Maxed out 

A Comedy of Errors: Part IV


So, if you've paid any attention over the past three weeks - and I'd like to personally thank both of you who have - you have at least a passing grasp of the difference between condo hotels and real hotels. Congratulations. This is considerably more than some local hoteliers, and their murky ownership structure, had back in the mid-1990s.

The Comedy of Errors began when they, and there's no reason to get into personalities here, began to bleat like sheep about an unlevel playing field. Just as an aside, whenever a businessperson cries about leveling the playing field, what he's really saying is, "tilt the damn thing in my favour." They protested to the province that condo hotels had an advantage because the individual strata-title owners paid residential taxes. Blinded by dollar signs - and perhaps the "influence" of lobbyists - the provincial tax assessment authorities agreed and, presto, suddenly the suckers who'd bought condos were reassessed at commercial rates and began paying twice as much tax.

Of course, the RMOW reaped a windfall in their property taxes when that happened. Oddly, they didn't protest that change.

But the condo owners did. It was the final straw.

They banded together, overcoming one of their inherent weaknesses: isolation. They appealed the assessment. They lost. But in losing, language was employed suggesting the concept of "commercial" rested on the fact that one management company "ran" the property like a hotel. It was stated that if a certain percentage of the owners weren't managed by that company, the whole commercial tax classification would fall apart.

Having already made one foolish decision, the condo owners weren't anxious to make another. Thus begat the proliferation of equally over-priced property management companies. By opting out of the existing management contract and going with another company, owners could successfully get their taxes rolled back into the residential class.

Problem was, the front desk at most properties was its own strata, often retained by the developer because it was a highly-coveted, not to mention lucrative, piece of property. Not surprisingly, self-interest being the only kind of interest many people are capable of, the property management company who leased the front desk wasn't willing to share the space with other property management companies. So what's an unsuspecting guest to do? Where does she check in when the suite she rented by phone or otherwise doesn't have a front desk presence on the property?

Thus begat the guests' confusion at check-in time. Thus begat an early RMOW bylaw mandating a monopoly position for property management companies on any new condo projects.

Fast forward to more recent times. The province more or less reversed itself a few years back and reclassified most of the condo hotels back to residential. The muni took a $2.4-million hit, as memory serves, and all our property taxes shot up to shore up the shortfall. Inadvertently, the concept of multiple property managers at each condo hotel became enshrined not just in practice, but in the tax code itself. And the ugly reality of mercilessly confused guests trying to check in became increasingly well known.

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