Villa Owners Action Group
samples of some of the Letters between Owners and Management
Email to General manager regarding Guest Services 11 March 2008



I am sending you an extract from an email I received from a friend about their stay over the recent weekend.


It would appear that your staff are getting in the way of building the resort’s reputation.


Your attempts to ensure private villa paying guests are made to feel un-welcome have worked.


But the loser will really be Cypress and all the villa owners on leases who expect to receive a return from their investment.


I cannot imagine why places such as Tamburlaine would continue to recommend Cypress to their wedding parties.



Here is the extract from the email I received…


…..   It appears that it was not only the guests who stayed in the private Villas, but also guests who had booked and stayed direct with the resort had serious customer relations problems. 


One particular occurrence xxx told me about was that one of the "Cypress" guests was visiting a "Non Cypress" guest and they then contacted the reception via the internal phone to request a pickup from the resort shuttle - they were told that they could not utilise that service as that particular Villa was not entitled to use the shuttle service,  apparently even after explaining which Villa they are actually staying at - it made no difference.  The guests were repeatedly told that as they are not a paying guest of the resort, that they were not entitled to use any of the facilities - in quite a rude manner. 


xxx tells me that they had approx 70 paying guests who dined at the restaurant on the Friday night, a number of gentlemen played golf and a number of ladies used the Day Spa, effectively spending a vast amount of additional money direct with the resort during their stay.


xxx also explained that she had a prior arrangement with the resort to offer a shuttle service after their Wedding reception, which was apparently at Tamburlaine Vineyard.  The resort had advised her that they could not pick up the guests from outside the resort but if they were happy to walk across the road they would arrange to have them picked up from the front gate of the resort - apparently that did not happen.  The guests were left to wander up in the dark.  xxx also mentioned that they had arrangements for the resort bar to stay open for guests to attend after their reception, apparently this did not occur either. 


xxx had a meeting with the General Manager of the resort on the Tuesday and apparently expressed her disgust in no uncertain terms, but with little effect.


Another matter that is in direct relation, xxx had requested from one of the Duty Managers, that they hold onto their Wedding gift money within there safe.  The Duty Manager told her that they could not do that as they were staying in a Private Villa "ABC"  -xxx was of course not at all impressed by their lack of professionalism or courtesy.  xxx quoted that he told her "You must understand that there is a lot of animosity between the resort and the private owners"  -  This is certainly not something that should be discussed with a guest and it is extremely detrimental to all concerned.


Unfortunately, xxx has also told me that whilst her guests enjoyed themselves at her wedding and in the Hunter Valley in general, many have said that they will never stay at Cypress again.


End of extract…


Regards Michael


Letter to Strata Manager regarding the CA 16 October 2007

16 October 2007


Mr J Edwards

Executive Chairman

Strata Associates Pty Limited

Box Q210, Queen Victoria Building



Dear John,






Many thanks for sending the meeting papers in respect of the forthcoming Annual General Meeting to be held 31st October 2007. 


There is a lot of information to absorb first time around, particularly to an unfamiliar eye.  I have a number of questions.  If it helps obtain answers I am happy to come to your office, alternatively I am happy to receive a written response.  Either way, it will help the passage of the forth coming Community Association Annual General Meeting if answers were available in writing well before the meeting date. 


Regular Duty Fee.


1)      The August 2006 Minutes refers to a Regular Duties Fee effective 1st January 2006 of $1,119,360, so I presume this levy commenced on the 1st January 2006 although it seems not to have been approved until the meeting in August 2006.  Is this correct? If so why such a delay in obtaining approval and is it valid to issue the levy prior to approval.


2)      In relation to the 2006 Calendar Year Budget of $1,119,360 please supply a copy of the comparative “actual” figures for the same period?


3)      In relation to the Calendar Year January 2007 to December 2007, it is proposed the Regular Duties Fee budget be increased to $1,493,841, effective from 1st July 2006!  A retrospective adjustment back some 16 months.


4)      The proposed increase of $374,481 or 33.45% is extremely large and well in excess of inflation and substantially greater than in any previous year. How is it justified?  Please explain the cause for items of major variance and the basis used for calculating the new figures e.g?


                                i.            Electricity        –  up from $0 in 2006/07 to $33,222 in 2007/08.



                              ii.            Garbage           –  up from $76,452 in 2006/07 to $113,629 in 2007/08 an increase    

                                                    of  $37,177 or 48.63%.


                            iii.            Sewer             –  up from $138,132 in 2006/07 to $200,557 in 2007/08 an increase    

                                                    of  $62,425 or 45.19%.


                            iv.            Water             –  up from $14,040 in 2006/07 to $87,785 in 2007/08 an increase    

                                                    of  $73,745 or 525.25%.


                              v.            Buildings         –  up from $32,751 in 2006/07 to $68,753 in 2007/08 an increase                                             of   $36,002 or 109.93%.


                            vi.            Villa Cleaning –  up from $59,940 in 2006/07 to $77,423 in 2007/08 an increase                                             of   $17,483 or 29.17%.


                          vii.            Fire Safety      –  down  from $30,156 in 2006/07 to $17,268 in 2007/08 a   

                                                    decrease of  $12,888 or -42.74%.


                        viii.            Roads &          –  up from $30,900 in 2006/07 to $41,918 in 2007/08 an increase    

                        Drainage             of  $11,018 or 35.66%.   


                            ix.            Swimming       –  up from $11,484 in 2006/07 to $36,548 in 2007/08 an increase    

                        Pool                     of  $25,064 or 218.25%.   


                              x.            Gardening       –  $359,325 no change. A strange result?    

& Cleanup           


                            xi.            Gas                 –  up from $2,064 in 2006/07 to $9,138 in 2007/08 an increase   

                                                    of  $7074 or 342.73%.

                          xii.            Pest Control    –  down  from $38,024 in 2006/07 to $20,640 in 2007/08 a   

                                                    decrease of  $17,364 or -45.69%.

                        xiii.            Pay TV            –  up from $3,960 in 2006/07 to $9,490 in 2007/08 an increase   

                                                    of  $5,530 or 139.65%.


 We then seem to have a 20% mark up (profit) added in favour of CLG and on top of that the Community Association pays wages for unknown employees of CLG. Who are the employees, what are they paid and what do they do?



5)       Administrative Fund effective 1st November 2007.


I note the proposal is to increase the Administrative Fund from $292,966 in 2006/2007 to $357,565 in 2007/2008 effective from 1st November 2007, another very substantial increase of $64,599 or 22.05% and far more than any previous increase in earlier years.


The main big items of change include:


·         Roads              –  up from $37,389 in 2006/07 to $50,302 in 2007/08 an increase    

                                                    of $12,913 or 34.54%.   


·         Signs               –  up from $4,980 in 2006/07 to $21,810 in 2007/08 an increase    

                                                    of $16,830 or 337.95%. 


·         Pools                           –  up from $13,896 in 2006/07 to $43,855 in 2007/08 an increase    

                                                    of $29,959 or 215.59%.


Again please explain the reasons for these very substantial increases and the basis upon which they are calculated.



Unit Entitlements.


I realise that these were cast many years ago but do you know on what basis the unit entitlements were allocated in the first instance, as it seems to me the Strata Plans 1 to 7 incur a disproportionate total of the Administrative Fund as compared to the Community Development Lots relating to the Resort Centre.



Risk Hazard Report.

The Minutes of the meeting held August 2006 refer to obtaining a Risk Hazard Report.  Has this been obtained and if so can I please have a copy. 



Sinking Fund.


As I read it, unprecedented expenditure of $131,913.80, between 1st July 2006 and 30 June 2007 managed to almost wipe out the accumulated Sinking Fund balance of the previous 12 years of $149,602 and was over five times greater than expenditure in the previous year.  Only now is it proposed to increase the levies from around the $40,000 to $45,000 pa mark of previous years to $60,000 pa effective 1st November 2007.  Surely this should have happened years ago.  Can I please have a copy of the Sinking Fund Report prepared for the Community Association. 


On re reading the Meeting Papers, no doubt other questions will spring to mind.  In the meantime prompt and comprehensive answers to the above will get me started on trying to understand the past, participate in better planning and forecasting the future, as well as make the forth coming Community Association meeting more productive. 


Look forward to your early response.  I realise in preparing answers you will need to receive input from Ernie, so I have sent him a copy of the letter.


Yours sincerely,



Chairman SP 62848


c.c.       Ernie Hall

Michael Marks

            Allan Brown

            Alan Bish


Letter to General Manager 18 September

Mr Matthew Graydon,     no reply has yet been received

General Manager,


Dear Mr Graydon


                                    RE: PRIVATE VILLA 733 CYPRESS LAKES RESORT


You will be aware by virtue of correspondence from Mr Michael Marks and others, of mounting concern among Villa Owners about the declining value of their investment in Cypress Lakes Resort together with serious shortcomings in both acknowledging and addressing operational shortcomings. 


As further evidence of a breakdown in or lack of, systems and procedures, I draw your attention to the following recent events in relation to Villa 733.


  1. The Villa was occupied by a member of our staff from 7th to 9th of September. On leaving the resort the staff member reported to reception that in the second bathroom a blown light bulb required replacement and a new washer was required to fix a dripping tap. Written notes to this effect were placed on the vanity in the bathroom so there could exist no confusion as to what was required.  During the same weekend the beds were not configured as requested and inadequate bath towels were supplied (these were quickly supplied from housekeeping on request but should have been there in the first place). 



  1. Last weekend that is 14th to 16th September I stayed at the Villa and :


a)      The tap is still dripping.

b)      The light globe has not been replaced.

c)      The handwritten notes are still on the vanity.

d)      The carpet had not been vacuumed .

e)      The hard floor surfaces on the ground floor had not been swept.

f)        The horizontal surfaces of the furniture were dusty and had not been cleaned.

g)      Inadequate bath towels were supplied (again quickly rectified on request).

h)      We took one look at the overloaded breakfast restaurant and left.



Hardly 5 Star.  Likewise the golf course, while it looks good, it is in need of some serious maintenance and the reinstatement of the levels of etiquette expected at a golf course of this rating.


Circumstances described above are not isolated or confined to Villa 733.  Complaints are registered but simply go unanswered.  As the new General Manager, I trust you will take pride in restoring the Resort to the 5 Star status it once deserved but no longer lives up to.  I will next be staying at the Villa on Wednesday 3rd October and would welcome the opportunity to meet with you and Debbie Harry as it is in everybody’s interest to see Resort Management and Villa Owners working together and not disappearing to opposite corners.  Villa 733 will be occupied by other members of staff or friends of the company over the next four consecutive weekends and I trust they will not meet with the same problems I encountered last weekend.


I look forward to your response and helping to establish a more co-operative relationship between Owners and Management



Yours sincerely,





c.c.      Nicholas Ng

            Debbie Harry

            Michael Marks

            Christine Peachey


Letter to General Manager 10 September
Matthew    no reply has yet been received
I refer to your letters dated 24 August 2007 where in you state that you will not issue the Owners a certificate stating that Cypress have completed the works which we pay for.
I assume you are aware that I was appointed the Owners Representative at a meeting of the Owners and I am also on the Community Association and on the Executive of Strata Plan 57946.
I would like to comment that it would have been a good idea if your appointment and some information about you had been sent to all the Owners but Nicholas told me that this was none of our business. It seems that CL has not yet understood that the Owners are your internal customers and CL has a responsibility to the Owners for performance under its various leases and agreements. Could I suggest that you might like to consider hosting a meeting of all the Owners as there are many issues which Owners would like to discuss.
I assume you have reviewed the Villa Owners web site and can see there are many issues which need to be addressed. There are now over 220 Owners registered with us.
Let me comment on your letters. The Strata Executive has decided that we will not make payments at this time under this contract since we are of the belief that Cypress Lakes Resort Management (CRM) has failed to meet its obligations under this contract this year and in respect of prior years. If you do not believe this to be the case you should have no problem issuing a certificate that you have met all your obligations. Whilst you cannot do this - CRM not the Strata is in breach of its  obligations - the way it works is you perform the contracted services and we then pay, not the other way around.
I have asked but have not been provided with any information about the management of CRM - could you please provide me with the details of the directors the management structure and key executives.
I look forward to meeting with you in due course.
Regards Michael
Letter to CEO 23 August

Dear Nicholas,    no reply has yet been received


After speaking with George Bedwani at a recent meeting in Cypress Lakes last month, he recommended that I contact you directly with regard to the villa refurbishment process that I have been subjected to from Cypress Lakes Sydney office. I have been an overseas owner/investor with Cypress Lakes since 1999 and the last 10 months with the resort have been somewhat challenging. I am not contented with the contractual text book response from Ernie Hall that I received, with regard to the management of the refurbishment process. I hope to clarify with you briefly the situation and the process for rectification.


  • My villa’s (xxx) lease expired last year April 15 2006. I still haven’t received the new completed lease.
  • My villa was out of the leasing pool due to the villa refurbishment process from April 15 2006 until the beginning of December 2006 when it was introduced back into the new leasing pool; however the refurbishment process was not completed totally until mid December 2006.
  • From April 15 2006 to January 01 2007 I have spent A$ 41,847.23 in refurbishment, rates, interest, sinking funds and have received a return on investment of A$1,769.42.


Cypress Lakes Sydney office has had ample lead up time (7 years) for my refurbishment process and it is not acceptable that my investment should be unproductive for such a period of time, through no fault of my own. The fact that it has taken them 10 months to complete a simple refurbishment process, that would have taken a few weeks in Sydney, is again a difficult frame to understand.


I have spoken with George Bedwani at length about the refurbishment process and I have his full support with regard to my complaint. I hope my concerns are clear and we can work productively to resurrect the problems at hand and compensate me with my normal monthly returns for the whole period less an acceptable time period for the refurbishment.




Letter from Owner 23 August
Very interesting to read the letters and comments from fellow Villa owners and realise that the same issues have been worrying us all. Primarily the devaluation of the investment is of great concern and we have made the decision to sell at times only to find that nobody wants to purchase! We have noted the deterioration and general air of neglect at times and the housekeeping leaves a lot to be desired. The attitude of housekeeping staff is definitely not even close to "5 star". We agree that prior to re-furbishment the Villas were in an awful state. I requested we be moved from a Villa on 2 occasions. Once was due to stains on the carpet, veranda stained green from damp and moss and an offensive smell coming from the drains The other time somebody let a bath out upstairs and water came through the ceiling!! We had to be moved to another Villa at 8.30 at night. We have also experienced problems with reservations, incorrect bills and inaccurate management of our accommodation allotments.

It's very good to know that Villa Owners are now working collectively to bring about an improvement in the management of our investments.


Owner Letter to CEO 4 August

TO:             NICHOLAS NG      no reply has yet been received 

                   Chief Executive Officer for Cypress Lakes P/L



                   Director/ Secretary Dewamare Holdings Pty. Ltd


RE:             DISSATISFIED VILLA OWNER – Representing 20 Shareholders


DATE:          4 AUGUST 2007



We wish to draw your attention to a number of problems we have experienced in regard to our Villa ownership and membership of Cypress Lakes Resort over a period of 8 years.


Many of the following problems have been presented previously to Management with little or no reaction.


Having attended a recent Strata Meeting in Sydney, we found that everyone in attendance had the same criticisms of management, of lack of accountability by management and staff and of complete frustration in regard to our investment.


We will very be succinct in our presentation of these problems.


1.              Maintenance – virtually negligible with regard to painting, gardens, general upkeep.   No accountability for money supposedly spent on these items.

2.             Security – totally lacking and questionable.  We have personal experience of a break, enter and theft of our villa and after our investigation strongly feel that it was perpetrated from within the Resort.  We suggest security must be treated as a priority.  Boom gates, strategically placed, may be effective to keep out the non-members or sightseers.  The Reception and Receptionists should also be trained as a point of security for the Resort.

