I've noticed that some condo hotels have living restrictions. Does this mean that you could never be a full-time resident, or that condo hotel owners could never decide to spend three winter months there?
That depends on the management program of the individual condo hotel and also the living restrictions that may have been imposed by the city where the property is located. In most cases, you cannot be a full-time or near full-time resident in a condo hotel with living restrictions. However, I probably shouldn't say this, but between you, me and the lamppost, there usually aren't any room-check cops who keep track of how long a person has been in their unit.
Why is there a limit of use of your unit?
A condo hotel unit is intended to be used as a second home, not a primary one, and it is to be operated as a hotel. If everybody could use their own condo hotel units as much as they wanted, then there's a strong likelihood that the hotel would not have enough rooms to rent out to guests. This would greatly limit the revenue the hotel would make. Plus, because the hotels could not pre-book units, since there might not be units to rent, it would be hard to get a good management company to take on the assignment. Also, a city does not collect a hotel tax from owners using their own units. Cities collect hotel taxes from hotel guests, and that factors that into their budget when they grant the developer the right to build a condo hotel when he may have preferred to build a straight condo. Many cities are imposing living restrictions on condo hotels, even though the individual property may not have usage restrictions. Therefore, before buying a condo hotel unit, be sure you know the living restrictions that apply not only by the condo hotel's management company but also by the city in which the condo hotel is located.
What happens if I stay longer than the allotted time to stay in my unit? Or if I would like a friend to use my unit?
Most condo hotels will permit you to stay beyond your allotted time at a discounted hotel rate. As for a friend staying in your unit, that's not a problem. It counts towards your 90 days unless your friend is a paying guest.
Don't living restrictions hurt resale value?
Not really. Many condo hotels have living restrictions so it's a commonly accepted practice. Also, most buyers of condo hotel units are investment minded. Otherwise, they could buy a straight condominium or even a hotel residence which is an individually-owned hotel room that is never put into the hotel's rental program.
I was under the impression from your website that the point of owning a unit in a condo hotel was maximum flexibility.
It is, you can use your unit whenever you want. You don't ever have to put it into the program. You can rent it yourself or through a broker. A lot of flexibility. And, if you want to live there year-round, you probably could. Probably. However and here's the real kicker, because of the condo hotel documents you would sign upon purchase, you could never claim your unit as your Homestead and get the tax exemption. Assuming that this was your permanent address, a Homestead Tax Exemption lets you knock $25,000 off your real estate taxes' appraised value before they compute the tax.
The above question(s) were submitted via e-mail by a visitor to www.condohotelcenter.com. The answer was prepared by Joel Greene, a licensed real estate broker with Condo Hotel Center which specializes in the sale of condo hotel units and fractional ownerships in private residence clubs.