Community Announcement Sept 2022

This community announcement is sent to all unit owners of Bohol Jewel in order provide updates and discuss issues. You can also leave comments and have discussions at the end of the announcement. Here are the topics for this announcement:

1. Status Update of Bohol Jewel Residences
2. Budget and Management details
3. Inflation, Price Increases in the Philippines
4. Selling or Renting your apartment at Bohol Jewel
5. Generator and Internet
6. Security Issues and Updates to our “House Rules”
7. Maintenance Services Provided by BJC to Apartment Owners
8. Annual Meeting will be October 31, 2022

1. Status Update of Bohol Jewel Residences

Now that the Philippines has opened back up, things are getting back to normal in Bohol although incoming visitors are only 50% of pre-pandemic levels. Elsie and I are still not in Bohol, we will be returning soon after one year overseas. In general the property is OK, our pool and garden are fine, but many things need to be addressed. After two years of inactivity, the staff needs training and there are maintenance issues that are starting. I will go into further detail about maintenance issues in the next section, “Budget and Management Details”.

In May I had a meeting with some owners in Bohol and I wanted to share what was discussed and also add a few important things that all owner should be aware of.

• When will the remaining apartments be finished?
  There are currently 10 apartments that remain unfinished, all of them in building 4. Out of 10 only 2 are sold. The rest are unsold and we have had no buyers for over 2 years. We already started to finish the remaining apartments so we can complete the property even without buyers. We will finish the apartments on the second floor of building 4 first, and then we will continue with the ground floor.
• Why are parts of the property still unfinished?
  When you bought your apartment, not everything went into your apartment. Some also went towards the common areas, the swimming pool, and the rest of the property. Because 10 apartments remain unsold, there is some budget missing for the total completion of the property. I expect this to be resolved as the remaining units are finished and generate rental income.
• There is some wear, something broken, or something that needs to be fixed in my apartment, who will do it?
  As a general rule, the front desk and management are responsible for common areas only. Everything inside your apartment is the responsibility of the apartment owner, including the windows, doors, roof-decks, ceiling fans, electric breakers and meters, tiles, etc. There is some grey area if the construction was done improperly or if something was not finished completely, that may be the responsibility of the builder (me). But in general if something happens or breaks over time then it is the responsibility of the owner. If there is a damage that is caused from outside your unit like water leaking from the roof, that will be the builder or management’s responsibility to fix the roof. If there is some wear or something that has broken due to time, weather, sun, temperature, humidity, storm, that will be the responsibility of the owner.
• What is our budget for future maintenance, is everyone paying the monthly fee?
  Our budget for maintenance will be discussed in section 2. Almost all owners are up to date with their monthly fees. Yes, Elsie and I also pay the monthly fee for our two apartments in building 1 and starting in August we also pay for our three apartments upstairs in building 4. There are a few that are behind but I expect them to catch up sooner or later. The 5 upstairs apartments in building 4 are starting their monthly fees in August 2022, the 5 apartments downstairs will start paying as they are completed. That will be all 44 apartments.
• What is the status of the corporation and permits? BJC was licensed by the Philippines SEC in 2018 and we are free to operate for 50 years as long as all requirements to the SEC are met. All requirements until end of 2022 have already been met, taxes paid, and we are currently in good standing with the SEC. This is different from the mayor’s permit which needs to be renewed every year and we will renew that when we are back in Bohol.

2. Budget and Management Details

In mid-2021 we were spending much more than what was coming in. We had discussions with some owners living at the site and decided that we would cut some expenses of the property because most other owners could not enter the Philippines. We cut the guards from 2 to 1, the manager to half time, and some lights would be shut off at night. We also started the monthly fee for building 1 in May 2021. These together got us from a negative -432,496 in April 2021 to -100,000 balance now. Update: after paying for the new pump and pressure tank for building 2 our new balance is -159,727.

Even though we have a negative -159,000 balance on paper, in cash we have a positive 180,000 peso balance. This is primarily because some owners have paid in advance, and others have not taken their withdrawals. So this leaves us with a little reserve in case there is an unexpected repair that needs an urgent fix. So basically we are doing much better than we were one year ago.

Now that the residences are occupied again, we had to hire a new guard, increased the manager to full time, and the lights are on at night. We also started charging the monthly fee for apartments 406-410 starting August. We will start the monthly fees for apartments 401-405 sometime later this year as they are completed.