3.             It appears Staff lack professionalism. Our experience and use of the Dining Room, Pool and bar area has been less than acceptable due to the lack of ability of staff to serve, respond to requests or provide a pleasant resort-type experience. There does not appear to be a clear protocol to follow at Reception in relation to procedure and Villa owner bookings.   Care of Villas, laundry etc is questionable to say the least.  Where is Management accountability?

4.             Dress Code: Even the Australian Returned Services League Clubs (RSL) require stricter dress etiquette than the Cypress Lakes Resort, which apparently was to be a prestigious  Resort.  As a member and a Villa owner, we do not accept singlets and bare feet in a Dining Room.

5.             When we invested in the Cypress Lakes Resort, it was sold as a 4 ½ to 5 Star Resort.  In our experience and from all accounts of the majority of other Villa Owners, this rating has slipped to a possible 3 star rating.   This result is not acceptable to us and we, having participated in several meetings of Strata group, hold you and the Management of Cypress Lakes totally responsible and accountable. 


Apparently the previous Manager has vacated his position.  In our opinion he, and those before him, have not maintained a standard applicable to an investment in a Resort with 5 star rating. 

The new position must be sustained by a budget equal to the needs of the Resort and the applicant must present with specific qualifications for the job; we the members have a right to demand accountability. It goes without saying that he/she will require full support of the Directors to take the Resort forward from it’s current negative situation.


In our opinion, your responsibility as CEO of Cypress Lakes has to us, as Members and Villa Owners, been disappointing and to all intents and purposes, negligible. 


The position of the Resort in the Hunter Valley, with easy access to Sydney and the currently well managed Golf membership, create a strong basis for a very successful Resort.


We hope that you will address our questions and our criticisms and endeavour to bring the whole image and management of the Resort back to acceptable standards.


Owner Letter to CEO 4 August 2007

Dear Mr Ng,     no reply has yet been received


We are the owners of Villa No 617 at Cypress Lakes and have been ever since it was completed.  We bought it as an investment and have never used it ourselves, although we have stayed at Cypress Lakes from time to time.  Our villa is leased through Cypress Lakes


My wife and I attended the meeting of Strata Plan 57946 on Tuesday 31st July, this week, at which meeting I was elected to the Executive Committee.  We were prompted to attend the meeting due to our increasing concern that the value of our investment was dropping at a rate that is inconsistent with property values at the moment and that we have been unable to find a buyer for it in the last two years.


We visited Cypress Lakes for the first time in about two years a several months ago, prior to refurbishment, and were shocked and dismayed at the condition of the resort.  We were especially concerned at the appearance of the gardens around the Villas and the general aura of neglect and decay.  The paint work, especially on the external timbers (which was meant to have been repainted at seven years and obviously had not) made our villa look shabby and uncared for.


We could not attend the Owners meeting earlier this year, but have been made aware of the issues through the report on that meeting and the photographs on the Villa Owners Action Group web site.  Like everybody else at the meeting on Tuesday we were expecting Ernie and John to come up with the answers to the issues that had been forcefully put at the earlier Owners meeting.


We were totally dismayed by the ineptitude and total lack of accountability displayed by both Ernie and John.  It suddenly became clear to us where the problem lies.  There is clearly an attitudinal problem that must come from the very top of the organisation at Cypress Lakes and has spread like a cancer through middle management.  Nobody cares!  As long as the money is coming in and as long as no one complains - just carry on as before. 


Well, we are complaining!  And we are not the only ones. You will find, I believe, an avalanche of owners who are prepared to express their unhappiness now at the unnecessary deterioration of their investment and the lack of accountability by management at all levels with regard to the way that maintenance and appearance are being neglected, despite the fact that we are paying our strata dues.


We know that Michael Marks has provided you with a list of things that we wish to happen and information that we need to have.  We trust that you, personally, will ensure that the staff that you have under your control respond to these reasonable requests in an efficient manner, which has not been the case in the past.


Peter and Dorothy Meadows

Villa 617


Letter from Owner following the Strata Meeting 4 August 2007

Thank you for your extremely pro-active role in representing the interests of the Owners of the villas at Cypress Lakes.

You may recall that at the meeting of Owners which was held approx 3 months ago at Cypress Lakes, when emotions were running high, I stood up and tried to encourage a more positive dialogue between the parties. It seemed to me that the representatives of Cypress Lakes, Ernie, George and John, had attended that meeting totally unprepared for the criticism which they were facing.

It was my belief that George, Ernie and John should be providing a service to the villa Owners and that if we gave them sufficient time to understand our complaints then they could reasonably be expected to go away and research the issues and construct their responses.

It was therefore extremely galling to attend yesterday's meeting, several months later, when Ernie and John were once again totally unprepared and unable to respond to any of the issues raised. In fact their demeanour could only be described as one of total disinterest.

John seems to think that his role is that of Minute taker and doesn't seem to accept any responsibility for anything other than the protocol of the Meeting.

Ernie, on the other hand, offers a benign smile and a "dead bat" to every issue raised and had clearly not taken the many complaints of the Owners seriously, arriving at another meeting totally bereft of answers.

It is alarming that after Ernie had heard all of the facts about the lack of action regarding the garden, the painting and the general maintenance of the resort, he still used his proxy votes ( representing absent villa owners ) to try to approve the budget. Fortunately, the votes of the Owners present exceeded the proxy votes of Ernie but this was a clear indicator of the Conflict of Interest which Ernie Hall faces.

I was prepared to give both of these gentlemen the benefit of the doubt at the previous meeting but having seen their conduct yesterday I realise that they are as disinterested in the rights of the Owners as their behaviour at the original meeting suggested. This is a very serious problem and one which should be communicated to the CEO, Nicholas, in the most forceful manner.

We look forward to supporting you in the future and thank you once again for your tireless work on behalf of all Owners.

Best regards,

Nick & Sue Hillyard,

Another Letter from Owner following the Strata Meeting 4 August 2007
Hi Michael, et al,

We can only but agree with Nick. Dot and I were not at the meeting three months ago at Cypress lakes and can only go on what we have been told and read. However, we too were appalled at the attitude of both John and Ernie at the meeting on Tuesday. John seemed to become totally bemused when so many of us appeared and gave the impression of lapsing into unconsciousness, only awakening when asked a direct question, then lapsing back into his soporific state. Like Nick, we found Ernie's state of non-preparedness unforgivable; never mind that he had been advance warning three months ago, he should have had supportable answers on how expenditure for all major items was accounted for. He did not and tried to pass the blame onto others.

We agree with Nick that there is a total disinterest in the Owners' issues from all levels of management and, as this is a very serious problem, it is one which should be communicated to the CEO, Nicholas Ng, in the most forceful manner.

We would like to go further. It is quite clear that the windows are not being washed (and I don't mean pressure cleaned) nor have the gardens been attended to for many months, perhaps years. Our Strata was budgeted to contribute about $64,000 to those two issues alone - what happened to the money; why was it not spent on these two issues; what was it spent on and if it was not spent at all, where is it? We need answers to these issues.

Over the last six years we have travelled throughout India, SE Asia and China, on business. We have stayed at so many different hotels and resorts that we have lost count. There is one thing that separates the good ones from the bad ones, apart from the outward signs, and that is the attitude of the management and staff.

It seems to us that there is a serious attitudinal problem here, probably coming down from the very top; from Nicholas Ng himself. It would appear that the villas and their surrounds are not seen as an integral part of the resort, but just as a dormitory. The owners are quite definitely seen as an essential nuisance, as they provide the funds to keep the administration going. Management clearly do not see the value in maintaining and improving the quality of the villas in order to get Cypress Lakes back up to five star resort status, which is what we all though it was to be. Why spend money when money is coming in the door; why set standards for dress in the dining room when people are buying meals anyway; why repair gym equipment when no-one uses it (a cyclic argument - that one!); why maintain the gardens when all the guests want to do is drink in the bar............... and so on.

Clearly, the resort management and staff have no clear vision of what resort management and customer service really is or how important it is to maintain accommodation and surrounds to ensure that the environment is attractive, not just for the Owners, but also for the sort of clientele we would like to see use the resort in increasing numbers.

And at the end of the day, we would like to see our investment improve, not deteriorate.

Perhaps we should ALL have a meeting with Mr Ng and tell him personally what we think of his style of management.

Like Nick and Sue, we look forward to supporting you in any way we can in the future and we are extremely grateful for the work you have done in bringing us this far.


Peter and Dot Meadows


Another Letter from Owner following the Strata Meeting 4 August 2007

A fair summation of the meeting, will be interesting to see the minutes from John.

Is it worth noting that the proposed 3% increase in Strata Management fees was rejected with no comment or attempt by John to justify the increase. It appeared to me that John did not support the increase. Makes one think that Strata Associates are aware they are not earning their money.

Regards Richard Cranmer


Letter from Owner to Michael Marks 23 July 2007

I am the owner of Villa xxx and was one of the 70 that attended the owners meeting on 17 May 2007.  You are to be applauded for everything you are doing to rattle every ones cage, and in establishing and maintaining such an informative website. Well done…and many thanks.


I would like to provide you with my proxy for the next 12 months – should I send the completed proxy from to Strata Associates, and email a scanned copy to you???


Specific items from the Annual Report that concern me are as follows, and are listed here only to support issues that you propose to raise at the AGM:


  • Levies for Units 619 and 627 are in arrears by considerable amounts ($6128 and $11452 respectively) – the strata plan manager should explain at the AGM what actions are being taken to recover these amounts?


  • Budget for 2007/08 for Gardening and Cleaning is $53,045 – this is a similar amount to last year, and must be close to the cost of a full time employee equivalent for the 40 villas within the strata plan….this seems excessive for the minimal amount of work done in the past.


  • Budget for 2007/08 for Window Cleaning is $12,270 – also a similar amount to last year, and also seems excessive given that I have some reservations that the windows of my villa were cleaned at all during the last 12 months other than when I did them myself.


  • Community Association Admin Levy $16,518 – the report doesn’t seem to provide details of what this encompasses.


  • Generally the strata levies seem excessive relative to the value of the villas


Comments from Owners  24 June - 5 July 2007

1.           Thank you for the good work you are doing – please keep it up!


2.           As an owner abroad, I thoroughly agree with your remarks of the meeting and I thank you for forwarding the latest notes on the meeting.  I appreciate your work and look forward to being kept up to date.


3.           I am really glad to hear about the owners’ actions seeking the truth and improvements.  I have been kept in the dark and have been suspicious due to falling property prices.  Please keep me updated and I want to help contribute to ensuring return to professionalism in managing Cypress Lakes.


4.           Very happy to see some progress, well done.


5.           Agree with action


6.           I would love to be able to sell.  Was promised heaps very low on delivery.  Now there are no buyers.


Window Cleaning Charges - Letter to CEO 6 July 2007
I just wanted to summarise what we discussed at the meeting in respect to window cleaning because in the end George had no actual facts and had not responded to the previous question of justification for the window cleaning costs totalling $59,940 for all strata plans.  We still have not been provided with information as to who this was paid to and under the circumstances we think we should be provided with the invoices that justify the amounts.
Being more specific at the meeting we pointed out that the budget for say one of the strata's e.g SP55400 was $14,858 and there are 40 villas made up of three and two bedroom villas. 
Using a raw calculation, i.e. each villa owner is being charged $371.45 per annum for two cleans which equals 2 x $185.72. 
The issues that concern us are as follows:
1.    There is clear evidence that no window cleaning took place over the last 12 months and numerous private villa owners have confirmed this.
2.    To clean the windows the screens have to be removed which means that private villa owners need to be involved for the purpose of access.
3.    George has provided a quote from Raymond Terrace Window Cleaning indicating a charge of around $40 per villa is the market rate.
4.    Using logic it shouldn't take more than one hour to complete a 3 bedroom villa which would be about the $40.
So it would appear from all of this that something is very wrong and that the owners have been excessively charged for work that not only has not been performed but is at a rate that is not even sensible.
I think the owners would want a full explanation and justification of the charges that have been made.  This sort of matter goes to the heart of the owners concerns about strata fees.
Regards Michael
Michael Marks - Owners Representative


Comments from Owners  16- 23 June 2007


comment: concern about decreasing resale value of villas and the impact of
heavy rains on general maintenance



comment: I support your efforts and share your concerns in many respects.
The key issue is to ensure in moving forward that the Villas are properly
maintained and there is improved accountability by the resort and
communication with Villa owners.



comment: Being resident in South Australia makes it difficult to monitor events at CL, hence your info much appreciated - keep up the good work. I make the following comments on what I regard as key policy matters: 


(1)   Sales.  There needs to be one dedicated and high quality agent to act for sellers of  units.  There was one when I purchased my unit, but so far as I am aware there is no preferred agent should I decide to sell my unit at any time in the future.  Clearly this is a major factor in achieving satisfactory prices.

(2)   The departure of the previous major shareholder and managing director has been of financial benefit.  The new owners of CLG pay rent promptly as required under the lease whereas previously, rents were paid up to 3 weeks in arrears thus providing interest free finance for a struggling enterprise.


Why is there no publicized scheme whereby owners can (subject to appropriate conditions) gain access to their units for a defined period each year, a system common to many similar resort developments?  I will now follow future developments a C.L. with renewed interest.  
p.s.  I have some knowledge of developments like C.L.  As a founder and project manager of the Cape Schanck golf resort on Victoria's Mornington Peninsula, (now owned and operated by the RACV), as joint founder and project manager of the adjoining National Golf Club and a Director of National Golf Holdings for 10 years I have "been there and done that" - as it turns out very successfully!! (Incident- ally the NGC now operates 3 golf courses by Robert Trent-Jones Jnr, Greg Norman, and  Peter Thomson



comment: Thanks for your efforts in keeping the managers on the ball. Much appreciated.




comment: We are so glad that owners have gathered together to fight for our rights, thanks very much to the persons who organized these. We have also queried with the strata manager about the extremely high strata levies with poor maintenance, and suspected that a lot of strata charges may belong to the Resort's operational cost.  We don't mind paying $5,000 - $10,000 and also suggest other owners put the same amount of money -- it will be around one million dollars in total, to get a good solicitor and auditor to work for us to protect our rights.



leased: Leased - under new scheme arrangement since April 2007
comment: We would be keen to hear what other villa owners feel about the
current arrangements, strata managers etc.



Thanks guys it is very comforting to see this group established and taking a pro-active approach - we bought in at the peak of the market in 2003 and re-furbished in 2005 - sadly our Villa has probably dropped $50k and if anything can be done to re-invigorate the resort is very positive -



comment: Very interested in your committee, we are seriously thinking of
withdrawing our unit from the hotel and would appreciate the views of



comment: Delighted to see you have taken up the case on behalf of Villa
owners.  We are dissatisfied with a whole range of service related matters
but in short we have the view that the resort is more 3/4 star not 5 star.
As you know the operator has obligations to maintain the resort to 5 star
standards which has not occurred.  We are happy to participate in any
 lobby group activities



comment: thankyou for the updates by mail - I share very similar views



comment: Thankyou for efforts to protect owner's interests.


