What is a condo hotel?

par Amélie Galarneau

In recent years, the real estate world has seen a boom in condo hotels. The formula allows buyers to enjoy a secondary residence in a resort area and have the benefit of rental income without the worries of management and maintenance. Me Boileau, notary, sheds a light here on what constitutes a condo hotel unit.

Revenues

A condo hotel is a co-ownership property, furnished, located in a hotel project. Management of the property is entrusted to a hotel operator who is responsible for providing all rental services (reservation, reception, general maintenance, advertising.) and for renting the unit to customers and guests. The condo hotel is governed by a rental program which varies from project to project. Revenue sharing varies with the daily occupancy of the units, in the case of a rental pool, and as a function of the project specifics. Revenues are shared between the owner and the manager. Whether the unit is rented or not, each owner not personally occupying their unit on a given day participates in the revenues, which are compiled and divided monthly in accordance with a percentage attributed to each unit.

Personal Usage

Most hotel co-ownership projects anticipate a maximum personal occupancy per year of 10 per cent. There are restrictions on some periods of the year (Christmas week, school break). In addition, the owner does not participate in the revenue sharing when they occupy their own property. In some cases, it’s possible to withdraw the unit from the rental program after giving the manager due notice. From that point, there may be tax consequences (GST, QST). During that period, the owner is not permitted to rent out the property or to have a third party do so.

The Costs

There are costs to consider: municipal and school taxes that vary in accordance with the value of the unit, the TRA (Tremblant Resort Association) fees, condo fees which include maintenance, renovations, repairs, electricity (sometimes), third-party liability insurance. It should also be noted that special contributions may be required by the “syndicat” – the condo management board – related to project renovations and to furnishings. One appreciable point: the rental of a condo hotel unit constitutes a commercial activity, which means that the owner can register for the GST and QST and then proceed to a self-assessment tax on income and not have to pay tax to the seller at the time of purchase.

Tremblant co-ownership hotels have improved their overall returns in recent years. The mountain is unquestionably in good health, with know-how that maintains its ongoing international attractiveness and reputation. Bearing in mind that the premises are managed by a third party, that there are rental revenues, and that an owner can benefit personally from the extraordinary Laurentian playground, it’s well worth considering the option of purchasing a condominium hotel unit in Tremblant.

Different Needs, Different Options

Tremblant resort features numerous different condo hotel options to suit your needs, including Ermitage du Lac, Fairmont Tremblant, Westin Resort and Spa, Residence Inn by Marriott, Holiday Inn Express, Lodge de la Montagne, Homewood Suites by Hilton, Hotel Quintessence, Johannsen, Deslauriers, Le Sommet des Neiges and the Tour des Voyageurs. Visit the Engel & Völkers real estate boutique in the heart of Tremblant resort to have your questions answered.

 

Note: This text does not constitute a legal opinion. The reader is invited to consult a notary or lawyer to learn more.

agent

Amélie Galarneau

Real Estate Broker

+1(819) 430-7085

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