We keep a detailed account of all the expenses of Bohol Jewel Residences. These are different from the expenses of the builder, or the expenses of the sub-renters, or the expenses of the bar/restaurant, etc. The expenses of BJR are everything that we spend the monthly fees on. I make all expenses of the residences available to all who pay the monthly fee. I have put all expenses on spreadsheets so all owners can see for themselves. It starts with a summary of the entire year, and has a separate “sheets” for each month detailing all expenses and receipts from monthly fees. Whatever balance is left after paying the expenses is what we have available for future maintenance (again this is different from our cash balance).

2020 Expense Reoprt
2021 Expense Report
2022 Expense Reoprt

If any owner wants more information about these expenses you are welcome to ask and we will provide as much detail as possible. I understand that everyone who pays the monthly fee has a right to ask for evidence and proof of where the funds are spent. Joy keeps most receipts at the office and I also have emails and invoices available. There are some transactions that are paid in cash such as when the electrician comes to fix something, but there are always ways of verifying the expense independently such as asking the electrician how much he was paid. I have no problem with anyone who wants to verify our expenses. We do not have an outside auditor or bookkeeper that makes a report of our expenses or who is paying their monthly fee. It’s the responsibility of all of us unit owners to organize ourselves to pay the bills of the property, no one else will do that for us. The monthly fee is the way we have chosen to do that and we have put the management in charge of paying the bills. The management then provides a report like the ones above and keeps the receipts and invoices for verification.

Extraordinary expenses. After Typhoon Odette hit Bohol in December 2021, we needed to do some repairs. This was especially to replace the “spandrels” ceiling panels on the outside walkways. The total cost of these repairs was 64,000 pesos (58,000 for spandrels, 6,000 for broken glass and other). We also recently replaced the water pump and pressure tank for building #2 because it broke. The total cost for that is 61,670 (20,670 pump + 2,000 labor + 39,000 tank). This is not something that we planned for or that we have budgeted. The monthly fees were supposed to pay for “regular maintenance of common areas”, but a typhoon is not regular, and the pumps were expected to last at least 5 years, so our overall budget has been negatively affected. Actually if we didn’t have these two extraordinary expenses we would have a positive balance now available for future maintenance.

Management. Bohol Jewel Residences are managed by the staff who work for us. This includes our front desk manager Joy, the helper and pool guy, and the security guards. The directors of the corporation and not part of management, our job is to hire the manager(s), helper(s), guards, and other professionals to keep the corporation in good standing. Elsie and I do not work for BJC, we are not employees and we don’t receive a salary. We are owners just like all of you. We spend a lot of time working on things at BJC including training and supervising the staff, communicating with other owners, and overseeing the general welfare of the property. I recognize during this past year that it’s difficult to oversee the property from far away so we plan to always spend some time in Bohol every few months.

This is different from my role as builder. I am handling all unfinished apartments, improper materials such as replacing the balcony railing in buildings 2+3. The day-to-day management is separate from the responsibilities of the builder. Things age quickly in the Philippines and it is not appropriate for owners to complain to the front desk when something in their apartment is not working. The front desk handles only common areas and is not responsible for wear and tear in your apartment. If you feel that the builder is responsible to fix or replace something because of faulty construction, then please contact me (Bill, boholjewelcorp@gmail.com) and do not demand that Joy or the staff fix it, because it is not their responsibility.

Joy. We are lucky to have Joy as our manager but there have been times when she has been pushed too far, in my opinion. There was a problem guest in April that I will talk more about later, but there have also been owners that mistreated or disrespected Joy. Even raising your voice at our manager is unacceptable. I hope that everyone will understand that Joy is there to help run the property, without her we will be the ones to pay the bills, mow the grass, and clean the pool. She works for ALL OF US and answers to the directors (me and Elsie), so no one owner has the right to tell Joy what to do. She is also NOT responsible when something goes wrong such as bad internet, generator not working, sand in your faucet causing low water pressure. We as the owners bear responsibility EQUALLY for the care and continuity of the property.

Joy is hired by and works under the directors of BJC, which is mostly Elsie and me. We work closely with Joy every day, communicating by phone, email, whatsapp, fb, etc. We train her on how to handle different situations. We go over what needs to be done, we review cctv footage, what problems residents are having, billing, invoices, staff (helper and guards), equipment problems, supplies needed, and everything else that happens there at BJC. We support Joy and do everything we can to make her job professional, rewarding, safe and beneficial for her and us. We do this because we know that without our staff the property will suffer. I ask that all owners also support Joy, and our other staff members, be respectful and polite.

Helper. After many months of problems with our pool/garden guy, we think we finally found a good one. Elsie and I spend a lot of time searching for candidates, interviewing them, making appointments and checking their qualifications. JM resigned in June after a disagreement with Joy, and the next helper Ricky just didn’t work out either. Our new helper is named Leo, and so far he is doing well. I have instructed him on how to clean the pool, maintain the filters and pump, mow the bermuda and maintain the overall property.