Comments from Owners  1 - 15 June 2007


comment: We would like to be kept informed as we were not aware of these
issues. We are concerned that strata fees are high, but return from leasing
is low. We paid some $25,000 for refurbishment last year. Have not visited
the villa since this was finished to inspect the work. Am impressed with
Debbie's service.  My company will be holding a conference of some 200 delegates in the Hunter Valley in 2009 and we had been considering Cypress Lakes as the venue, but I am now not so sure in the light of the matters raised here. I am also looking at the new Crowne Plaza.



comment: Villa maintenance is shoddy, and not consistent with the resort
marketing as "5 star accommodation". We stay at our villa periodically and
note some aspects are not repaired from one stay to the next (up to 6
months). This ranges from regular/routine maintenance matters (such as
replacing light globes) through to fireplace damage and other structural
issues such as the sinking of the paving at the front door. We report
matters that need to be addressed to resort maintenance but they are not
always fixed by the time of our next visit.



comment:  Enquired about selling my unit and was told it would be almost
impossible as none have yet been resold!



comment: Unfortunately we were on holidays when you held your recent
meetings and could not attend. We are also concerned about the condition of
our property, the lease conditions with the resort managers and endorse all
the issues you have raised at your meetings with the management. We would
like to be kept informed on all the issues raised. If we can be of any
assistance in the future, please advise. 



comment: Not sure if the issues raised also applies to Elysia but worried if
it is the same management that the performance likely to be similar.



comment: Thank you for the update on matters at CLK.
Initially I attended a couple of the Strata meetings but given our Villa was
leased and the CLK group paid for the strata fees, I was comfortable that
CLK Group's interest and mine were aligned.   Since we changed to the new lease, our returns have dropped significantly and we are now required to pay the levies.  As evidence by the recent correspondence, the owners are now taking more interest in the affairs of the resort and I welcome this change.  We too are concerned at the issues raised and have noticed a general decline in the standards at the resort.  I look forward to  being able to contribute to the success of the resort going forward. 
I would like to add however, that I have always found Ernie Hall to be a most honourable man who has tried to do his best in the interests of the owners, noting that he indeed is also an owner! Ernie has undertaken this role due to the lack of interest from the owners. As such, we the owners have significant responsibility for the current situation.



comment: I am very disappointed with the management for long time. They
treated our owner worse then the general public. They don't respect the
owner. I haven't been to Cypress Lakes for long time. I rather go to other
resort then our owned. I will fully support your committee.



comment: Can't comment, as the last 2 years I have been to the Golden Door
in Qld, but I intend to stay a week at Elysia in Sept this year and will
have a good inspection. Was upset to see the pictures. Most disappointing.



comment: Thank you for including us in your mail out. It sounds like there
are a lot of issues to be addressed at Cypress Lakes. We are owners at
Elysia. Is that the same strata plan as Cypress Lakes? I don't fully
understand how it all works.



comment: In agreement with all points raised by owners at last meeting. We
have unresolved building defects issues raised with management shortly after
purchase (6 years ago).We share the common concerns raised RE the state of
the resort. Hope to make the next meeting.



comment: Excellent initiative. I had several discussions with Ernie Hall
prior to signing my new lease but never got closure on the budgeting and use of strata funds. Also concerned about declining values. It would be interesting to get the views of an independent valuer/agent as to what needs to be done to increase the resale value of the villas in what should be a 5 star lifestyle resort!



comment: I recently had a villa inspection and are happy to say that most
problem items have attended to, the garden area immediately outside 702 is a
disgrace - but otherwise all is good.



comment: We originally bought our Villas in 1995 and as such we were one of
the first to get slugged with the new contract. What a process. It took them
months to get it to us with no concern for our position at all. When we
complained we were told "well if that's your attitude, remember we don't
have to offer you a contract". After years of loyal support for Cypress
lakes this is the way you get treated by these people. We're with you 100%.
Let us know what we can do. We didn't go to the last meeting because we both
work and would have had to take time off to make the meeting in time. Why
can't they have a meeting in Sydney?



Comment:  Considering that it was originally offered as a weekend stay I do not find
that particularly fair but then again being an owner I have yet finding
doing business with the resort an easy one and normally a headache. You seem
to change the rules when it suits you. I expect to be able to take that
night during a weekend not that I am in a hurry to return !


I was there two weekends ago and had to pay for it. The front door fell off
and it took hours to be fixed meaning we had to stay in our room to protect
our goods whilst the unit was open to the world. A golf booking we made was
not in the system because someone else with the same name also made a
booking and you "assumed" it was the same person (without asking obviously) and cancelled ours. The carpet in the unit had been not vacuumed in some
time and was covered in white fluff. The blanket on the bed had certainly
seen better days and all the rooms in the villa were full of spiders,
spider webs and hundreds of other insects - either alive or dead in the
corners. And once again having our room serviced after 10am proved to be a

I have yet to have a pleasant stay, without some sort of problem and I do
have to question my ownership of the villa. There are always what I see to
be serious problems which is why George gave me that free weekend in the
first place. 

I would have sent this email to George but do not have his email address so please pass this on to him.

Letter to George & CEO 12 June 2007
12 June 2007


Thank you for meeting me & Christine today to do a walk around the gardens - I am sure you now see the extent of years of neglect and you would now understand the comments made by the Owners at recent meetings. The landscape issues have not being solved by the current clean up and the problems remaining are significant.
I would also like to take the opportunity to record some observations which occurred over the weekend during the storms. Some of these were raised with you today and I would be happy to provide more details - in the main it demonstrates that a risk plan for such events does not exist and this results in reputation loss for the resort and loss of revenue for everyone.
  • The front desk does not have a policy/procedure to handle Complaints in these circumstances - which leaves customers very unhappy
  • There are no emergency lights on any pathways
  • Guests had to find their room with no guidance from front office when resort in total darkness and heavy storm
  • There were no flash lights provided to guests in villas or checking in - guests were offered tea light candles in the rain to get to villas
  • There is no generator back up at hotel - which meant there was no reservation system available and no lights 
  • There was no area set up for guests to come to in the hotel for showers or hot water - some guests had Showers at the Vintage
  • The roads have no external white lines, have poor road drainage and most no gutters - this is a high risk in these conditions 
  • The poor villa path drainage meant flooding on all paths around villa and of course everything was dark - all guests had to get wet
  • The Villa TV systems have been out for days
For your information I noted that transport car rego-awz 85j has an expired dec 2006 Registration sticker on it - I hope this would not effect any guest insurance claims.
On the matter of our recent meeting with you indicated that you would set up a meeting with Nicholas around the 19th June - have you got any dates in mind.
Could you please advise your progress in providing the information you agreed to provide in that meeting - of immediate concern are issues to do with the painting.
++++++++++++++++++  REPLY FROM GEORGE+++++++++++++++++++++++++++
13 June 2007
Thanks for your time yesterday, I feel it was well spent, constructive and informative.
Our discussions re the irrigation, the plants and gardens in general gives food for thought and Christine's input was welcome.
But I must ask the question, what is your reasoning for questioning the operation of the Hotel.  The operation of the Hotel is not
the concern of the strata owners, it is a private operation.  
Also, it really bothers me that two of the items in your email were totally inaccurate.
1.  The registration of the Tarago - which in fact, has the current registration sticker attached which expires 27/12/07
2. Given our conversation, which I brought up re  television reception, I see no need for your email to be derogatory given that  the technicians were on site as we met which I informed you at the time.  Furthermore, this problem did not affect you as you advised me you have your own dish.  For your information, amplifiers (damaged in the storms) have had to be replaced on a number of the sections of the Resort, which were not readily available in the numbers required.  The amplifiers have since arrived to be fitted tomorrow and reception should be up and running by Friday.
We do not control the weather and have done all that can possibly be done given the fact that the area has been declared a Natural Disaster.
Why not give credit where credit is due, that the electricity was put back on in a mere 24 hours rather than the week we were originally advised by the energy supplier.  We are all incredibly lucky not have suffered  much more inconvenience, loss and damage to property.
As you can appreciate recent events ie last weekend held a lesson for all.  Since the construction of the Resort there has been not an event of such magnitude which caused so much damage and disruption to both the property and the operation of the Resort.
Your interference in the operation of the Hotel is not warranted nor appreciated.
In regard to the meeting, it is imperative that Ernie Hall be present, he is the link from the time of original planning and construction  to the present.  Ernie returns from vacation early July.  As soon as Ernie returns, we will give you a few dates which will suit our end in the hope that at least one of those dates will be suitable to the committee.  Also, I know that Nicholas will be here early July, so there should be no problem in attendance from his end.
To go forward, let's stick to the issues which are important with no interference in the running of the Hotel.

++++++++++++++MICHAEL RESPONSE TO REPLY FROM GEORGE+++++++++++++++++++

Your email really needs a detailed response since it would seem to me that there is a big difference in how you the "Operator" see the relationship with the Owners who provide the assets and expect both income and Capital returns.
"Cash returns to investors to owners" are a function of operational matters.
The Grounds. I am very pleased to hear that you were grateful that Christine and I spent time with you to walk around the grounds to view not only the poor standard of gardening around the villas but also the sloppy housekeeping practices, remember the rubbish left outside the villas in the form of cups and bottles, used soaps and the "sock" that had been on the path for several weeks.   I wonder if we had not pointed these matters out to you that your staff would never have paid any attention to them.  I ask you, is that a hotel housekeeping operational matter which impacts revenue returns to the Owners as a consequence of satisfaction??  I think you will agree that it is. 
If the rubbish lies around for weeks on end and Christine notices it in her walks what is to be done?  Is Christine to pick up what your hotel housekeeping staff don't or are the trainers of housekeeping staff going to point out that it should be collected in their rounds every day.  Rubbish makes the villas look very tardy - does this impact on client satisfaction?
Of course that only adds to the tardy gardening status around the villas as you saw for yourself.  Please ask Darren what is the point of pruning dead plants?? Which is what we showed you outside so many villas.
Housekeeping. Are the housekeeping staff also going to be trained to not run over the irrigation spikes either running them flat or breaking them.  This is surely another operational matter which needs attention.  It effects Landscape and watering and adds to the dead plant problem.
Attention to which has not been given any quality training.  Christine and I on our walks have observed the manner in which housekeeping and maintenance staff run off the path into the gardens.  What do you think is going to happen?  Does this not go back to training?  Operational??
Registration. George, Christine and I noted with your staff member, Evan, that the Tarago had an expired registration sticker.  It was clearly a 2006 sticker.  Evan noted this and said he would look into the matter immediately.  This information to you was by way of advice so that in the event that registration had been overlooked, which in a very busy establishment can easily occur, that it would be rectified before an incident occurred with guests on board and there be an insurance situation.  My understanding of insurance requires that the vehicle must be registered.  It is mandatory that all vehicles must display the current registration sticker and that sticker alone. 
Regarding TV reception.  George you are well aware that there have been problems with reception in the resort for many months.  In fact since we arrived last December the reception on the Resort TVs in villas has been less than acceptable.  I do not for one moment consider that the current situation caused by the storms is room for any excuse.  Last time you suggested that the reason for the poor reception was because Cypress Lakes Resort was in the "country" and that it was difficult to get service personnel.  Yes we do have our own satellite and therefore downstairs we have excellent reception but upstairs where we can only obtain service from the hotel is very poor.  Not only are there only a few channels providing any coverage the speed of the voice is slower than the picture and the quality of the picture is very poor.   This impacts guest satisfaction and hence resultant booking and cash flows to the Owners.
Local Trades. George, you so often suggest that because we live in the country you cannot get the service you would get if the resort was in Sydney.  I would like to advise you that I utilised ONLY local trades when renovating my villa.  Perhaps you are not asking in the right circles for assistance.  It seems that other resorts in the area do not have the same problems that Cypress experiences. 
Weather. We do not control the weather.  But I am sure this disaster is not the only disaster that has occurred.  The Hunter experiences regular blackouts and there is no procedure in place either at the front desk or in any other staff to assure guests, offer assistance, placate angry insulting guests to front desk.  I think you will agree this is an operational problem that needs priority attention - it directly impacts on revenue to Owners - I would have thought Cypress would have a concern about it as well - you had to empty the resort - and may be too soon.  
Hotel. You suggest that it is none of our concern how you run the hotel.  I think you need to consider that if there were no villa owners happy with what is being offered in the lease arrangement or in the costing of the fit out or in the way your staff are trained in all of housekeeping, landscaping or maintenance that you may not even have a hotel to run.  Now I think you need to consider that the manner in which you run the hotel very much affects the attitude of whether villa owners give you the right to use their property.   Whilst Christine & I we are not hotel operators ourselves, we do travel extensively and see how other 4 star and 5 star hotels manage situations of failure of services.  Cypress has none of those practices as evidenced by the recent catastrophe. 
Credit where credit is due:  George you firstly told both Michael and I that it could be 2-3 days before all services were back on at Cypress.  It was never one week.  Yes, we were grateful that power was restored within 24 hours.  But of course we do have another home to go to.  Perhaps there are some villa owners who don't have another home to go to.  What strategy did Cypress have in place to offer them in the event that power was not restored for one week?  I do know that one villa owner was particularly unwell on the Friday evening when we spoke and was in no state of health to travel anywhere.
Front Desk: Whilst you now say that you do not want our intervention in the hotel operations you thanked Christine for her intervention at front desk when an abusive guest was hot headedly dealing with your reception staff.  Your reception staff had no training in dealing with difficult guests. You observed the full incident and did nothing.  Difficult guests do not only appear when there is a natural disaster.  I ask you why your front desk staff are not trained in dealing with difficult guests?  Is this an operational matter or what??
Ernie Hall. As for waiting for Ernie Hall to return from holidays to meet with Nicholas.  Have you not worked out yet that Ernie is the major factor in a lot of the Owner concerns.  His presence over the 12+ years of Cypress Lakes has done nothing to enhance the business of running an operation such as is attempted and therefore the cash returns to the Owners
If at the meeting of villa owners we were to ask for a vote of confidence or otherwise in Ernie Hall - he would have been very disappointed.  No-one has anything positive to say about Ernie and we don't want to meet with him. 
I first wrote to Nicholas Ng on 1st April, 2007 and still to this date I have not had the courtesy of a proper response from him nor has he agreed in over three months to meet.  I know for a fact that he has been at the resort on occasions since 1st April, 2007 and find it extraordinary that he has not made himself available to quell in any way shape or form the concerns of the owners.   
And we are still waiting on items agreed at our recent meeting.
I would have thought that Cypress by now should realise that there is a major issue here and delay is not the correct response - Both John & Ernie suggested we take legal action - is that the level we need to move to?
Regards Michael




Letter to all Owners - based on Strata Roll - June 8, 2007

This is an important notice


Open Letter to Cypress Lakes Villa Owners

Friday, June 08, 2007

From Michael Marks & Christine Peachey


Dear Owners


You would have received in the mail last week notes from a meeting of Cypress Owners held on the 17 May. These notes were prepared by John Edwards of Strata Associates, the Cypress Lakes Strata Manager.


A meeting was called by Cypress as a result of growing concerns from several Owners about many aspects of how Cypress was now being operated and against a background of falling resale property values. Cypress offered to respond to the many formal questions which had been tabled before the meeting.


We believe the notes of meeting do not reflect the actual tone of the meeting or the real issues raised and are misleading to the many Owners who were not present. The Owners did not get any satisfactory answers.


As a result of the outcome of that meeting at which 70 owners were present, owners voted en- mass that they were UNHAPPY and wanted more specific answers.


Subsequent to this meeting two Owners representing all Owners have met directly with George Bedwani (General Manger) and Ernie Hall (a Cypress employee and our Community Association Representative)


At that meeting Cypress agreed to make some changes, which is a good start - but there are some significant outstanding issues. Of immediate concern is the painting process which is underway and possible under funded sinking funds.


The other key items which we will be pressing include - fairness of resort operator agreement, the justification of the Strata Fund budget numbers, the repayment of past strata fees which were clearly not spent on landscape, window cleaning and other tasks, getting compensation as a result of damage done in water blasting the balconies and hence damage to the timber furniture, reviewing the approach taken to painting and problems with sinking funds, the conflict of interest occurring with the way budgets are set including the roles of Ernie, the future role of Strata Manager and Cypress accountability to Owners for past actions.


