In recent years, the purchase of real estate for investment purposes has become an increasingly popular form of capital investment. This trend applies not only to residential premises, but increasingly also to commercial premises - including tourist premises. The purchase of real estate in a building is associated with joint ownership, which is more complicated in the case of commercial and tourist premises than in the popular residential. I invite you to read the article, in which I will introduce the possible forms of co-ownership of tourist properties.
">Thedeveloper's perspective- a form of co-ownership
One of the main problems arises when the developer hands over full control of the project to the architect. As Oliver points out, this often leads to having to go back in the process and fine-tune the building's features. Detecting an error at the design stage is not that costly. The problem arises when the error is noticed during construction, in which case the investor incurs much higher costs. Adrian also stresses the importance of an in-depth analysis of the plot's location, especially its main assets, which affect the structure of the building. For example, if there is an aqua park in the neighborhood, it does not make sense to duplicate this function in our facility - a more modest water infrastructure will suffice. In addition, it is essential to determine the profile of the target customer even before design begins. We will design different unit sizes for "second home" type facilities than for strictly investment facilities.
When you design for investors, you need to know their needs
When planning the implementation of a multi-unit development consisting of commercial premises for tourist purposes (accommodation and hotel), investors face a dilemma as to how to organize the maintenance of common property and how to arrange legal relations within the framework of the resulting co-ownership. Unlike in the case of residential premises, the legislator here does not provide for the only available solution of the type of "residential community for commercial premises," thus leaving a certain freedom in the choice of the ownership structure of the future investment. The starting point for its determination are the provisions of the Civil Code on co-ownership. As a rule, the Civil Code provides for fractional co-ownership and joint co-ownership, which in practice translates into two basic forms of condohotel and aparthotel investments.
">Aparthotels, or joint ownership.
An aparthotel is a facility that combines the features of a hotel and an apartment. In the case of aparthotels, the right to use the apartments and hotel services is acquired, while there is no physical separation of the premises. The realization of the right of ownership consists in the purchase of the exclusive right to use a part of the property (a specific apartment) to a certain extent. Technically, the realization of the transaction usually involves an entry in the land register of the building and can be compared to co-ownership of a parking space in an underground garage. Acquisition of the right gives the right to exclusive use of a specific part of the property under joint ownership. This seemingly insignificant difference from the customer's perspective can be significant for the investor and the operating company. In aparthotels, common parts, such as corridors, elevators and parking lots, are managed by the property management company. Unit owners in aparthotels have the right to use these spaces, but do not own them. The cost of maintaining the common areas is usually included in service charges, which are paid by the owners, but the extent of these costs is regulated by contracts with the operator company. An additional restriction on the buyer's use of the property is the need to obtain the consent of the other co-owners of the property to dispose of the shares.
">Maintenance costs ofcommon areas
The key difference between the two co-ownership models described above is the cost of maintaining the common parts. A condohotel development implicitly assumes that ownership of the common parts is transferred to the owners of the units and thus the costs of maintaining them are transferred to them. In the case of aparthotels, ownership of the common parts remains with the investor (the owner of the facility), so the cost of maintaining common parts such as a swimming pool or gym, for example, lies with the investor and is only later transferred to the buyers of the shares. Key to the extent of cost participation (total or for part of the services) is the management contract.
At this point it is worth mentioning the swimming pool, which is increasingly becoming a feature of apartment buildings in coastal locations. The ownership structure of an investment can significantly determine maintenance costs, not only in terms of answering the question of who will bear these costs - the co-owners of the apartments or the investor, but also the amount of these costs. In the case of condohotels, the swimming pool will be jointly owned by all buyers of the units and thus they will bear the costs of its maintenance. The second important issue is the accessibility of the pool to outsiders. In the case of aparthotel developments, where the pool is owned by the investor despite the sale of the units, making the pool available to outside guests can be a source of additional revenue, but is associated with more stringent sanitary requirements regarding water quality and safety (such as signage or the presence of a lifeguard).
