3.000,00

19        Gastos            juntas/ Meeting          expenses       3.500,00

20        Informe           Auditoria/Audit           Report 2.500,00

TOTAL           GASTOS/       TOTAL           EXPENSES   989.663,44

 

 

Do not want to be too cynical. but maybe true RyF cannot sell without paying off the debt, but they  could only pay the fees on each one as they sell them !! Useful to see budget. I am not aware the door entry system has ever actually worked? certainly not an essential.
Bad enough doing this as a job, but would be interesting to see what the budgeted income was and any balances bought forward into the year.
Anyway on a far brighter note we fly over in about 3 hours.
Will hopefully be around the pool, come and introduce yourselves.
We are obvious to see, our 2 daughters lay in the sun all day !!!!!

Dave and Ann