We would like to advise you that the full details of this meeting and the history of events leading up to this can now be viewed on a special web site which has been established.


Please go to …


Once on the website you should register your-self and we will be able to send you email alerts as new matters arise.  We will not be sending post mail again so it is important you provide your email contacts – this is not part of the Strata Manager records.


If you have any questions about any of this please use the web site to make any enquiries of the Owners’ Committee which was established to represent you.


Email to Owners who have registered their email address - 8 June 2007
Dear Owners
Michael Marks & Ken Owiti,  as Owner representatives, met with George and Ernie last week. The minutes of the meeting have now been posted on the website - Cypress agreed to many things which was a good start  -but there are some significant outstanding issues.
Of immediate concern is the painting process underway and under funded sinking funds . We will continue to press the issues with Management - they have a lot to answer for.  The key agenda items which we will be pressing include - fairness of agreement, justification of existing budget numbers,  past repayment of fees which were clearly not spent on landscape and windows, as well as damage done in water blasting, approach taken to painting and problems with sinking funds, the conflict of interest including the role of Ernie, the future role of the Strata Manager, and Cypress' accountability to Owners for past actions.
Please read the minutes here... 
You would have also received in the mail the notes from the Owner's meeting of 17 May - prepared by John Edwards, which he sent out to all Owners without enclosing our version.
We believe these minutes do not reflect the actual tone of the meeting or the real issues raised and are misleading to the many Owners who were not present - all owners present at the meeting were UNHAPPY and the questions and concerns came from many owners, not just Michael as he suggests. We also think that many of his answers (which were not given at the meeting) are also misleading, but you decide and let us know what you think.
You will also find on the web site a letter from Ernie about how he felt the meeting went - he doesn't comment too much on the meeting other than stating that the panel did answer questions  (which we did not think happened at all).   Have a read of this and we welcome youcomments.
Because John Edwards version of the minutes were posted to all Owners - we will also now post mail out to all Owners.  We will ask all Owners to register on the web site to keep informed of the situation from the Owners point of view.


Letter to Debbie re Villa Issues 22 May 2007

a few things that need looking at please

as discussed, the DVD / CD seems to have gone missing, as have a couple of cushions in the lounge. 

As you can see I've cc'd George Bedwani as I really think the cleaners should be keeping an eye on these things .. surely it's not that difficult for them to have a bit of a check list when they're cleaning ……..3 TVs - check, 1 frig - check, 1 DVD - None hmmm,  probably should tell someone.

As previously noted, the shelf in the main shower still slopes forward so anything placed on it just slides off and the taps in the basin in the downstairs toilet are still lose - just little things but annoying for a 4+ star resort.

In addition, one of the dining chair's legs is missing the plastic plug on the bottom so it wobbles (another thing the cleaners should easily pick up)  I've taken the metal staple out of the bottom so it's no longer scratching the wood floor!

the dishwasher wobbles ……. again something the cleaners should note given they supposedly use it.

the rubbish bin under the sink no longer has the lid automatically lifting when the door opens ……. again the cleaners..  etc etc

the only other thing guests might like to know is the change in the TV program.  It still  says we get Fox Sport channels 1 & 2 whereas the only channels we now get are Fox Sports 1 & 3 (don't think this is CL's fault , rather Austar, but still it's important if the guests think they might go back to the room and watch the MotorGP or the AFL - which are both only on Fox2)



Letter to Ernie 2 months ago - no reply received
22 May 2007

It is some 2 years since discussed the condition of the gardens and outsides of all the units, especially the 5 series.

               At the time 512, which we had owned some 12 years, required woodwork repairs, window cleaning &outside paintwork, now in very poor state.
               Windows over this time have been cleaned once, perhaps twice and a few nails banged in, serving no purpose whatsoever. I am aware that the painters have started, but have now stopped due to heat and the sighting of a snake? What a load of rubbish!
               I believe your job as our representative at Cypress is to follow up & carry out a work program? Since owning 550 some 2 years no window cleaning, except by me & downstairs only.
               We have been paying into the sinking fund over 12 years and received nothing in return. Written in the contract with the Strata plan is outside painting was to be carried out within 10 yrs. Perhaps you may be able to explain this further?
              There is more than enough, as you know, in the sinking fund to carry out all these tasks.
               The whole place including gardens, paths is unsightly, a bushfire hazard an a huge embarrassment to all owners and their guests, especially to those of us, who are trying to sell!
              We have spoken to our solicitor and he assures us that we have a very strong case.
              Hopefully we will not need to resort to this?
               We would appreciate a reply within 14 days with some answers.


Letter to CEO
20 May 2007
On Thursday night Ernie I mentioned to you that painters were at my Villa.
I have been thinking about this ever since.  The painters themselves have done a great job, particularly considering the timber they were working with and I understand that some areas required three coats.
Presumably they are being paid from owners' monies and in this regard I would like you to consider the following:-
1.    Do you not think it would have been more prudent to delay the painting until some tradesmen had been through the Villas repairing all broken timber work, particularly around the deck railing uprights, the lattice work and the roof slats?  Paint, although welcome to old timber, is not a solution to broken (and sometimes dangerous) slats.
2.    I notice that the painters are using ladders and scaffolding.  The areas being painted are the windows, main entry door, front porch, sliding doors onto the decks, deck railings, lattice at end of deck, slats over the deck and the poles which support the decks.  I would have thought that if it was worth painters using scaffolding, and they were painting the timber, then you would have instructed them to paint the timber slats on the air vent roof line and the eaves.  The birds have attacked my air vent to the point where there is no paint on some of the slats and they will deteriorate with weather.
3.    I can't believe that you would think the timber needed painting and yet the actual building didn't.  Why again bother with scaffolding etc and not paint the building?  One disruption would surely be better.
My conclusion is that you have decided to do a rush job to keep owners happy -  a quick fix is just an added expense to owners - you are not spending money in the best interests of owners, just trying to make it look like you are doing something.
Perhaps you would say that whatever you do is not right - well, this really needed a little more thought - it is a band-aid solution which is costing us money.  This is one of many instances when discussion with owners prior to engaging painters would have been worthwhile.


Letter to CEO
19 May 2007


Dear Sir
I am the owner of unit 557 in the above resort. I attended the meeting on the 17th May 2007.I was disappointed that a member of your board did not attend. The three representatives you had at that meeting gave me no confidence that they could run a facility the size of Cypress Lakes. I believe they are all out of there depth.

The language that your Mr. Ernie Hall used was disgraceful, he could not answer questions from the floor and he continually said he did not want to be in his position and would not stand at the next general meeting. This is not what I as an owner wanted to hear from a person responsible for spending $1.1 million of strata fees paid by the owners of the units.

Your board has to address this growing problem with the unit owners as it will not go away. As more units are not leased by your company there will be more disgruntle owners paying strata fees which are well above those paid in similar vacillates.


Should this situation go to the media they will have a field day with your management and this will not help your share price. You have an obligation to notify your board members of this unhealthy situation in a facility run by your company I would like to hear from you as to what action will be undertaken to address this issue.



Letter from Owner to CEO
18 May 2007

My name is xxx and I own Villa 601 and have recently purchased 618. I wish to table this letter as I am now unable to make the meeting this afternoon.

I would like to echo many of the recent thoughts of xxx (Villa 740) and add a few thoughts of my own.

Firstly, can I say that holding the meeting on a Thursday afternoon makes it very difficult for many Sydney based owners to attend. I would have been pleased to attend a meeting in Sydney (or Cypress on a weekend) but find it very difficult to slip away for 4 hours on a business day.

I would also like to start by saying that Deb Harry and her team are a delight to work with and I wish to commend to you, the sterling job that she does for the owners, guests and the wider resort. Nothing seems to be too much trouble for Deb.

My main concern is that each Strata Scheme extracts very significant funds which appear to be very disproportionate to the expenditure incurred by my scheme.

My reference point are the Villa's that I own at Horizons Resort in Salamander Bay, which are essentially the same setup as at Cypress. My total out of pocket's per quarter are in the range of $380 to $480 per quarter depending on whether it is a 2 storey or 1 storey Villa. The annual cost represents less than 0.7% of the value of the property which falls within the range of 0.5% to 1% which is the accepted average by the industry.

My costs at Cypress are $1400 per quarter which (when annualised) represents approx around 2.5% of the property value which is significantly outside the prescribed range. I would welcome a closer inspection of the books which would show the contributions (I believe some schemes are as much as $30,000 in arrears) and expenditure. Perhaps this will make the matter clearer to me and others.

I was able to purchase my properties within the last 6 months at a significant discount to the original prices paid by the original owners. While this was my good fortune in the short term, it is certainly worrying that values have plummeted to such an extent (notwithstanding a general slump in the market). I hope you share my concern as it has an impact on the wider resort.

Please permit me to paraphrase James Woodburn's words, as they reflect my sentiment - "I am very concerned by what I have seen and heard to date with respect to the responses from CL management and am worried that CL Management may be demonstrating unconscionable conduct, and I wish to seek an assurance that CL is not in breech of   Common Law or it's Statutory Duty with regards to it's responsibility to the private owners. I am led to believe that CL may be abusing the majority voting rights it holds through the leaseback pool of Villas it controls. I am also informed that an employee/contractor (Mr Hall) to CL is able to exercise owners proxies in a manner that may not reflect the interests of the owners or the strata scheme". This is perhaps the most worrying aspect of the arrangement.

I wish to make my self available for any future meetings and correspondence and look forward to working constructively with the resort, strata associates, owners and other stakeholders to achieve a better all round outcome.

Best Regards,


Letter sent to CEO by Owner
18 May 2007

Hi Debbie,

In light of yesterdays meeting, I wonder if you could confirm for me that these matters below have been attended to. This email was sent to you on the 11th August 2005 following my villa refurbishment, to which you replied - “Shall do my best” to date I have not received any further information. I have also called you since on several occasions, to which your reply was always “I will have to get back to you” – to which I am still waiting . . . I would appreciate a reply.

Furthermore, I would like to give notice for an “Owners Inspection” on Sunday the 27th of this month – late afternoon so as not to clash with any guests. It is my understanding that owners may request an inspection at any time as long as reasonable notice is given.  Please confirm a mutually convenient time by reply email.


Dear Rick

Shall do my best


Villa Administration Manager


-----Original Message-----
Sent: Thursday, August 11, 2005 12:18  PM
To: Villa Admin (Debbie Harry)
       Subject: Villa  xx

Hi Debbie,

As discussed the other day, the following is a short list of defects / problems with the recent refurbishment.

The TV in the lounge has suddenly shrunk – originally it was a Sharp 68cm large screen an now it has been replaced with the smaller 51cm version commonly used in the main bedrooms. Firstly why was it changed and when will it be replaced / restored to its original specification as purchased. Possibly it was out for repair when we were there.

The TV in the main bedroom has never worked properly, currently it has extremely poor reception – worse since the new TV was installed in the bedroom next door – so clearly there is a cable or signal strength problem.

All the bedrooms were supposed to have new bedding including  Bedspreads and Valace’s – which currently are as they were previously.

The kitchen was supposed to have a new “kitchen pack” which when I was there last was completely inadequate and old and worn out. If each refurbed villa has a new pack why aren’t they supplied when requested.

The dishwasher was broken (top rack completely off its rails) and in need of a recondition or replacement.

The doors to the laundry are also broken – they have no way of staying closed as the lock is either broken or jammed.

The ironing board is so old it looks like my grandmothers – somehow it must have got swapped along the way.

Bathrooms – according to the schedule these were meant to have been resealed, new soap holders and new AAA rated shower heads, to my knowledge non of this has been done – the tiles definitely need regrouting – no new shower head and no new soap holders.

Curtains – I’m not sure if they have been cleaned or anything lately but they are in bad need of pressing or steaming as they are all crushed.

If you could have a quick inspection for me and let me know your opinion first, I would really appreciate it,

Thanks  -  
Letter of Support from Owner
17 May 2007

Dear Michael

Thank you for your correspondence.
As owners of villa xx my husband and I would very much like to add our voice to those of others who have raised concerns over the management of Cypress Lakes.
Although we are unable to attend tonight's meeting due to previous commitments, we want to make it very clear that this does not mean we are disinterested in the outcome.  We are extremely interested.  Unfortunately, we realise now that we should have been spending a lot more energy on the issue of our investment in the Resort and its operation.  We will certainly be doing that in the future.
We have not been satisfied with this investment for some time and have written to the Resort about that.  In the end, we decided it would be better to cut our losses and sell the villa.  Our villa has now been on the market for many months with absolutely no interest from buyers.  We have had zero capital growth since purchasing the villa nine years ago - despite the massive property boom - and now it appears it is unsaleable.
We are happy for you to use this email, if necessary, to add weight to the claim that villa owners are not happy with the current situation.  Given the limited time that we have, I have copied this email to members of the Resort's management team for their information. 


Letter from Owner to management with reply

14 May 2007


To: ''
Cc: 'Nicholas Ng'
Subject: RE: elmowy villa 651


Dear Ernie,


Your knowledge of the history of the resort seems blurred and biased to say the least.

When Mark and I came to Cypress Lakes Resort for a weekend in 1998 and were shown the plans for what is now our stage of the resort by your sales and marketing representative Sue Grundy; those plans most definitely included the second exclusive member’s lounge and the direct pathway to the pool. It was from those exact plans that we purchased our villa.


 When we visited months later for our first site inspection with Sue we were also shown where the member’s lounge was to be built once all the villas were completed. On a later site inspection Sue pointed out the exact same member’s lounge site again, showing us where the trees had been felled in preparation for the coming building. Today, 8 years on, that site still remains cleared.


 Ernie, since you have been with the company a long time please explain to me why your response is so incorrect? This stage of Cypress Lakes Resort was marketed and sold off the plan as the most exclusive stage of the entire development including all future stages yet to be drawn up. You must be aware that the exclusivity included a security barrier across the bridge needing a swipe for entry. It was never marketed to us the buyers as completion of such, being directly related to a response in growth of the resort at a future time as you have now stated in your response.

The cleared site is living proof that your response is not a true fact of the current situation. You are correct in stating this is absolutely not what I was hoping for from yourself as my representative. The truth is an honorable thing. I therefore must dismiss it as an unacceptable answer.


 The exclusivity was a definite high selling point for us when we agreed on the price of the villa.  It was also of high consideration for the other 3 owners we recommended to buy in our stage shortly after us.


I will offer you another opportunity to answer my email truthfully. If you deny this opportunity then you leave us no choice but to seek professional advice.


-----Original Message-----
From: Ernie Hall []
Sent: Thursday, 10 May 2007 1:39 PM
Cc: Nicholas Ng



Nicholas has asked me to respond to your email regarding the pathway and the lounge because of my knowledge of the history.


It has always been the intention to build the pathway after the area between the creek and the lagoon pool had been developed as this is a future development area on land owned by Cypress Lakes Group. The actual development is dependant on the demands that develop within the resort. When the area was set aside for future development it was envisaged that there would be demand for more tennis courts and additional conference related facilities. Demand has not grown as strongly as anticipated. To date only the Event Centre has been developed. The design for the ultimate development of this area would incorporate the future pathway.


The idea behind the lounge was that there might be a demand as the resort developed for the equivalent of an executive floor in an hotel. With the advent of discount air fares the growth of the resort has been limited and the demand for this exclusive guest precinct has not developed.


Thursday's meeting results from the charge lead by Michael Marks which lead the Group to decide that a meeting should be held at the resort to correct apparent misunderstandings and to provide a forum for discussion of the concerns that had been raised.