3. Inflation and Price Increases in the Philippines

For those who have not been back to Bohol in a while you will find that everything has gone up in price. Gasoline that cost 40 pesos before now costs 80. Electricity that cost 8 pesos per KWH now costs 16, and Boheco has informed us that the rate will increase again. The cost of water is up, the security guard agency just increased their price. All materials and supplies also cost more now.

I know that nobody wants to hear that their monthly fees will go up. But in reality everything in Bohol costs more than it did a few years ago. I will try my best not to increase the monthly fees especially after these last two year when everyone’s income has suffered. But at some point, probably next year, we will have to increase the monthly fees if we want to keep up with maintenance and repairs of the property and retain qualified staff. Based on the current budget and price increases, I would expect that sometime in 2023 we will increase the monthly fee from 3,500 to 4,000 pesos.

4. Selling or Renting your Apartment

I mentioned in the last community announcement that it is important for owners to know their responsibilities about taxes, business permits, and complying with local requirements. As a lease holder of an apartment at Bohol Jewel, you already know that you can sell or sub-rent your lease at any time. We support you with this and would like to help where we can. For example, we are best-suited to help you sell or rent because the front desk staff will likely greet any potential buyer or renters that walk in. We might even have a buyer already who did not want another unit but may be interested in yours. It’s also a requirement in the lease agreement we have a “right of first refusal”. It means that you must first offer to sell to the corporation before you can offer to someone else, otherwise the transfer may be invalid. So it’s best to keep us informed of any apartments for sale.

We can also help to rent your apartment, we are already managing the rental of 12 apartments. This includes finding the renters, negotiating the price, checking the units that everything is working OK, communicating with the owner and the renter. We charge the lowest possible fees for check-in, check-out and cleaning. In addition there are required fees like 15% to the website like Expedia or Booking, and 12% VAT. In total this can be between 30-50% of the income from the apartment. You can find our fee schedule here.

If renting your apartment, please read the last community announcement and make sure you follow all tax and business requirements.

5. Generator and Internet

After many months of being broken, our generator is working again and I would like to thank Vojta for finding a qualified mechanic to help with this. When we work together as owners everything runs more smoothly. In order to manage the generator without adding more expenses to our budget, we send a separate bill every time there are generator expenses. This bill shows up as “Generator surcharge” and it pays for diesel gas, and any maintenance or repairs that need to be done. The expense is then divided by all apartments that are occupied at that time. We will send a bill to all apartment owners who’s apartment at the time of a power out or generator expense.

The internet has been on/off lately and can be unreliable at times. We were promised 100 mbps by PLDT when we signed up for their fiber optic plan, but that has been disappointing. I am in the process of updating our hardware and it should be complete in a few weeks.

I have also reserved a Star Link satellite internet for already 2 years now. They are scheduled to have the area over the Philippines turned on in Q4 of 2022. So hopefully by the end of the year we will have a good reliable internet service up to 150 mbps. Unfortunately all these internet accounts and hardware are getting expensive and we cannot use our maintenance budget for this. So we will have to once again start charging a fee for internet use. This fee will be used to pay for internet service, hardware maintenance and replacement. It will also add about 6k to our monthly budget because the monthly fee will no longer pay for PLDT internet.

In summary: The monthly fee does NOT pay for internet or generator. Those will be charged separately based on usage. There is no obligation for anyone who refuses to pay. We will only provide it to those who want it. The monthly fee will be reserved for what it was originally intended: Paying for common area expenses, the salary of the manager, helper, guards, and future maintenance.

6. Security Issues and Updates to Our House Rules

We have had a few security issues at Bohol Jewel this year. Around May 13, 2022, we had a walk-in guest staying on the ground floor of building 2. He complained that he paid more than he really did and became loud and threatening when asked to pay his bill. At the time we only had one security guard who was off duty. The guest was also wanted by another resort for not paying his bill. We contacted the police and this caused us to make some policy changes.

As a result of this incident we hired a second security guard from the agency. He is armed with a gun, has handcuffs, and trained on how to resolve conflicts. Together with our other guard, we now have 24 hour security.

We also got more strict about who enters, shows ID, be on the list of arrivals. And we collect security deposits from walk in guests and ask that they provide reference of where they stayed before.

There was another security threat on August 15. The owner of apt 111 invited a guest who became intoxicated and started breaking everything in the apartment. He also threatened people with a knife. The police was called and he was taken to jail.

