All the best on of­fer and tips for in­vest­ing

Alpine News - - Front Page - BY DAN FLYNN Part­ner Tress Cox Lawyers

ADDING an alpine property to your in­vest­ment port­fo­lio is an at­trac­tive con­cept. With high rental re­turns and guar­an­teed ac­com­mo­da­tion for you, your fam­ily and friends. To help you make the most in­formed de­ci­sion, here are our top tips when pur­chas­ing alpine property.

1 Method of Own­er­ship

There are var­i­ous types of property avail­able in the alpine re­sorts, the most com­mon be­ing pri­vate apart­ments, man­aged apart­ments and club mem­ber­ships.

A com­mon form of own­er­ship is through a com­pany with a share­hold­ing ar­range­ment where own­er­ship of shares is linked with a sub-lease of an apart­ment. As a share­holder you are a mem­ber of the lessee com­pany with rights of in­volve­ment in the man­age­ment and care­tak­ing of the build­ings and im­prove­ments.

The share and sub­lease is your ‘ti­tle’ to own­er­ship and in many cases, you may reg­is­ter that in­ter­est at the rel­e­vant Of­fice of Ti­tles.

You should be clear as to the method of own­er­ship and seek ap­pro­pri­ate le­gal ad­vice where there are any con­cerns.

2 Length of Lease

The vast ma­jor­ity of in­ter­ests in Alpine land come in the form of long term crown leases. The Crown re­tains own­er­ship of the land, but leases it out for long pe­ri­ods, usu­ally 50 years or more. When you pur­chase an in­ter­est in Alpine land un­der a crown lease, you are pur­chas­ing a sub­lease in­ter­est for the re­main­der of that crown lease. While the crown lease is likely to be re­newed and the build­ing will re­main, there may be a re­quire­ment to up­grade the build­ing be­fore a lease is re­newed.

Be sure to con­firm the end date of the crown lease and fac­tor the age and con­di­tion of the build­ing into your cal­cu­la­tions.

3 Per­mit­ted Use

Do you want to use the property for per­sonal use, rental re­turns or a com­bi­na­tion of both? Some prop­er­ties have com­pul­sory man­age­ment and let­ting agree­ments, some al­low com­bi­na­tions and some are sim­ply own your own. We sug­gest you look for a com­bi­na­tion with the right to re­serve the premises for your own pur­poses if you so de­cide. Alpine apart­ments can pro­vide great rental re­turns dur­ing and out­side of the snow sea­son.

If a com­pul­sory man­age­ment agree­ment is re­quired, check for over­all man­age­ment fees, and whether these are in­clu­sive of third party agents and sup­pli­ers.

Use of a property as a commercial en­ter­prise such as a cafe will likely be re­stricted by the terms of the lease. Look for commercial ar­range­ments and ten­ure to suit your busi­ness pro­posal or project. There are re­stric­tions that may need to be ne­go­ti­ated to con­duct busi­ness op­er­a­tions within the re­sorts and ski field ar­eas.

4 Fitout of apart­ment

Is the property fit­ted out and sold with all the mod­ern con­ve­niences? Most prop­er­ties in an alpine re­sort are sold on a ‘walk in/walk out’ ba­sis with all the mod-cons pro­vided. Hav­ing fur­ni­ture de­liv­ered to the property can be dif­fi­cult dur­ing the snow sea­son.

Be care­ful to en­sure that a de­tailed in­ven­tory is in­cluded in the con­tract and check the con­di­tion of items at the time of sign­ing the con­tract. These items should be in the same work­able con­di­tion on set­tle­ment, fair wear and tear ex­cepted.

5 Fi­nance

Be­fore buy­ing any property you must al­ways be sure of your fi­nance. The type of leasehold ar­range­ment for alpine property has a sig­nif­i­cant im­pact on whether banks are pre­pared to lend. Reg­is­tra­tion of alpine leases has made ac­ces­si­bil­ity to fi­nance more read­ily avail­able.

There are nu­mer­ous meth­ods of struc­tur­ing fi­nance and this needs to be ex­am­ined depend­ing on your use of the premises and your fi­nan­cial cir­cum­stances.

The alpine re­sorts present won­der­ful life­style and busi­ness op­por­tu­ni­ties with the re­sorts con­tribut­ing over $1.5 bil­lion to the Aus­tralian econ­omy an­nu­ally.

TressCox Lawyers are able to help and ad­vise with any of your pro­posed alpine in­ter­ests and trans­ac­tions.

PHOTO: is­tock, Benedek

FU­TURE IN­VEST­MENT: Seek­ing the right le­gal ad­vice when buy­ing alpine prop­erty is an ab­so­lute must.

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