While this email does not contain the answers you would have been hoping for I hope that it explains the current situation.





Sent: Friday, 4 May 2007 10:03 AM
To: 'Nicholas Ng'
Subject: elmowy villa 651

Dear Nicholas,

Just a follow up email as I have not heard back from you in over 3 weeks.

I am wondering if any progress has been made in following up on the due dates for completion of the pathway from our area to the pool and the members lounge?

Look forward to your reply.

I am aware there is a meeting Thursday week at Cypress and perhaps you were planning to address those issues there and if that is the case then I apologise for this email.



Email exchange with the CEO
8 May 2007

From: Michael Marks []
Sent: Tuesday, 8 May 2007 7:39 AM
To: 'Nicholas Ng'
Subject: Cypress Lakes - Conflict of Interest


One of the many matters that are a concern to us is the apparent conflict of interest CLK has in respect to the Resort Operator Agreement. I have made these observations to you in my Letter of April 1 2007, which you have not responded to.
You might like to consider the following observations.
  • Ernie is an employee/consultant - and receives payments from CLK
  • Ernie holds the position of chairman for each owner strata's
  • Ernie hold the position of chairman of the Community Association [CA]
  • Ernie prepares the budgets/ contract for CA at the same time he is paid by CLK
  • Ernie arranges for CLK to agree that this budget is acceptable to them
  • Ernie votes approves the budgets as Chairman of CA
  • Ernie is unable to provide a resource/people based back up to support the budgets numbers
  • Ernie is unable to provide any external market based comparisons for the contract as required
  • Ernie does not act on the numerous defaults which have been identified to the company in my letters
  • Ernie in his reply to my emails - does not see any default in the contract and believes the contract is been performed properly
  • Ernie as Chairman of the Owner Strata's has not disclosed his various roles to the Owners
  • CLK does not make any payments in respect to the property they own under this contract
  • CLK receive over a $1 million dollars from this contract
  • CLK have over 80% of the votes which approve these yearly contracts 
  • CLK did not create an independent operator company as required by the contact 
  • CLK are voting on a contact which CLK have a financial interest in.
None of this has not been disclosed to the villa owners and no one in your management team or the Strata Manager think there may be a conflict of interest or that this may be unfair to the Villa Owners.
I have still not received a reply from CLK which goes to explain away these concerns.
If no adequate reply is received then we will have to make further enquires about how we should respond to the unfair position we are placed in.
Regards Michael
++++++++++++++++ REPLY FROM NICHOLAS++++++++++++++++++++++++++++++
From: Nicholas Ng []
Sent: Tuesday, 8 May 2007 2:46 PM
To: 'Michael Marks'
Cc:; 'John Edwards'; 'George Bedwani'; 'Debbie Harry'
Subject: RE: Cypress Lakes - Conflict of Interest

I thought it was more appropriate that the relevant people respond to your letter dated 1 April rather than myself and they all did fairly promptly.
All your questions were answered. However, it would appear that those answers were not what you had hoped or expected and thus the continual allegations of wrongdoings on our part. We take offence that you continue to make false accusation such as "CLK not does not make any payments in respect to the property they own under this contract" when all levies have been paid up to date!
As for Ernie, you know very well the circumstances surrounding his position and we have repeatedly mentioned that we are more than happy and welcome owners to attend the AGMs, and if they wish, to be elected to the Community Association. John Edwards had explained to you that if Ernie does not approve the budget who else would since no one attends such meeting?
Michael, as you are fully aware, there is a meeting organised on the 17th for the owners and the management. We are prepared to listen and take in all constructive criticism and advice and endeavour to improve on areas that warrant the same. If you believe that the only way to achieve the result that you personally want is by attacking individual members of my management team or myself, so be it. Believe it or not, it is not in our interest for the resort to be poorly maintained. We are already taking steps to rectify some of the problems there but one must appreciate that we are in the country and things do not happen instantly. Again, you may not believe so, but some of those steps were taken before any comments were made by anyone. It is a large property and all we are asking is some time.
Nicholas Ng
+++++++++++++++++++MICHAEL RESPONSE TO NICHOLAS++++++++++++++++++++++++++++

From: Michael Marks []
Sent: Tuesday, 8 May 2007 4:23 PM
To: 'Nicholas Ng'
Cc: ''; 'John Edwards'; 'George Bedwani'; 'Debbie Harry'
Subject: RE: Cypress Lakes - Conflict of Interest

I think you have missed the point of my last email. Let me respond to the issues you have now raised.
  1. The resort is badly maintained look at the examples provided on the web site link. If you disagree with these examples please identify where I have got it wrong or have been misleading. 
  2. I have listed below my view about the conflict issues, you did not address this  - if I am incorrect please identify where I am in error. 
  3. If you believe that you are not in default in respect the the "schedule of the duties" - then please identify which duties have been performed and when over the last 12 months.  Obviously your level of acceptance of 'maintenance" is very different from all the owners
  4. Yes you have agreed to hold a meeting, but the agenda does not match the issues which the owners want to discuss and therefore you have not adequately provided notice to the owners about the issues and purpose of this meeting.  Your strata manager and manager of the resort selected a most inappropriate time and place for such meeting. 
  5. Yes, your people responded to my Letter April 1 but the Owners believe the answers were totally devoid of the facts and the owners having read this are in agreement that the points have been missed by YOUR PEOPLE.
  6. As regards, the Resort Operating Agreement, please identify the line item where it is shown that CLK makes a contribution under that agreement. 
  7. Don't believe for one moment that you are in the COUNTRY.  Cypress Lakes is one hour from Newcastle and 1.5 hours from Sydney.  If your management team is hiding behind the COUNTRY reason for poor performance then you are being misled.
  8. Many owners are unhappy - this if a fact, look at their emails to you - its not "me" against you and the management team.  No one in your team has wanted to meet in person - so I will continue to act as a concerned owner. 
I think its time for some external input and or mediation since we seem to be well apart on the issues of maintenance and conflicts. Maybe I should arrange for the Department of Fair Trading to look into this matter, since nothing in the last month shows you have understood the real issues here.
Regards Michael
Letter from Owner in Support
4 May 2007

Thanks for the correspondence. Very interesting!!

Might I reiterate my previous comment regarding the first AGM. My wife & I were domiciled in Singapore at the time. She flew down to Sydney at some expense specifically to attend the meeting. This is hardly representative of "little owner interest"! She was told Ernie Hall represented the owners and her attendance was not required, in fact the inference at the time was that owners input was also not required.

Furthermore, sometime later I wrote to Ernie with regard to having sails fitted over the car park to protect Members motor vehicles, some quite expensive, including our Jaguar, from the elements. We have seen this covering extensively used in South Africa over nearly every car park. I included brochures, from a company which supplies sails. I received no acknowledgment nor reply.

Regards, and good luck with the meeting.


Letter to Management about Maintenance Issues
2 May 2007

Subject: Cypress Maintenance Issues requiring Attention


I would like to report the following maintenance issues for your attention.

1) Villa 767 - attached is an example of a rusted support at ground level for the veranda of the villa . There is nothing left at the bottom of this wood support, it can be moved easily. I assume this has occurred because the garden at the base of this support has not been inspected to ensure that it does not cover the metal/wood footings. I can only assume this is not the only example you will find.

2) Villa 759. Attached is an example of - the hot water wooden box at the front of the villa is falling apart and guttering is broken at one end. This is obvious to anyone passing this villa. We have reported this to maintenance staff on site some weeks ago and notice this is still not fixed. This is not the only villa which has broken and rotten wood. In fact a large number can be found due to no painting of the timbers for up to 10 years.

3) Villa 768. This is our villa and we have inspected the roof area and found one of the roof supports to be broken. Could we please arrange a time for this to be fixed.


Letter from Owner - with response by Ernie and further response from Owner

2 May 2007



Dear Ernie,


I write in respect of the Management of Cypress Lakes Resort, and the Villa I am the owner of - xx.


I have some serious concerns – but would like to at least start with the positive – All my dealings with Debbie Harry the Private Villa owners administrator have been efficient and generally helpful and I would like this feedback passed on.


Since acquiring the property almost two years ago – I am shocked to see a continued fall in the capital value.  Especially when from my professional assessment as an experienced property investor I could see I was buying at a low point, and at a significant discount to the price paid by the prior owner.  Also with The Vintage selling new units at substantially higher prices, a fall in their sales success and achieved values was expected to have little to no impact because of the substantial cost premium they were seeking.  I now find our Villa value has dropped substantially in value to the point at which it is almost unsaleable at a reasonable price unless I become an “anxious and unwilling” seller.  I have been asking myself why this could be happening.  I believe a substantial portion of the blame rests with management and the blatant disregard of the rights and interests of ALL stakeholders.

The property market generally is arguably the major cause of the decline in value. There is an excess of supply over demand. Certain actions of Michael Marks would also be having an adverse impact on values. 






The interests of all villa owners and CL are generally aligned, and there is no "blatant disregard of the rights and interests of ALL stakeholders". I SEE SOME NICE MOTHERHOOD COMMENTS ON OUR ALIGNMENT BUT CANNOT SEE IT IN PRACTICE – HOPEFULLY THAT CAN CHANGE


Cypress Lakes needs to be maintained in good condition to maintain value and adequate sinking funds need to be reserved.  Despite what I appreciate would be substantial landscaping costs for the Villa areas – the levies seem extraordinarily high and yet there seems to be no appropriate direction of funds, or at this stage no ability to explain it properly.  I now hear that basic enquiries made of the management responsible for these budgets and costs have failed to provide any adequate answers.

Please refer relevant comments in the attached email. See also my response to your question regarding your contribution of levies. 

There is a lot of inaccurate and misleading information being circulated, and some of it is offensive.  I WILL REVERT AND CAN HOPEFULLY MAKE SENSE OF IT – BUT I SUSPECT THE INFO WILL BE AT HIGH LEVEL AND AS SUCH HARD TO PROPERLY EVALUATE AND VERIFY.


With respect to my Villa and its immediate surrounds:


I note the path drains have been permanently blocked since my ownership and hence there is regular flooding of the area.

I assume that this is in front of your villa. YES This is a maintenance responsibility of the resort. I will refer this to George Bedwani (GB).


Latches in the exterior fly screens are broken and in need of repair.  It seems managements answer in the past is to simply remove the screens altogether.

That would be unacceptable. I will refer this to George Bedwani (GB).



Gutters seem to overflow and are probably clogged with leaves – perhaps never cleared.

This is a maintenance responsibility of the resort. The resort carries out regular cleaning. See relevant comments in the attached email.


The exterior is in desperate need of a repaint.

Painting of the timberwork to all of the villas in your strata plan is scheduled to commence this month and be completed by this October.


Path lights are regularly broken.

This is a maintenance responsibility of the resort. I will refer this to George Bedwani (GB).


Windows are dirty.


This is a maintenance responsibility of the resort. The resort carries out regular cleaning. See attached email.


There is a general look and feel of disregard for the proper maintenance of Cypress Lakes and I feel that affects myself and all the other owners.

There is room for improvement and it is being addressed by George Bedwani.


Why would management allow this to happen I struggle to understand.  I feel it can only be justified by assuming you and management are taking a short sighted approach – namely – the lower the capital values the higher the perceived rental returns.  Cypress lakes management who are responsible for paying the lease back owners a rent return have the opposite interests at stake to those of the private owners, and there is a significant conflict of interest in having you Ernie Hall, managing both sides of the equation.  If capital values rose, management would be paying a lower rental yield which may make it harder for them to sell new releases of villa’s, especially when in essence they are only offering the owners of lease back properties an income yield and some pretty nominal fringe benefits, like half price nights in rooms that could be sourced at almost similar rates through the hotels own last minute internet specials.  

See relevant comments in the attached email.

I have no operational responsiblity at the resort and it is arguably in the interests of villa owners that the budgets which are required to be based on market rates  are independently prepared.

It is in everyones interests for the resort to be successful and for capital values to be high

It is not relevant to the strata plan whether villas are leased or otherwise. Maintenance is required to be carried out on the same basis to all villas. I AGREE


This represents an obvious misalignment and conflict of interest.  CL Management not interested nor aligned to growth in Capital Value as they have no long term interest in this component – but rather returns from its hotel operations.  I also suspect the lease back pool of properties get a higher proportion of the pooled levies devoted to them to make the hotel guest feel good.  The general upkeep of the hotel facilities is improving - I want answers and I want to be sure that our levies are in no way cross subsidising these expenses.




The viability of the resort clearly depends on the financial success of the resort ' s operations and this primarily depends on the quality of its operations, the villas and the facilities.


I am very concerned by what I have seen and heard to date with respect to the responses from CL management and am worried that CL Management is demonstrating unconscionable conduct, and is in breech of its fiduciary duty to the private owners.  I also feel CL may be abusing the majority voting rights it holds through the leaseback pool of Villas it controls.


Please refer relevant comments in the attached email.


Could you please advise in detail how my contribution of levies is appropriately and fairly apportioned and expended.

Please refer the attached copy of the budget I prepared and submitted to Strata Associates for consideration and adoption at the last AGM of your strata plan.The notice of meeting was sent to all villa owners in the strata plan. 


Unfortunately, I am living overseas at present, and am unable to make the meeting scheduled for the 17th May.  This in no way means I am disinterested in the outcome.  I am very interested and concerned.


If Peter Smith, who is now looking after my Villa on a day a to day basis can attend he is allowed to represent my views.  I fully support the enquires being made by the other private owners and hope that sensible answers and a more appropriate structure for moving forward can be agreed, so that further action is avoided.

Certainly Peter Smith may attend. He should RSVP.

The meeting on 17 May is not a general meeting. It has been arranged to provide an opportunity for villa owners to increase their understanding of the structures that are in place and to discuss their concerns.

The structure of strata plans and community association is inflexible It is part of your protection. 

Hopefully there will be increased owner involvement in the future. George Bedwani as GM of the resort will continue to be responsible for the operation of the resort generally including the maintenance of community association and strata plan property, and the provision of services through Cypress Resort Management.

A summary of the discussion at the meeting will be prepared and distributed to all villa owners.



Letter sent to CEO by Owner


I write in respect of the Management of Cypress Lakes Resort, and the Villa I am the owner of - xxx.


I have some serious concerns – but would like to at least start with the positive – All my dealings with Debbie Harry the Private Villa owners administrator have been efficient and generally helpful and I would like this feedback passed on.


Since acquiring the property almost two years ago – I am shocked to see a continued fall in the capital value.  Especially when from my professional assessment as an experienced property investor I could see I was buying at a low point, and at a significant discount to the price paid by the prior owner.  Also with The Vintage selling new units at substantially higher prices, a fall in their sales success and achieved values was expected to have little to no impact because of the substantial cost premium they were seeking.  I now find our Villa value has dropped substantially in value to the point at which it is almost unsaleable at a reasonable price unless I become an “anxious and unwilling” seller.  I have been asking myself why this could be happening.  I believe a substantial portion of the blame rests with management and the blatant disregard of the rights and interests of ALL stakeholders.


Cypress Lakes needs to be maintained in good condition to maintain value and adequate sinking funds need to be reserved.  Despite what I appreciate would be substantial landscaping costs for the Villa areas – the levies seem extraordinarily high and yet there seems to be no appropriate direction of funds, or at this stage no ability to explain it properly.  I now hear that basic enquiries made of the management responsible for these budgets and costs have failed to provide any adequate answers.


With respect to my Villa and its immediate surrounds:


I note the path drains have been permanently blocked since my ownership and hence there is regular flooding of the area.


Latches in the exterior fly screens are broken and in need of repair.  It seems managements answer in the past is to simply remove the screens altogether.


Gutters seem to overflow and are probably clogged with leaves – perhaps never cleared.


