Questions and Answers

Q.  When does a condo in a hotel become a security?
A. When a hotel requires that you put your unit into a requiered rental pool with all the other owners, the unit becomes a security.
Q. How does a rental pool work?
A. Basically, all profits from the rental of the hotel rooms are pooled. Then, each owner shares equally in the net operating profit based on the percentage assigned to the size unit owned. Additionally, as a prorated shareowner of the common areas (bars, restaurants, shops, video games), owners share in the income and expenses of these areas.

Q. Are all condo hotels securities?
A. No. There are hotel condo units that share in common areas, but do not require the pooling of income or require an owner to rent your property.

Q. Can I occupy my condo unit any time I wish at reduced rates?
A. Condo hotels that have a rental pool requirement often offer a usage plan that allows owner use at reduced rates during low occupancy. However, during high demand, the unit owners are not given reduced rates in favor of expected rental income.
Q. Do I get a fee simple deed to my condo unit?
A. Yes, in most condo hotels, owners get a a fee simple title to their condo unit.

Q. Can I sell my condo hotel unit myself?
A. Yes, as an owner you can sell your security to a buyer. If an owner does not know a buyer and they wish to sell, a registered broker/dealer can assist them in putting the unit up for sale in the secondary market.

Please e-mail us if you have a question(s) for us to answer. Thank you.

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