Does anyone here own a unit in a condotel? A friend of mine asked me this question last night, and I admit to drawing a complete blank. "What happens if you own a unit in a condotel and the hotel/building goes bankrupt?"

I know that in normal condominium buildings it's a question of dividing the debt among the condominium owners (shareholders) and either creating new debt, or raising fees or a combination of the above. In the event that this can't be accomplished, each owner owns a percentage of land that the condominium sits on.

But... none of those things can apply to foreign owner in a Condotel. (Or am I wrong?)

It seems to me that there's not really any way to divide debt among residents as the residents (in total) represent a small share of the overall business (which is primarily a hotel).

Secondly, as a foreigner you can't own land -- so giving you a percent ownership of the land the condotel sits on isn't an option either.

So are condotels the worst investment class ever?

It seems to me that condotels offer a 100% risk scenario from which there's potentially no recourse to foreign owners.

Am I looking at this right? Are there any condominium owners who own a unit in a condotel here?

Logic would dictate that all profit or loss are equitably shared.

Would you have raised such an issue if the condotel made a profit?

trogers,

Yes that it is my conclusion as well. And this is a 100%, black-and-white difference in that case from being an owner in conventional condominium, where "loss" is determined by a far different set of criteria than the hotel business which is a vastly different business model.

The issue here is that the business operations of the hotel aren't within the voting rights of the juristic condominium owners which have a very small minority ownership.

The issue isn't 'complaining about loss' and being 'accepting of profit' as you seem to be drawing a line between. The issue is that condominiums are typically low-risk enterprises, and hotels are high risk.

If the hotel portion of the development goes into liquidation, its assets will be seized and auctioned off, and the new owner will take over and still run it as a hotel. The whole development cannot be sold off and building demolished when there are minority condominium owners holding chanotes on the development.

The only grey area I anticipate is the rights to use common area, which is a grey area in most mixed residential and commercial development.