The exterior is in desperate need of a repaint.


Path lights are regularly broken.


Windows are dirty.


There is a general look and feel of disregard for the proper maintenance of Cypress Lakes and I feel that affects myself and all the other owners.


Why would management allow this to happen I struggle to understand.  I feel it can only be justified by assuming you and management are taking a short sighted approach – namely – the lower the capital values the higher the perceived rental returns.  Cypress lakes management who are responsible for paying the lease back owners a rent return have the opposite interests at stake to those of the private owners, and there is a significant conflict of interest in having you Ernie Hall, managing both sides of the equation.  If capital values rose, management would be paying a lower rental yield which may make it harder for them to sell new releases of villa’s, especially when in essence they are only offering the owners of lease back properties an income yield and some pretty nominal fringe benefits, like half price nights in rooms that could be sourced at almost similar rates through the hotels own last minute internet specials.  


This represents an obvious misalignment and conflict of interest.  CL Management not interested nor aligned to growth in Capital Value as they have no long term interest in this component – but rather returns from its hotel operations.  I also suspect the lease back pool of properties get a higher proportion of the pooled levies devoted to them to make the hotel guest feel good.  The general upkeep of the hotel facilities is improving - I want answers and I want to be sure that our levies are in no way cross subsidising these expenses.


I am very concerned by what I have seen and heard to date with respect to the responses from CL management and am worried that CL Management is demonstrating unconscionable conduct, and is in breech of its fiduciary duty to the private owners.  I also feel CL may be abusing the majority voting rights it holds through the leaseback pool of Villas it controls.


Could you please advise in detail how my contribution of levies is appropriately and fairly apportioned and expended.


Unfortunately, I am living overseas at present, and am unable to make the meeting scheduled for the 17th May.  This in no way means I am disinterested in the outcome.  I am very interested and concerned.


I fully support the enquires being made by the other private owners and hope that sensible answers and a more appropriate structure for moving forward can be agreed, so that further action is avoided.


Kind Regards


Letter sent to CEO by Owner
Dear Sirs/Madam
By way of introduction my wife and I are the interested owners of Villa xxx, Cypress Lakes Resort.
We would like to make some comments on the running and maintenance of the resort and the effectiveness (or ineffectiveness) of the current protocols in place that address the concerns of the villa owners.
We have been advised by staff at the resort that all issues are to be raised with the villa owners' representative located on site.  This approach seems reasonable and would be if it were effective.
Issues have been raised in relation to:
  • The gym - substandard and dangerous equipment and lack of maintenance.  (Subsequently some action has been taken.)
  • The maintenance of the external areas of villa buildings and fittings.
  • The maintenance of the gardens and grounds particularly in relation to areas surrounding the villas.  We note that the area surrounding the resort building, club house and conference facilities is outstanding and should be used as a benchmark for the remainder of the grounds.
  • Other minor issues such as the recent poor television reception.
Whilst we have been dealt with extremely well personally, not much has been achieved in relation to the issues raised.
It appears from experience that in order to achieve any progress or satisfaction for our concerns, it is necessary to escalate the complaints/issues to a higher level via written correspondence.
Following from our email complaints to George and David we note that finally there is some new gym equipment, although the weights station still requires maintenance.
We were interested and active participants at the recently called informal owners meeting to discuss some concerns.  At this meeting other participants noted some similar success achieved through written correspondence.
We were also informed that there is a view historically of a lack of interest from villa owners.  Strata managers and resort operators feel owners are apathetic in their interests in relation to grounds, maintenance and other management issues.
This has resulted in the resort management and strata management view that all is well and it/they can continue along the same path as previously trodden.
We find the perception of villa owners' lack of interest or apathy and the management (resort and strata) view that all is well to be extremely concerning.
We can assure you that the general consensus at the meeting was not one of apathy.
The prevalent feeling was if we work together as a productive unit we will be able to improve the whole resort for the benefit of the resort owners and operators.  This can only be achieved by positive contribution from all parties.
Some comments:
  • Some villas throughout the resort have been repainted externally - many have not.  There must be some programme which addresses this work.  It needs to be reviewed and accelerated as if the villas are continually neglected the costs for villa maintenance will only increase at a greater rate resulting in increased levies.
  • The garden and ground maintenance around the main resort buildings is excellent.  There appears to be little or no ongoing maintenance conducted around the villa areas.  It must be noted that this has increased recently but more needs to be done.
  • Windows are supposed to have been cleaned.  The windows of Villa xx certainly have not.  Walking around the resort it is difficult to see which windows have been cleaned.
  • The resort operator appears intent on charging villa owners and guests a fee for the use of facilities.  We find this exceedingly distasteful and a money grabbing exercise which will only result in much discontent and angst for all.  We also believe that as levy payers we are already paying for the upkeep of facilities and cannot be made to pay twice.
  • It would be useful if villa owners were made aware of maintenance programmes and general maintenance for the resort and grounds.
We would appreciate a response to this correspondence and assure you that we will be proactive in our efforts to increase the appeal of the resort and hopefully maintain its premier position in Australia.


Letter from Owner to Management about Gym Equipment
-----Original Message-----
From: Christine Marks []
Sent: Wednesday, 7 February 2007 7:36 PM
To: Maintenance Manager
Cc: David Barranger; George Bedwani
Subject: FW: Gym equipment at Cypress Lakes Resort

This afternoon I spoke to you about the broken gym equipment.  Various members have reported the broken equipment to various staffers but it seems that nothing is being done to rectify any of the equipment.  I for one reported it to front desk some 3 weeks ago and then last week I reported it to one of the staff who sit in the rooms - I think 503.  Another week has elapsed and still nothing has occurred.  I believe there would be a liability situation if something is not done immediately.
Cypress Lakes Resort claims to be a 5 star resort and one of the facilities on offer is a gym.  How can you offer a facility if it is not maintained to the level that it is able to be safely used.
I believe from my conversation with you that you had been alerted to the treadmill being out of action some 3-4 weeks ago but you admitted that it had slipped your mind now for a couple of weeks to focus on its repair.  You said you made inquiries through the other resort but they were not able to help you.  I suggest you make inquiries in the industry as the brand is still available.
I would like to reiterate the items which need to be repaired/replaced
  • One of the bikes does not register any of the programs and has an ill-fitting bolt in the seat adjuster
  • The other both has an ill-fitting bolt in the seat adjuster.  I am sure neither of these fixes would pass for safety measures on the machine
  • The treadmill
  • The rowing machine
  • The lateral pull downs is broken at the 20 kilo weight.  Also I believe that the whole weights machine needs to be serviced as the machine is not safe.
I suggested that if items could not be repaired then they should be replaced.  You advised there simply was not money to replace these items.  Owners pay huge strata levies here and don't seem to be able to achieve much in the way of action for maintenance.  I am quite sure that if Cypress Lakes Management fails in its duty to maintain equipment then it will have more problems on its hands than just a few disgruntled owners trying to keep fit.


Email from Owner to Maintenance Manager re Gym Equipment
To: 'Maintenance Manager';
Cc: 'David Barranger'; 'George Bedwani'
Subject: RE: Gym equipment at Cypress Lakes Resort



Many thanks for the update.  I was only at the gym this morning and noted that the status had not changed and was wondering what was the next step.
What equipment are you contemplating replacing?
As a daily user I miss the treadmill and also the rowing machine actually recording timing and distance.
On the side of OH&S is there signage anywhere that says to guests and users of the gym that they do so at their own risk as we don't have anyone supervising use.  It seems the only signage is that children under a certain age need to be supervised by an adult.  I am always amused by this as mostly the equipment is used by adults who don't care about equipment usage, they leave weights lying around the room and move equipment around the room also and then do not replace where they found it.  It seems that major signage would be an idea for OH&S.
Do you have any idea how long the powers that be in Cypress will take to rectify one of its facilities?
Also, just wondering, if I have not mentioned it before, when was the filter changed in the water system in the gym?  It seems to have a very different taste to the water in my villa (I have a filter system as the taste of the water at Cypress is not conducive to drinking and I like from a health point of view to drink lots of purified/filtered water) and I am concerned that if the filters are not changed often enough for the amount of water passing through then we will have another problem on our hands.  Perhaps you could look into this.
Thank you once again for getting back to me - I await with keen interest for the upgrade.
Regards, Christine


Letter to Management re Gym Equipment

George and Les,

It seems that this problem of the GYM equipment will just not go away.  This saga has now been going on for months and here we are once again down to our holiday place supposedly with all the bells and whistles in order but alas still the gym is still not operational.  What does one have to do to get some action around here?    I have been informed that you now have several quotes for repairs/replacement.  What is happening?  When will this resort be restored to the advertised facilities?
George, just to give you an example of my experience in the gym yesterday afternoon.  I entered the gym at around 6pm and alas to my amazement nothing had changed.  The broken equipment was still broken.  There was already one guest there from the Citibank conference using the weights station.  She was joined by another 5 or 6 friends who all tried to use equipment but couldn't because it was all broken.  They were all very disappointed as they said "they surely don't call this a gym do they"  "I was looking forward to using a gym on my weekend break" "If this is all they can offer why would we bother coming back" - I sat quietly on the only working bike and thought Hmmmmm.  I should let you know about this.  You know how bad karma spreads especially amongst young people who are looking for something special for a weekend away.  In the hospitality industry one bad word means 30 people hear about it - now that cannot be good for business.  I wonder how many other resort features they were disappointed with.  I only stayed for 35 minutes so goodness only knows how many other resort guests were disappointed this weekend.
I would really appreciate the gym being restored to usability without further delay.


Letter to George re Gym Equipment  - showing his replies
From: Michael Marks []
Sent: Sunday, 8 April 2007 3:30 PM
To: Nicholas Ng; George Bedwani
Cc:; 'John Edwards'
Subject: FW: George - Response re Operator Agreement

George replies are in red


Hi George
Let me make the following points.
1) Regarding the Gym - yes new gear arrived about a week ago. This is after 4 months of complaints about faulty equipment.
  • Only one bike was purchased, there were previously two bikes which is what we expected.  
  • Agreed only one bike was purchased, the other bike was replaced with an Elliptical Cycle at your recommendation.
  • The new bike is already faulty and has been so for over a week and no-one has fixed it yet. 
  • Please be aware it was a long weekend, the bike was only delivered on Friday 30th March, the supplier has been 
  • notified and expected to come this week. 
  • No input was requested from Owners or Members about the fit out or the equipment before purchase 
  • Please note this is not community property.  As you will no doubt agree we have taken on board owners comments ie
  • yours and replaced one piece of equipment accordingly.  If we consulted with a number of others, we would not get any
  • decision or agreement due to varying and different opinions and there is no obligation to do so.
  • Bikes and Walking machines are the most commonly used equipment in Resort Gyms - now there is only one of each. 
  • Granted, but note there is also not room for any additional large machines, status quo has been preserved ie one of
  • each machine as opposed to two bicycles.
  • There are no instructions on the walls on how to use the electronics of any of the new equipment.  
  • With all due respect, these instructions are shown on the LED upon starting the machine and may be set to your own specific
  • needs.
  • No attempt has been made to make the gym a fresh place to work out - remove or clean curtains, or paint the room. 
  • Noted, this work has been placed on a priority list to be attended to.
  • Two new equipment pieces requires power connection - this has resulted in unsafe power leads on the floor  
  • The cords shall be taped down to secure them, bear in mind the machines will not be able to be moved to satisfy your own and others
  • preferences ie outside view or television screen.
  • Nor can you see the TV from the bike position. 
  • See above
2) Regarding Flooding - The paths around 770 have been fixed - thanks - but they have been under water whenever it rained, we first reported this to your front office some 4 months ago. I am not sure about your reference to outside contractors doing the work, and this causing the delays - it seemed to us it was all done by your own Landscape staff. 
I take offence to your comment that it appears that the work was all done by the Landscape staff.  It should be noted that the machinery/equipment
used to carry out the work was contracted from an outside source, which we had to wait our turn to use.  Please refer to my previous reply, at no time
did I refer to outside contractors actually performing the work.  Please again refer to my previous email reply.
3) Regarding Owners Feedback - you say no one ever requested this - we have offered to meet with you and with David Barringer - and followed this up in an email dated 4 March (one example there are others) - no meeting has ever been arranged. The fact that this and subsequent offers were not taken up - is why I wrote this letter to the CEO.  
Refer to my previous email, again, no approach was ever made to me personally to set a time and a place to meet.
4) Operator Duties - you did not make any comment about these breaches in the Resort Operator Agreement or conflict of interest issues  - this was the key point of the letter. I understand that Cypress Lakes prepared this agreement so they must understand their obligations. 
In my humble opinion, I do not think there has been a conflict of interest or breach of agreement and furthermore it is not my place to comment.
George Bedwani


Letter to George as reply
I do not really want to continue this line for line analysis but since you have responded let me say the following:
Gym Equipment
We have never had a conversation with you or your front desk manager Chris Pascoe and been given the opportunity of suggesting what equipment should be purchased. We have assumed you would replace with the same equipment. Please tell me when we advised you otherwise. We in fact commented to Chris after he told us the order had been placed that we felt he should have 2 bikes and not a orbital machine. This was a resort gym. He said that decision was his.
Following is our email to you - please note we asked what equipment you were contemplating. We never received an answer in response to this 19 February email.
What you should be checking on is why did Chris accept delivery of broken equipment - because Christine tried to use it day one, it was broken then that was over a week ago. 
Only yesterday we talked to Chris Pascoe - he agreed that the computer on the bike does not work and is not user friendly, it should have been a simple bike and not electric. So why did he buy it?   He did state the he only uses the bike in the gym, so one should be forgiven for thinking that he would certainly know what was best to purchase.
Owner Input
It must be up to you to respond to requests by Owners to meet and discuss matters - as they say "why didn't you call" . I cannot imagine you would attend a meeting we set for you, and we still haven't had such a meeting.  We will continue to write emails until we have a meeting.  It is not the way I like to progress a relationship, but you are giving me no alternative.
Regards Michael


Letter from Edwards (Strata Manager) to Owner
Nicholas Ng in his email of 2nd April requested I clarify with you on the proper procedure for you to highlight your concern regarding services provided under the Cypress Lakes Resort Operator Agreement.
The structure of the Cypress lakes Community Scheme is seven Strata Schemes under the banner of a Community Association. There are other development lots and lots owned by Cypress Lakes which I don't propose to confuse you with . Each owner is a member of a Strata Scheme. Each Strata Scheme is a member of the Community Association. Each year at it's Annual General Meeting each Strata Scheme elects:
a) A member to vote on it's behalf at a general meeting of the Community Association;
b) A member to be nominated to the executive committee of the Community Association.
In the case of Strata Plan 55400, of which you are a member, Ernie Hall has been elected to both positions each year as well as the only Executive Committee member. There has been only one year where an owner has attended the AGM , 2006, and that owner did not wish to be elected to either position or be elected to the executive committee.
Your proper course of action is to forward your concerns to your executive committee, who's Community Association executive committee representative would need to take up these matters on your behalf.
I am aware of your concerns regarding the current structure ,but unfortunately , until other owners attend the AGM and put themselves forward to be elected this is the only proper course of action available.
I am aware that Ernie Hall has advised you that he is proposing to organise a meeting with interested owners and I have agreed to be part of such meeting. I would hope this would go a long way to address concerns owners might have.
I suppose I should point out that the letting arrangements between owners and Cypress Lakes is not within the power of the Strata Schemes or the Community Association to deal with.
Please don't hesitate to contact me if you have any questions.


Letter to Strata Manager from Owner and his reply

From: Michael Marks []
Sent: Friday, 6 April 2007 6:37 PM
To: John Edwards
Subject: RE: Cypress Lakes


Strata Manager  replies are in red



My thoughts are as follows:


1) Most the Owners have their proxy votes with CLK - as required under their lease arrangements - they have no say and because of that they have done little about it to now. 

