Rental Management

IN THIS ARTICLE:

Am I obligated to participate in the rental programme?

Owners are not required to rent their Residence. However, should you wish to enter your Residence into the Rental Program later, you will be required to ensure the Residence meets brand standards prior to the unit being accepted for rental.

Are there guarantees that the units will be rented?

There are no guarantees. As Rental Manager, The Crane will employ best practices to achieve the highest possible occupancy and revenue potential across the Resort. The location of the Residences within a historic, world-renowned resort site and the Resort’s decades of experience in short-term rentals lend the Private Residence development a very good chance for strong occupancy levels.

How will the residences be marketed?

As part of its marketing service to Residents, the Rental Manager currently engages the services of two (2) PR agencies, travel agents and online travel agencies to distribute, promote and sell the residence rental accommodation internationally. The resort also has a strong marketing department and works with a digital marketing agency to optimize the Crane website, which currently produces a significant number of the resort’s direct bookings annually.

The Rental Manager provides 20 years of experience in marketing resort bookings to support the new Residence product. The resort is partnered with over 130 tour operators globally and continues to actively visit and train international partners, maintaining excellent relationships. The Crane is consistently in the top ten (10) performers for hotel bookings in the destination with several of the largest operators, including for example Expedia, Jet Blue Getaways, and British Airways Vacations.

How does the rental manager assign rentals to residences?

The Resort reservations department rotates Residences with all others in the Rental Program, using its property management/reservations system and efforts to fairly allocate occupancy and revenue for each unit within a unit category. Of course, if a rental guest requests a specific location or view, those requests will be honoured where possible.

How will the revenue be split between the owner and the resort?

As the Owner, you will receive all the net revenue generated by your unit, less a 22% Reservation &Marketing Fee to the Rental Manager. Net Revenue is the gross revenue earned less applicable sales tax, room tax, credit card, all third-party (travel agent/tour operator) commissions, and any services provided to a rental guest as part of a promotion used to drive bookings.

How are the rental rates established?

Rental rates are determined through research and comparison of rates achieved for competitive properties in the destination and region; along with a combination of other criteria such as location, services and amenities of the facility, quality of the property and rooms, competition, market rates, seasonality, and historic data.

What rental income can I expect?

While it is in the Rental Manager’s best interest to try to achieve the highest possible rental income for all Residents in the Rental Program, it is impossible to predict future occupancy levels and rental rates for the Resort or individual Residences. In addition, there are numerous factors that will, on an ongoing basis, affect occupancy levels and rental rates; such as the level of competition and demand, international and local economic conditions, cost of travel, etc. While historical occupancy and rental information are used in determining forecast scenarios, the Rental Manager does not give any guarantees with respect to net revenues or occupancy.

When will I receive rental income?

Rental income will be credited to your Owner’s Account by the end of the fiscal month following the month in which the revenue was received. You will receive a quarterly statement of rental income and the net balance in your Owner’s Account, after deducting residence rental expenses, and this will be remitted to you upon formal written request.

Who is responsible for damage to my residence caused by a hotel guest?

As is customary in the resort industry, the Rental Manager may take whatever actions reasonably necessary against a guest who has caused damage or loss to a unit within the Resort including, for example, charge-backs to the guest’s credit card. However, if the Rental Manager cannot collect from the guest, and the damage or loss is not otherwise covered by insurance, the Owner is responsible for the loss or damage.

How will individual items be replaced in my residence when needed?

At least semi-annually, the Rental Manager will take a full inventory of all furnishings and rental accessory items within the Residence required to meet brand standards. All repairs or replacement for items will be repaired or replaced and billed by the Rental Manager, in communication with the Owner, and with prior authorization for items over the limit of your Owner’s Account. Critical items that need to be dealt with between Owner or rental visits will follow the same procedure.

When renting, how much notice do I need to give for personal usage?

While you are free to use your Residence at any time, if the unit is in the Rental Management Program, then all Owner bookings are subject to availability at the time of the request. It is recommended that Owners notify the Owner Services department as early as possible of their preferred dates for occupancy.

What happens if my residence is rented when I want to use it?

If you wish to use your Residence for a period that has already been reserved by a rental guest, every effort will be made by the Rental Manager to move the guest to another residence or unit within the Resort to make your unit available to you. However, if no other comparable units are available or the rental guest refuses to accept alternate accommodation, your reservation will not be confirmed.

If I want to be in the rental program, what agreements am I subject to?

You will enter a Rental Management Agreement with the Rental Manager. The Rental Agreement will run from January 1 to December 31st each year and may be renewed annually subject to the then-current Rental Management Agreement. The Crane reserves the right to cancel a Rental Agreement and its marketing services if, in its sole opinion, a Resident is deemed to have damaged the reputation or business of The Crane or its Residents.

Do I have to pay anything at the time I enter a rental agreement?

You will need to maintain a minimum balance of US$2000 within your Owner’s Account. This account is used to fund Residence Fees – i.e., any direct expenses for maintenance and repairs to your Residence to ensure it is kept to brand standards for rental guests. As expenses are deducted, you will be required to keep the Owner’s Account funded to at least the initial deposit amount.

What type of accounting will I receive with respect to my rental income?

Monthly, the Rental Manager will provide a statement of the rental income and Residence expenses. The net balance in your Owner’s Account will be remitted to you upon formal written request.

What are the applicable taxes on rentals in Barbados?

Owners shall comply with all local tax filing and reporting requirements in Barbados. The Rental Manager shall not be liable for any taxes payable in respect of the rental income of the Owners. We recommend you seek individual tax advice regarding the remittal of rental income to you, as personal circumstances and tax treaties differ. Whilst The Crane is not qualified to give tax advice, the general rule is that income derived or earned in Barbados is subject to tax in Barbados.

If you are resident in a country with a double taxation agreement with Barbados, then you may be able to offset the tax incurred against the tax obligation arising in your home country.

If the net rental income is being paid directly by The Crane to a non-resident individual, then the withholding tax under normal circumstances is 15% under the Income Tax Regulations Section 90A. This would be withheld on remitting the income. The payment of the withholding tax is then made to the Barbados Revenue Authority within 15 days after the end of the month in which the amount is withheld or deducted.

Will I be compensated for the loss of rental revenue in the instance that my residence becomes unavailable due to maintenance or repairs?

As rental performance is subject to various market forces such as demand, competition, seasonality, and economic factors, the Rental Manager makes no guarantees on expected returns. Consequently, compensation for potential rental income loss is neither calculable nor payable if your residence is temporarily removed from the program due to maintenance or repair works.

In instances where your residence becomes unavailable for rentals due to latent construction defects discovered within the first 12 months following handover, the developer will cover the costs of rectifying such defects.

Owners will be promptly notified by the Residence Property Manager of any maintenance or repair schedules that may affect the rental availability of their units. The process for addressing and rectifying latent construction defects will be prioritised and conducted transparently, in compliance with all applicable local building codes, safety regulations, and industry standards. Owners will be kept informed throughout the duration of the work.

What happens if my residence handover is delayed?

Your monthly Community Fee, utilities, and other carrying costs of ownership are only billable upon the official handover of your residence. Since the Rental Manager cannot guarantee rental returns, potential income loss is neither calculable nor payable in the event of a delay. The developer will strive to complete the handover as quickly as possible.