When it comes to managing a condo hotel, a well-written management agreement is essential. This agreement serves as a roadmap for the hotel`s operations, outlining the responsibilities of both the owner and the management company.
In a condo hotel, the units are individually owned and operated as hotel rooms. The management company is responsible for overseeing the day-to-day operations of the hotel, including housekeeping, maintenance, guest services, and marketing.
The management agreement should clearly define the roles and responsibilities of the management company, including their obligations to maintain the property, provide adequate staffing, and manage reservations and rates. Additionally, the agreement should outline the owner`s responsibilities, such as maintaining the individual units, paying association fees and taxes, and providing adequate insurance coverage.
One critical aspect of a management agreement is the revenue-sharing arrangement. Typically, the management company will take a percentage of the hotel`s revenue in exchange for their services. The agreement should specify the percentage and any additional fees or commissions the management company may receive.
It`s also essential to include provisions for termination or renewal of the agreement. The agreement should outline the circumstances under which either party can terminate the contract, as well as the notice required before termination. Additionally, the agreement should provide options for renewal and any necessary negotiation for updated terms.
Finally, it`s crucial to include clauses related to legal issues, such as compliance with local laws and regulations, indemnification, and dispute resolution.
In summary, a thorough and well-crafted management agreement is essential for the successful operation of a condo hotel. It sets expectations for both the owner and management company, outlines the revenue-sharing arrangement, and ensures compliance with legal requirements. By taking the time to draft a comprehensive agreement, both parties can enter into a mutually beneficial relationship built on transparency, trust, and communication.