This does not prevent any owner from attending AGMs and having their say. As I have mentioned, in some cases owners have attended  and have had their say and have been invited to join the committee. I would have to assume all owners were aware of this situation before they purchased.


2) Since the other 67% of votes are held by CLK related strata's - all voting control is held by CLK regardless. 

 I assume all owners were aware of this before they purchased. 


3) The Agreement requires a schedule of duties to be done - they are not optionally as you appear to think - it is nothing like a lift maintenance agreement (as you describe it) which works when something breaks down. 

I have never said that the schedule of services are optional . You don't seem to understand what I am trying to explain. The Agreement is comprehensive ( a schedule of service for a prescribed fee ). The analagy to lift maintenance contracts is merely to highlight the comprehensive nature of the agreement. In case you are not aware 99% of lift maintenance contracts are comprehensive.


4) CLK have misjudged the feeling of owners regarding their concerns as to the roles of Ernie and the Strata Manager - this will become evident when you get the Owners together. 

I can't speak for Ernie but f the Strata Manager's quite clearly detailed in the Agency AgreementNo owner ,previously ,has ever expressed ,to us,any concerns about our role.


5) Both you and Ernie knew I wanted to get on to the Strata Committee and I advised both of you in writing of my interest see emails 13 November 2006. Interestingly the date of the Strata AGM was moved forward by 2 months from that of the previous year (and I was away when the notice went out) - neither of you checked to see if I was coming or was still interested.  

The fact is that the legislation requires that an owner nominate another owner for election to the EC at the meeting  or the owner nominates themself at the meeting. This did not occur. The previous years meeting was held late and the last meeting was scheduled to be be held in the correct time frame. With all the meetings I am involved in it is just not possible to follow up individual owners to check if they are interested in being on a committee.


6) For reasons best known to you and Ernie it was decided at the AGM that the Strata Executive was to be limited to one person (by Ernie voting his proxies to do so)  - therefore ensuring that no one could be added for another 12 months - this was unusual and unnecessary. As you know I have tried to get on to the Executive ever since and have been advised that this is not possible till the next AGM at the end of 2007. 

This election process is not only not unusual but required by the legislation. You cannot set the number of committee members to exceed those nominated and intentionally create vacant positions.


7) You are an experienced strata manager - please don't tell me that you do not know what a conflict of interest is about - you have not ensured that the Owners were informed and knew that some 80% of the Strata fees raised in the Owner strata's went to CLK for payments. There is no explanation in the accounts as to what this is for, no supporting schedule and no information which links strata accounts to the Community association. This is not transparent proper reporting in circumstances of the budget been prepared and approved by a CLK employee. 

Here again I have never stated I do not know what a conflict of interest is about. These are your words .I must assume that all owners had a  strata and community inspection carried out prior to purchase (a practise in the vast majority of cases). They would have had access to all previous years accounts  . This is the appropriate method (and again set out in legislation).Strata accounts are linked to the CA by showing the contribution paid by the strata plan to the CA. There has been nothing startling about the budgeting. It has always had a direct relationship to the previous years expenditure. On the occasions when owners have attended AGMs they have been satisfied with the budgets. To the best of my recollection we have not received any complaints about budgeting or how it is approved. With regard to the accounts , the expenditure is set out and clearly shows how much is paid to CLK. These accounts are audited by an independent auditor and if they were inadequate I have no doubt the auditor would qualify them.


8) Have you now got a view about the Agreement and the issues raised in my email regarding a conflict which I have identified, I have still no idea what you think about the issues raised, I assume from your email that is not a matter for you to be concerned about. 

I do not believe it is my position to express an opinion on any alleged conflict of interest as this would constitute an opinion on a matter of law. This is a matter you would need to seek your own legal advice about. 


Regards Michael



John Edwards

Chairman/Corporate Licensee

Strata Associates Pty Ltd


Letter from John Edwards (Strata Manager) to Owner
From: John Edwards []
Sent: Friday, 6 April 2007 1:27 PM
To: Michael Marks
Subject: Cypress Lakes

I noted with some concern you comments about me in a recent email which were clearly misleading.
You visited our office and carried out a search on the books and records. No doubt you viewed our management agreement. The agreed services are clearly set out in the agreement and you would have noted, did not include policing CLK, how they perform their duties (which would not be possible as we do not visit the resort to monitor their work and are not required to), or take steps to rectify a perceived conflict of interest.


We have been engaged to manage the books and records of each owners corporation and the CA and our fees reflect the extent of that engagement.
You seem to constantly ignore the fact ,that in the past, there has been negligible interest from owners. Attendance at meetings , with the exception of maybe four (covering 7 strata schemes and in excess of 12 years) has been nil. My recollection is that , in that time, only one owner in one strata scheme has put themself forward for election to the CA (and that was last year) , one owner agreed to be elected to an EC and has not turned up to another meeting since.
Your statement about The Agreement is misleading. I attempted to explain that the agreement was like a comprehensive maintenance agreement (using a lift maintenance agreement as an analogy) where comprehensive services are provided for a fee. This is a simplified explanation which I considered sufficient in the limited time we had together.


John Edwards



Reply to Questions from Owner by Edwards (Strata Manager)
The following is our response to your letter. Naturally I cannot speak for Cypress Lakes. I have provided answers in the same order as in your letter.
  • Cypress  Resort  Management, the Resort Operator, has a comprehensive contract with the Community Association to provide certain services to the Community Association and the Strata Schemes for a fixed annual fee. Cypress Lakes submit invoices for this fee which are paid and hence the one line entry in the accounts. In future meeting papers Cypress Lakes detailed budget will be included.
  • The reporting by the Strata Manager is the :

                1) Annual Financial Statements and budget. This is forwarded to all owners prior to the holding of the Annual General Meeting as required in the legislation.

                2) The minutes of the AGM which are forwarded to all owners after the AGM.

                3) Any other information to be forwarded to owners on instruction of the committee.

  • The sinking fund analysis  exists but has not been included in  previous  AGM papers. The sinking fund budget has not been included in all previous AGM papers.  Both will be included in future AGM papers.
  • As is standard practise in all strata schemes, the budget is prepared by the executive committee and the strata manager and tabled at the AGM for approval by owners. This practise is in accordance with the legislation


John Edwards


Letter sent to the CEO from Owner
Dear Mr Ng
Attached is a letter containing my comments regarding correspondence. 
I also note you advise that you have been contacted by various owners  wanting to let you know that certain views taken are not shared by all.  That should always be the case, it's healthy.  People have their own agenda and that is their prerogative.  It will be an interesting meeting if all owners are together in May, actually sharing the good with the bad.  We ALL need to see ALL sides of the truthful story, however, all sides of that story will hopefully achieve a better Resort with great prospects for the future.  Competition in the Valley with new Resorts is increasing and the last any of us want is for Cypress to fall down the list of preferred visits.
It seems a fine line between being "apathetic owners" and "participating owners" - actually we are just "concerned owners".

I have read and would like to make comments concerning the letter Michael Marks (MM) wrote to you  dated 1 April 2007 (including copies to John Edwards (JE) and George Bedwani (GB)), together with the replies from Ernie Hall (EH) and George Bedwani.


  • I believe that if you were to actually speak with Owners, both those who use their Villas privately and those who lease their Villas back to the resort, you would find many who did not fit into EH’s description of, “…..high level of satisfaction among Owners with the way that Cypress Lakes is run”.  EH’s reply takes in many aspects, however, MM was specifically referring to the Agreement between the Operator and the Owners, and this is the matter which concerns Owners - our Strata monies and the use of them.
  • Another major point is our garden/landscape.  EH wrote  “..particularly considering the prolonged drought”.  We all understand the drought, however, does the drought prevent the removal of dead  trees, branches and the build up of leaves and rubbish around the Villas?  There is a great deal of tidying up and repair work which could have been undertaken, actually one could have taken advantage of the dry weather.  Does anyone ever walk around the Villas and look at the trees which are too close to the rooftops or, due to closeness of planting, have grown up under the eaves and need to be cut down?
  • EH and his roles – I voiced my opinion on these roles last year at our AGM and EH looked at me and smiled when I asked him “…...If you represent all these bodies how do you ever argue with yourself?”
  • The comment “The only Owner who has expressed an interest to represent his OC at AGM’s of the CA was appointed to do so.”  I assume this refers to Bill Tilley.  When Bill asked what he needed to do he was told “Nothing.”  We were faced with so many new, unseen figures and details at that meeting that it was difficult to take it all in and there was certainly no encouragement from EH for any nominations.  I believe that Bill has not heard anything since that meeting, in fact, he tells me that he hasn’t even received his Minutes.  These Minutes by the way included the fact that EH held proxies for Villas – some of which I had brought to both his and JE’s attention at the meeting he could not hold  because those Villas were not financial – just a minor error I guess.  What are Minutes of Meetings for other than a true record anyway.
  • I think I would be right to say that without Individual Owners, whether they are leaseback or private, there would be no Cypress Lakes Resort and yet there is an Owners Committee and a Community Association and the individuals are never spoken with, let alone given the opportunity to have some input. 
  • EH writes, “….no Owners have wanted to be. A successful Cypress Lakes is in the interests of both the Owners and CLK.”  Well the second sentence is certainly correct.  Again, if you spoke with owners you would perhaps understand why some of them have not been to AGM’s. They are not encouraged to attend and certainly not encouraged to join any body.  From my experience, attending an AGM would make no difference with this voice.  We just have to ‘pay our levies, have no input and don’t expect to receive what we pay for’.  If owners do attend we are not exactly welcomed and the other problem is the receipt of late notices (not legally late, just inconveniently late), especially when the date is brought forward 2 months earlier than in the previous Minutes of Meeting (that is if you were lucky enough to receive those Minutes.)I queried JE as to why I had not received my notification the year before and his reply on 30 June 2006 was, “All owners were forwarded a notice and agenda for this meeting.”   The sending out of mail is not exactly reliable and there are many Owner’s who do not receive notices, either email or post.  We actually speak with one another and quite often wonder why one owner has been notified of something and the other owner has not.  
  • Perhaps there has been apathy in the past but, as more Villas are used privately, voting rights are given back and the concern of future maintenance of Villas is realised, I am sure you will find less apathy.   Mind you I am not totally convinced that there has been no apathy on the part of our representatives in Sinking fund monies, future maintenance and general attitude towards Owners.  In January 2006 when I applied to install a skylight in a very dark, windowless bathroom, there was apathy.  It seems that Owners are not meant to raise any issue.  I was told at the time that the matter would be referred to the Committee – little did I realise then that that meant the decision was made by one person – no discussion because who would the request be discussed with.
  • If all the owners attended the AGM, is this the only time that EH would seek assistance for us to “work constructively” with him – once a year?  What’s wrong with a regular meeting of owners so that EH could understand some of the concerns.  Surely these concerns would be for the betterment of Cypress Lakes Resort.  Most Owners just want what they pay for – is that wrong?
  • Sorry to be repetitive but, when you prepare a document and then OK it “how can you argue with yourself?”  Our representative in the Community Title should be making sure that what we are being charged for is a legitimate charge – the ‘job’ has been undertaken in a satisfactory manner.  No business pays an account without knowing that the job has been completed satisfactorily and as per the agreement.  We asked EH at our AGM if the accounts were ever checked and the reply was “No”. Now that we have had the opportunity to look closer at paperwork we realise that he not only OK’s the payment but he prepares the account – why would he need to ‘check’ it? 
  • Window cleaning and gardening - memories of the AGM.  I remember when EH left the table to photocopy a list for us when we asked to see the break up of what we paid from our levies.  The way I felt when I first saw the figures for our Strata – my mouth just dropped open.  In the two years that I have been an owner I have never seen a person around my Villa looking at, let alone working in, the ‘garden’. Although I am not here fulltime there has never been any evidence that anyone has done any work.  The only work was when I filled 6 orange garden bags with dead leaves, weeds and branches and on another occasion I planted some natives.  I was told on both occasions that I should not have done either of those things, I had no right to undertake that work  - I was obviously a nuisance when I requested that someone collect the bags I had left. 
  • We are not asking for ‘manicured gardens’, just that the native garden is kept under control, dead trees and branches are removed and perhaps the odd new native planted. The other day a young boy told me he saw a snake just at the side of my stairs.  There is so much undergrowth that he may have been right.  If so, it really was just beside the stairs which are used daily.  There is no need for that undergrowth to be there.
  • GB wrote in reference to window cleaning, “…. private villas who’s owners did not authorise access to their villas”.  Funny that – I receive my levy notices yet that request must have gone astray. 
  • Recently some of us received an email about having the window and door locks checked.  They were checked but obviously the work to repair them was too great because we have heard nothing since.  Guess that was abandoned once the actual cost for all Villas (partly because of neglect over the years) was realised and the money is just not there.
  • Prior to our AGM I asked JE about future maintenance work and, in his letter of 6 December 2006, he wrote, “We are not in possession of details of any works planned for the Villas over the next twelve months and suggest you raise this issue at the Annual General Meeting” - I did and received the same reply.  As a Strata Manager should he not be aware of what maintenance is anticipated and how much money this will cost?  Is this not part of the ‘sinking fund projections’ ?
  • Another point raised at our AGM with EH was why we did not have recycling bins for the Villas.  A large percentage of the rubbish consists of bottles, newspapers and cardboard boxes.  These get placed in the bins and then rubbish bags are left on the ground.  Animals visit during the night, hole the bags and rubbish is all over the ground.  If there were recycling bins this problem would be alleviated to some degree.  EH replied with words to the following effect, “Well I don’t see why we couldn’t have it, the Resort does.  I will look into it.”  That is four months ago.  Is there any news about that? Another problem is that half of the bins do not have lids on them and fill up with water when it rains.  Believe you me, some days the look of the rubbish bin area is not very attractive and again, this reflects on the Resort.


I believe that a meeting with owners in May at Cypress is the intention.  If this is the case then I would ask that the following be kept in mind:-


1.                  All owners should be notified and told of the reason for the meeting – concern amongst ‘some’  owners perhaps.  They should certainly not be told it is just a ‘get together’.

2.                  They should be notified well before the meeting date, particularly as some may have to travel. 

3.                  The notices should be posted to a reliable address.

4.                  An RSVP should be asked for so that receipt of notice is confirmed.

5.                  The timing of the meeting should take into account the distance some owners may have to travel, for instance, a Saturday afternoon meeting would give Sydney owners the opportunity to travel up and back in the day.


Unless all Owners respond to your notice, how do we know whether there is apathy amongst the Owners or just bad addressing of envelopes?   As I have said above, not all Owners receive communications. 


This is a great place and is enjoyed by many.  It would be good to know that that will continue for a few years to come.  I think it is time to work together to protect all of our investments, large and small.  There has been apathy on both sides of the fence but let’s just get over that and start cooperating with one another.  If we don’t, our Villas will fall into disrepair and the impact that will have on the Resort will be devastating.




Yours faithfully

Letter from Owner to CEO
Cypress Lakes Group

Dear Mr. NG

We are concerned about the issues raised by Michael Marks in his letter to you and the failure of the letter from Ernie Hall to respond in a clear way to any of those issues. Our primary concerns are:

1. The apparent double dipping in the strata levies

where we pay for maintenance of facilities and are then asked to pay to use these facilities that we maintain, as is outlined in a letter we received from Debbie Harry. It is impossible that the strata levies for our strata, approximately $200,000 is spent in the strata, so we assume it is spent on facilities maintenance.