This incident is not so easy to avoid in the future. We allow owners to have guests, and we don’t screen them or ask for ID if the owner is present. So there have been no changes made after this incident.

As a result please find an update to our house rules. These are the rules that everyone should abide by when staying at Bohol Jewel. The main thing added was the way we treat our staff and adding penalties for violators. Without penalties, the rules were toothless. As the caretakers of BJR, we rely on our staff to keep things running. We expect everyone at the property to treat the staff with respect and courtesy. We have zero tolerance for anyone who mistreats the employees of BJC. I will personally use every tool at my disposal to protect our staff from abuse, mistreatment, or even disrespect. I advise all owners to know the house rules and penalties in order to avoid problems.

7. Maintenance Services Provided by BJC to Apartment Owners

After 2 years of lock-downs, there are many things that need to be done when you have a property in the Philippines. We would like to provide some maintenance services to owners if they are not able to provide themselves.

• Aircon and coil cleaning and maintenance. Suggested every 6-12 months depending on use. 1000 pesos done by qualified technician. (price subject to change by technician)
• High durability Japanese UV varnish protection coat for 2nd floor exterior wood doors. Suggested once a year. 1000 pesos
• Roof deck plastic-wood pressure washing. Suggested as the plastic-wood gets dark and moldy. 1000 pesos per roof deck
• Water sediment filter cleaning for all faucets, shower, sprays and water heaters. Suggested every month deepening on use. 100 pesos plus cost of new shower head or filter screens if needed.
• Complete water heater servicing to remove calcium, lime, and other obstructions. 2000 pesos per water heater.
• Bathroom drain service removing debris causing slow water to drain. This is caused by hair, dirt, sand, insect or other debris falling into shower, toilet, or sink drains. Suggested as needed. 500 pesos, if toilet needs to be removed extra 2000 pesos. If parts need replacing extra.
• Putting new silicone around the sink, shower, toilet, or counter. 1000 pesos each. Silicone lasts about 4-7 years depending on use. In the Philippines everything has a shorter life so expect this about after 3-5 years.
• Leaky sink drain. 1500 pesos. Sink drains were installed using the provided fixtures that came with the new sink. These are metal, and they don’t last very long in the Philippines. Expect that within 2-4 years these metal drains will rust and leak. We can replace with PVC drains for additional 1500 pesos per drain. If you have double sink it will be more.

The above prices are subject to change. Please inform us if you would like us to schedule these maintenance services for you.

8. Annual Meeting Will Be On October 31, 2022

We will have the annual meeting for Bohol Jewel residents (lessees) on October 31, 2022 at 11am (exact time subject to change). This meeting will be held at the main building in the restaurant area. We plan to allow attendance virtually using Zoom, details will follow.

At this meeting we will discuss issues that concern the resident lessees. This is a time to ask questions, propose solutions, clarify anything that is not understood, and discuss among all owner the direction we would like for the property.

Stockholders will be allowed to vote for directors of the corporation before and during the meeting. Anyone who would like to present themselves as candidate for director needs to inform us at least two weeks before this date so we can check their qualifications and add them to the ballot. In order to be on the ballot for director one must meet the following:

• Own at least one share of stock in the corporation. All lease holders who have completed their payments are qualified.
• Be a permanent resident in the Philippines. Either you are a Filipino citizen or you have a working permit (13a, SRRV, etc). Although directors receive no salary and are not considered employees, they are required to be permanent residents of the Philippines.
• Have no criminal record. If you have been convicted of a crime, have gone to prison in the Philippines or have pending criminal case you are not allowed to be director of a corporation.
• At least 60% of directors must be Filipino citizens. Because we have 5 directors, we can have only 2 foreign citizens, the rest must be Filipino.

I remind everyone that Elsie and I remain majority stockholders of the corporation. Therefore the election of directors is really a formality that we must do to comply with SEC rules. The real purpose of the general meeting is to discuss issues with all owners, to hear from different views, share thoughts, answer questions, and decide on things that will affect everyone. If anyone would like to participate in the responsibilities of the property there are other ways to do that than being a director. I urge anyone who would like to be part of responsibility and day-to-day decisions about the property to contact me. I am always open to someone else helping with the training and supervising the staff, fact checking the invoices, bill paying, communicating with other owners, scheduling maintenance, complying with all requirements, collecting past due balances so we can pay our bills, etc. However such activities must be coordinated with the front desk so please contact me first so I can inform the staff and prepare you for these responsibilities. Do not start doing these on your own without informing us first.

A few more pictures from Bohol Jewel from the last few days…

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