Outside of Florida, the area with the most condo-hotels is Las Vegas, especially on or near the Las Vegas Strip. Aparthotels are also popular in thriving cities such as Chicago, New York and Toronto. Outside of the United States, aparthotels are located in the Caribbean, including resorts in the Bahamas, Turks and Caicos Islands, and Jamaica. The hotel condo concept has also become popular in Mexico. In the Middle East, Dubai is the dominant force in the condominium market with many five-star resorts in development. There is no doubt that condo-hotels are a fascinating approach to housing development, and as their use becomes more common in the market, understanding of the accommodation industry and the condominium buying arena is expected to increase. Anwar Elgonemy lives in San Francisco and has over 10 years of experience investing in accommodation. Since joining Jones Lang LaSalle in 2001, he has been involved in hotel counseling, transactions and blame. Elgonemy holds an MBA from Thunderbird and a Bachelor of Science from glion School in Switzerland.
Since the hotel owner administers the rental program in favor of the unit owner, the unit owner must indemnify, defend and indemnify the hotel owner for all liabilities arising in whole or in part from the maintenance, renovation, replacement, repair, condition, rental, the management or operation of the hotel, unit or rental program. or the performance of the contract, unless such liabilities are caused by gross negligence, wilful misconduct or illegal actions of the hotel owner during the term. The owner of the accommodation is also responsible for all amounts due to the hotel owner under the agreement, as well as all fees and costs for hotel services used during the owner`s occupation and not otherwise charged at the time of departure. Most aparthotels have wonderful features and services that increase their attractiveness for potential buyers and future tenants. Typical amenities include spas, health and fitness centers, fine dining, a business center, and more. Services include valet parking, concierge and maid service. The unit owner must recognize that conflicts may arise between the unit owner`s right to use the unit and the hotel`s need to rent the unit. Most agreements prioritize the needs of the hotel. These conflicts arise in the case of guest bookings that (i) affect the usage time allocated by the unit owner due to occupancy requirements and/or (ii) if there is a guest reservation or resident for the unit beyond the date of termination of the agreement.
In some aparthotels, the owner of the property may keep personal belongings on the premises while in the house. In these circumstances, the contract must require the removal of personal belongings and/or give the hotel permission to remove and store the items. Property taxes are usually paid directly by condominium owners, and the hotel manager pays their operating costs, such as salaries and other direct costs of the hotel. The third party is eligible to win and may even have professional management taken over by a brand such as Marriott or Hilton. The owners of the unit have no say in how they manage or evaluate third parties. Aparthotels are usually located in highly sought-after areas, often near the ocean, in theme parks, courtyards or in major cities. Miami and Miami Beach were the first regions to get large condo hotels, and for a few years they had the largest inventory of condo hotels in the country. Any measures necessary to maintain the hotel standards set by the hotel owner at its sole discretion will be borne by the owner of the unit. To ensure that sufficient funds are available for replacements, repairs and renovations, the hotel owner will recognize a reserve of 5% of gross rental income (“Reserve Account”). The hotel owner must reserve the right to adjust the percentage of the reservation from time to time. While it is not yet known how the units will be sold a second or third time, or at times when hotel operations are moving in the wrong direction, condo-hotels currently offer a way to finance the construction of new properties.
Some parts of the U.S. have a large amount of unused hotel portfolio, and many hotel owners are interested in converting some or all of their properties into condominium hotels. The initial duration of the term is a business decision that is determined with the hotel owner and the operator. Most contracts are automatically renewed for the full initial duration of the multi-year. In the interests of fairness, the hotel owner should be given a full period of six months before the expiry date in order to receive written notification of the non-renewal. Be careful with start dates. For a project under development, the duration of the rental program should begin when the hotel is open as determined by the hotel owner, not on the date of signature, or when ownership is transferred to the owner of the unit. Condo-hotels are a fairly new concept. Here are the most frequently asked questions and answers. Due to high demand, most condominium hotels experience several significant price increases before they sell, and most sell well before construction is complete. In some cases, aparthotels sell out even before construction begins.
Responsibility for the maintenance and repair of common elements is assigned to condominium owners on a pro rata basis. An owner`s association (HOA) is usually created to retain ownership of these areas and to oversee the collection of contributions from unit owners. These fees generally cover reserves, maintenance of common areas, property insurance and incidental costs. To expand this a little further, I ask the same of my MBA students. Some are owners, usually apartment owners, and when I ask, “How many of you read the statement?”, the answer is usually “What is an explanation?” In the interest of providing a high-quality and consistent product to the hotel guest, the operator will claim that standards are the most important section of the agreement. Since the branded hotel condo is a relatively new product, the typical luxury condo hotel is new or recently renovated and has not suffered the inevitable wear and tear of the aging property. Most branded hotels require the purchase of a standard FF&E package and a standard farm supplies package if they enter the rental program with a substitution ban. Sufficient reserves should be assessed every five years for a renovation and replacement of FF&E. All FF&E purchased through the unit reserve remains the property of the unit owner and all proceeds from the sale of used furniture are deposited in the reserve.
Any reserve balance must be paid to the unit owner at the end of participation in the rental program, unless the hotel owner approves the assignment of the contract, after which the reserve account is held in favor of the next owner. A recommended practice is to prioritize hotel guests` reservations over the unit owner`s requests, unless the unit owner`s reservation is made within the specified notice period. Since each project is unique, the hotel owner must determine the advance notice required for the owner`s reservation based on off-peak and peak seasonal considerations. In high season, a notice period of six months to a year for the use of the unit is not unreasonable. Notwithstanding an owner`s pre-booking, the owner of the unit should not be guaranteed occupancy rights, as the hotel`s inventory may not be sufficient to meet guests` needs. An owner of the unit can expect to have to pay certain expenses directly to the beneficiary. Examples of expenses generally attributable to a unit include dues and other amounts owed to the condominium corporation, reserves, fees and charges due to the hotel owner; Utilities that are not covered by condominium valuation, property and personal wealth taxes, debt service resulting from debt service for the unit and its contents, and all insurance costs. In addition, owners are likely to receive a higher level of rental income by participating in the property`s rental program, which is run by a recognized professional operator who can benefit from the hotel`s national affiliation, brand, sophisticated reservation system, and management expertise. Further details on the proper functioning of condo hotels are highlighted as follows:  An aggressive hotel owner may also expect condominium hotel rooms owned by the hotel owner to have rental priority over all condominiums participating in the rental program. Aparthotels offer the ownership of stress-free holiday homes.
The local management company takes care of all maintenance, upkeep and interaction with tenants. The industry is currently reorienting its strategy towards the full sale of the hotel management opportunity to nationally affiliated hotel companies and operates these properties in the same way as a traditional hotel operation. This was achieved by listing all previously mentioned hotel features separately as individual condominiums. These commercial condominiums are then sold to a hotel operating company. With leases from individual condominium buyers, this allows the hotel operator to effectively manage the property as a hotel. Although the unit owner controls his unit, for the hotel owner`s access and for general security purposes, the hotel owner may, at the expense of the unit owner, make any necessary changes to the locking and/or security system so that the unit complies with the hotel`s locking and security system….