When a motel business is sold by way of assignment of the lease, normal commercial practice is that the landlord/lessor must consent to such assignment to the purchaser. (Often the lessor will have first right of refusal to purchase the business or take up the residual of the lease, however that is a separate matter and is dealt with separately.)
What should be expected?
Many current motel leases include a provision for a maintenance fund (sometimes referred to as a repair account), however the application of this fund and what it can be used for, can sometimes be misunderstood.
There is no "one size fits all" commentary for this subject, there will always be variables however most commonly the following would apply.
At the time of preparing this article, we are in the grips of the winter season and the weather that it brings. Also it seems, the Winter of Discontent in terms of the economy and its immediate outlook. Accommodation providers have enjoyed excellent post Covid recovery, however this winter is proving to be a little more challenging, so just now certainly doesn’t seem to be the right time to be suggesting an increase in room rates. Nonetheless, we believe that the accommodation industry is poised for good times ahead for a number of reasons.
The intention of this article is to provide a brief overview of the operation of Management Rights in New Zealand. There are many variables in the way these businesses operate, and it is beyond the scope of these notes to cover all of those. Suffice to say, that Management Rights have been operating in Australia for many years, often on a smaller scale, (many by expat Kiwis), but also on a large scale by publicly listed companies.
Why Would I Sell A Freehold Property And Buy A Lease?
Welcome to the Occasional Coffeys Newsletter for April 2024. We celebrate 40 years of involvement in this industry for the writer, discuss the market, review the Coffeys Motel Industry Benchmarking Survey results, social housing and banks. Thanks for taking the time to read it.
Comments relating to some earlier versions of Motel Leases
