Q&A for Living Restrictions at a Condo-Hotel

Posted by Roman Bodnarchuk on Sep 21, 2011 7:00:00 AM

Man Thinking about condo hotelsLiving Restrictions at Condo Hotels

Q: Why is there a limit of use of your unit?

A: 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.

Q: 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?

A: 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 reserved days unless your friend is a paying guest.

Q: Don't living restrictions hurt resale value?

A: 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.

Topics: 2011 real estate, Q&A about condo-hotels, condo-hotel restrictions