The condo hotel contract clause checklist

01Ownership and use

• Deed type and exactly what conveys: the unit, parking, storage, furniture, or furniture by separate bill of sale
• Owner usage rights: maximum nights, reservation notice periods, peak-season limits
• Whether personal belongings may stay in the unit between owner visits, or the unit must remain hotel-standard
• Residency prohibitions: many declarations bar full-time occupancy outright

02Rental program mechanics

• Mandatory or voluntary participation, and whether outside managers or self-managed short lets are permitted
• The revenue split percentage and, more important, the list of charges deducted before the split applies
• Credit card fees, booking commissions, and marketing or franchise contributions: who absorbs each
• Rotation policy: how guests are assigned among comparable units, and your right to occupancy reports
• Housekeeping and linen charges for guest stays and for owner stays

The mechanics behind these clauses are explained in how rental pools work; read that chapter first if any line above is unfamiliar.

03Operator and brand

• Term of the management agreement and each side's termination rights
• What happens to enrolled units if the brand or operator changes
• Performance standards, if any, that the operator owes owners
• Whether the developer retains unsold units and how those compete inside the pool

04Money clauses

• Association dues and what hotel services they fund; compare against a residential building of similar size
• FF&E reserve: the schedule on which you must refresh furniture and softgoods, and at whose specification
• Special assessment rights and the association's borrowing power
• Real estate taxes and how the jurisdiction classifies hotel condominium units

05Exit terms

• Resale restrictions, rights of first refusal, or transfer fees payable to the association or operator
• Whether the rental agreement binds a buyer of your unit or terminates on sale
• Assignment provisions for preconstruction contracts, if you may need to exit before completion

06Securities and legal risk

US law treats some condo hotel sales as securities offerings. The test is not the deed but the sales package: when a unit is offered together with a rental arrangement and the buyer is led to expect profit from the operator's efforts, the offering can be an investment contract. Hospitality practice groups have written extensively on the line, including Akerman on when being a security can even benefit the structure and Holland & Knight on Rule 506(c) financing of condo hotel projects. The Condo Hotel Center legal summary states the core proposition: the offer and sale of units in a condo hotel arrangement can constitute the offer and sale of securities under both federal and state law.

• Ask whether the offering was structured to comply with, or stay outside, federal securities rules, and on what basis
• Treat any written income projection or guarantee as a legal event, not a sales flourish
• For US projects, check sec.gov and investor.gov guidance with counsel; outside the US, ask which regulator covers pooled rental sales, as the Philippine SEC now does per Inquirer reporting
• Confirm dispute resolution forum and governing law

Once the documents pass this checklist, return to the buying process to finish financing and closing in order.