2. The lack of accountability ie. No competitive

quoting, the lack of commercial judgment and transparency in the expenditure of the strata levies and the apparent lack of planning and management of the sinking fund.

3. The 2 tier approach that seems to exist in regard

to maintenance, the leased units getting attention and the private villas getting little or none.

4. The approach to strata billing. We have had 2 bills

so far, both wrong and nothing is done to rectify them. It seems impossible to speak to the strata manager John Edwards. We have several strata properties and the fees for strata management paid at Cypress seems grossly disproportionate to the level of service and accountability provided.

Our hope is that through your intervention we can have a transparent, moral and fair approach to the management of this project. Currently it feels like taxation without representation. We look forward to your response.

Letter from Owner to CEO

Good morning gentlemen. As you know, my wife and I own two Villa’s at the Resort – one of which we have removed from the lease back arrangements because of the proposed renewal terms which (for a whole lot of reasons) we considered unfairly stacked in the company’s favour. This communication is not intended to canvas that side of things again however I am writing to support the current groundswell of discontent about the way Body Corporate affairs and general maintenance are being carried out.


 I understand that an owners meeting has been proposed for May or June and that will give us all more opportunity to air our complaints and suggest improvements for the future. Please try to ensure that we are all given as much notice of that meeting date so that we can, if at all possible, organize other commitments accordingly. My/our primary concerns pertain to the external building maintenance (i.e painting of exposed woodwork and cleaning timber decking etc), plus the almost non existent gardening & plant care & watering etc.


Whilst research by others does indicate that contract agreements and commitments have been ignored (or severely neglected) in the past, I would not propose to dwell on what has or has not occurred up until this time but would rather work with you and the Resort Management team to establish working criteria for the future which is mutually pro-active and is aimed at achieving the sort of results we all should be expecting. To that end, I hope that owners committee's are put in place so that you know who is representing our interests and we know who to go through if we have a matter of maintenance concern etc.


I look forward to receiving your confirming assurances that the company’s aims are somewhat parallel and that you support achieving improvements to the benefit of your Shareholders, the Villa owners and the Resort guests combined.


Thanks & regards,             


Letter to CEO from Owner

We write to you with great concern regarding Cypress Lakes Resort and the future it holds personally for us as owners



Our main worries are :


Ø Strata Owners pay over $1 million per annum for maintenance in and around the resort, and during the past 7 years we have not witnessed ANY landscape person performing any WORK neither inside or outside our villa (672) – bearing in mind that I/we are at Cypress lakes almost every week.

Ø Our Strata levies are not exactly low-cost therefore; visible acknowledgement of work being carried out re the upkeep of our villa(s) is essential & noteworthy.

Ø The Operator Agreement does not identify, nor is there any information readily available as to how any Owner’s contributions towards Cypress for any maintenance is/was spent.

Ø The RESORT is not living up to its 5 Star status – in fact it is looking a little more than run down with visible signs of destroyed paint, blocked drains, cracked paths, broken guttering, broken water systems and list of other problems which I am sure you are aware of ……………..

Ø This is NOT safe for kids, not to mention how badly kept the balconies are.  My kids cannot go out onto ours without wearing their shoes because of split timbers and loose nails that have injured their little feet.

Ø We cannot afford to be complacent at this stage – I understand that the rating status for Cypress Lakes is good, albeit if we continue to neglect these problems, it won’t be up there for too long.  If compared to the newly opened Crown Plaza – one should be truly concerned as competition is on the rise and individuals do prefer pleasant surroundings. 



We believe that it is fair to state that as Owners - we are not asking for much considering the fact that we have, and still are, paying our dues therefore one should be advised as to what and where the money is going as we haven’t seen much work being carried out around the resort.


This is a major concern because:


Ø The resale of Villas will be a complete challenge – this is apparent by the decrease of re-sale of villas to date

Ø The value of the Resort will drop



Well done for:


Ø       A great job of maintaining the gardens and flowers around the reception and pool areas.  Although this is looking beautiful we assume that this is where most of the strata landscape money is allocated.  I’m sure that you would agree that the resort as a whole does not revolve around beautiful gardens alone!



Best Regards,



Letter to CEO from an Owner
Good afternoon gentlemen.
As you are aware, a number of Private Villa Owners have recently expressed concerns about the management of Cypress Lakes in regard to maintenance of Villas, gardening and related matters.  These problems appear to have been compounded by a lack of clear communication between the senior Management of Cypress Lakes and Private Villa Owners.
Whilst we have the best interests of Cypress Lakes at heart, we also wish to express our concern about what appears to us to be a lack of accountability in regard to the manner in which the Management of Cypress Lakes discharges its obligations under the Operator Agreement and the conflicting roles which Ernie Hall performs.
We have the following specific concerns about our Villa :
  • The outdoor furniture has been severely damaged by the manner in which it was cleaned, presumably by using a water pressure hose. This not only looks unattractive, but is not comfortable when used.
  • Our external windows have never been cleaned by people engaged by management to carry out such work. We notice that other leased back Villas have had their windows cleaned, and this would appear to be unequal treatment.
  • The gardens outside our Villa receive very little attention and as a result, look uncared for and unattractive.
  • The gardens outside our Villa are rarely watered and the watering system is broken.
We understand that John Edwards and Ernie Hall are planning to hold a meeting of Villa Owners sometime in May at Cypress Lakes. This sounds like a very positive step forward and we look forward to being advised of the details of this meeting.
We would appreciate receiving your response to the abovementioned concerns.


Letter sent to CEO by Owner


The garbage in the s overflowing.    


Swarming with flies and the crows and the animals empty out parts of the garbage each night.  One bin has no lid so it makes it easier for the scavengers.  And on another the lid is broken.


I pick up what we can from around the bush as it gets scattered by the birds and animals but now it has gone beyond what is reasonable


I see yesterday that the garbage's at the bottom of the hill were emptied but they could not come another 100 metres and empty these.  Obviously they complained earlier.


Not sure what your Cypress guests think about this level of filth but I am confident they would not be impressed by a 5 star resort with rotting garbage.


Is there no regular collection of the garbage or maintenance of the facility?


Could someone be sent up urgently to clear.


The strata has the front to send owners letters saying they will be penalized if they do not pay their fees 3 moths in advance.  Could u pass on my concerns to Strata so that they are well aware that if they demand on time payment we should receive some form of on time service and professionally delivered.


Could u please confirm by return e mail that this matter is being attended to urgently.


Resort  visitors must be complaining about this?    I know we are embarrassed when we see guest struggle with this mess as well as ourselves being inconvenienced.


Letter of support from Owner

First of all thank you so much for beginning what I have wanted to begin for years now.

We introduced 5 friends to the resort who all bought in. You have all their details.

I would like you to know I am available to help you wherever possible with this cause.

I have been a private villa owner from day 1 and have now spent approx. $70,000 on levies for what?

A friend of ours becomes a private owner tomorrow and will be making sure her proxy vote is returned to her. I wonder whether others who have changed to private have made sure to get their vote back. If all those owners at least make the inquiry, then the message will begin to filter through that we as a group are now proactive and this has to be a good thing for us.

Please email me if I can be of any assistance. I live in Sydney and do not work. I will be going up to Cypress for the 4 day Easter break this week….. not happy that I now have to pay $2 per pool towel if I wish to use theirs!


Letter of support from Owner
From my observations the resorts modus operandi has been - sell the villas - guarantee a high yield and retain full control - or at least that is how it started.  Then it seems a matter of keeping capital values low so as to keep the yield looking good without having to pay the owner more.

Additionally as owner go alone they make life as hard as possible and cream as many fees as they can - day use fees if any bunnies pay, cleaning charges, and huge levies which I bet funds the facilities they tell us our guests are not allowed to use - again the intent been to make it hard for us to compete.

Fact is they shoot themselves in the foot - our guests generally use facilities which increases their revenue and if they mistreat them it is a reflection on the hotel brand which I think they realise and is why they battle the owners all the time.

I would be delighted to support any class action style disputes - risk being it affects capital growth but since they have been so effective we can't do much harm and may turn it into a better investment for all in the long term.


Letter of support from Owner
Good morning Christine and thank you for your e-mail message which we have just read with considerable interest.
We are very pleased with and very supportive of the efforts you have already and are continuing to make with a view to securing a better outcome for the interests of the Private Villa Owners. As previously indicated, we are keen to add whatever weight we possibly can to support this important initiative.
We have also read Michael's letter to the C.E.O. and wish to place on record our appreciation for what is quite clearly a first class piece of work. Given the thorough approach taken by Michael in carrying out his investigations, we consider that the Private Villa Owners are indeed fortunate to have someone of his calibre buying in to this unfortunate situation. Thank you Michael!
It appears that we as a group of Private Villa Owners have a legitimate case and please count on us to support whatever action is necessary to have the situation remedied.


Letter of support from Owner
My wife and I are the owners of a private villa. We have read your email and Mark's letter and agree with it and support it. I have long been dissatisfied myself with how this money was spent but was too lazy to make enquiries. Well done for taking up the cause, we both appreciate it.


Letter of support from Owner
Dear Christine.
Your email is noted with thanks.
Cypress Lakes needs a good kick in the butt.
As a Private Villa Owner I having paid over $90,000 in strata levies since buying, I am still wandering where my money has gone.
I believe a Class Action by all the villa owners is in need urgently........
Lets all join forces and go forward.


Letter of support from Owner
Dear Christine,
I  was very pleased to read the letter forwarded to Mr Ng by Michael Marks and we are very happy to support
any action taken by the owners of the villas.
Our seven year lease expires on the 27th of this month.
The offer we have received for the next lease is nothing short of an insult, not only have our fees increased considerably,
but the return we are being offered is two thirds less than our previous lease. Instead of being treated like owners we
are being treated like unwanted tenants.
I invested my super in Cypress Lakes, so you can understand how distressed I am. Cypress Lakes are keeping 55% and offering
owners 45% of the net pool.
The projections given to us upon purchase of the villa made it look like a viable proposition for the future, this is not the case.
We would be happy to communicate with other villa owners who are in the same position as ourselves.
I understand that 25% of owners have rejected the new lease offer. However, we were advised that no negotiations will be
entered into.
My concern is what will happen to Cypress Lakes in the future, or does it have a future.
Christine I look forward to your response.


Letter of support from Owner

Hi Christine,

 First of all thank you so much for beginning what I have wanted to begin for years now. We introduced 5 friends to the resort who all bought in. You have all their details, I checked with Sonya.

 I would like you to know I am available to help you wherever possible with this cause.

 I have been a private villa owner from day 1 and have now spent approx. $70,000 on levies for what?

A friend of mine becomes a private owner tomorrow and will be making sure her proxy vote is returned to her. I wonder whether others who have changed to private have made sure to get their vote back. Can you add that to your next email. If all those owners at least make the inquiry, then the message will begin to filter through that we as a group are now proactive and this has to be a good thing for us.

Please email me if I can be of any assistance. I live in Sydney and do not work. I will be going up to Cypress for the 4 day Easter break this week….. not happy that I now have to pay $2 per pool towel if I wish to use theirs!




Letter of support from Owner
Greetings Christine,
 Have just digested your email and thank you for informing me of the ' dilemma ' we, the owners, face.  I have queried from the word ' go ', the levies we pay and have requested so many times, to have various problems sorted via Debbie and indeed had a meeting with ' his lord n' master ' but so far, nothing has been resolved.  Now I'm home again, I be in touch with Michael and Christine and of course, you and hopefully, we can get things into perspective. 
I purposely, didn't pay my January levies, as I am still 'peeved' nothing has been done to my Villa   So I now owe, two levy notices, which I received last week. 
Having been on the Executive Committee of a property I own in North Avoca, I know the responsibility of the Body Corp. etc. ( inside out) and I am very aware, how inefficient Cypress Lakes is run ...
..... please keep me posted as to anything further I can do.


 Letter of support from Owner
Dear Christine
We have for a long time been very dissatisfied with what we pay versus what we believe is being done at Cypress Lakes.
As an example, I was fed up looking at a bare piece of dirt outside the kitchen window. Being aware that in 2005, the gardening component of our strata fees was $61, 201 for 43 villas, I asked the gardening contingent who were at that time cutting down dead trees and bushes along the path, what it was I had to do to get something done about this. I was told a few interesting things. The first was that I should complain to the appropriate person as their budget had been cut and that they couldn't give me any plants.

Secondly, the work that they were told to do by way of tidying up was only to be done outside the villas that were being refurbished.

Thirdly, they were extremely overworked as no extra staff were being employed when staff members were sick or on leave. Armed with this information, I talked to Les Smith who promised me that by the time I was next up at Cypress Lakes, there would be plants on the embankment outside the villa. I am happy to advise that this promise was kept.

There are other matters I have raised with management regarding windows, security, pest control.


Letter sent to Strata Manager from Owner

Dear John,

  I am the owner of private villa for 8 years. I am writing to let you know that all the lights in the trees that light up the stretch of road between the kids club and the bridge have blown out and it is very dangerous at night to walk through the darkness.

Unfortunately I have left messages and emailed the staff at Cypress over the last 12 months as each started to blow to make them aware that they needed changing but my requests have fallen on dead ears. It is now imperative that someone pay attention to my request as it is ‘pitch black’ along that stretch at night and a guest who does not know the road can have a serious injury.

As my strata manager, I have great faith that you will attend to this as a matter of urgency and in future I would like to address all my concerns to you.

As a matter of courtesy, could you email me when the job has been completed.

With thanks,


Letter from Owner to Management
George & David,
Last night my husband went to put some rubbish in the bin only to find that the external lights were not on.  He phoned front desk, spoke to Jessica, who advised that she would report it to the duty manager and have it looked at.  Nothing happened!!
Tonight, Saturday, we returned from dinner only to find that the external lights were not on yet again.
I phoned front desk and again spoke with Jessica who recalled the phone conversation last night.  I believe it was only that I appeared to be most upset that I had to walk into my villa in the dark that something happened.
It seems that we have an endemic problem here at Cypress Lakes in that nothing seems to happen as and when it is required first time and only when one speaks more sternly does anything happen.
I believe all the lights have been recently replaced at Cypress lakes so hence we should have all electricals checked and operational.
Also that means that all the paying guests who were not familiar with the layout had to find their way in the dark last night and again tonight.  Is this the way we at Cypress Lakes operate?  It certainly does not have the stamp of a 5 star resort, does it??
I look forward to improved response to situations as and when they are first reported.


Letter from Owner to Management
As you know we spend quite a bit of time up here and are most interested in the integrity of the resort and the use of sinking funds that go towards the maintenance of all villas.
In that context I would like to point out what we viewed today and take it in the spirit it is meant as feed back to you.
I presume you are well aware that the water blasters on the balcony of villa 531 today and presumably moving along that row of villas.
As we were on our walk today I was amazed to see that after we had recently explained that water blasting of timbers did nothing other than splinter the timbers and compromise the integrity of the balcony timbers and also the furniture.  I could see the pressure strength being used by the amount of water coming through the floor area. 
Who is actually supervising this job this time?
I feel like I am repeating myself but I thought I mentioned there was a product on the market called Wet and Forget which you mix with water and gently spray on the timbers and all the moss and dirt disappears.  I treated my timbers with this and it works.  It only takes 24 hours and you have clean timbers once again.
What really concerns me is that the process is being continued with the result being the destruction of property.  These are villas owned by individuals as part of a body corporate for which strata fees are paid.  Part of the fees paid are to cover maintenance.  Surely that does not mean that it allows for destruction in the process.
We did demonstrate to you the destruction of the paint on the brick work of our building as well as the destruction to the timber on the facade of our villa all of which was caused by these water blasting jockeys who did not understand what pressure should be applied where to different surfaces after all they are just removing the cobwebs and dirt from the buildings.