Buying a resort residence involves two separate transactions that are easy to conflate: the purchase of the property, and the lease of that property to an operator. Each needs its own scrutiny.
On the property. Verify the title chain and confirm the land-use classification permits commercial or hospitality development. In Uttarakhand, land purchase by non-domiciles is subject to statutory restrictions, and the applicable position should be confirmed with a local advocate before any payment is made. Check that the project carries a valid Government Approved registration and that the registration covers the specific phase and unit you are buying. Ask for the approved building plan, the completion or occupancy certificate where the structure is complete, and confirmation that statutory dues are clear.
On the lease. Establish who the counterparty actually is — the resort brand, or a separate operating company. Confirm the tenure, the lock-in, the escalation clause, the payment schedule, and the remedy available to you if payments stop. Check whether the lease is registered, since an unregistered long-term lease offers materially weaker protection. Establish who bears refurbishment costs, and what happens to the arrangement if the operator changes.
On the numbers. Any indicative figure you are shown is a projection until it appears in an executed deed. Ask for the deed itself, not a brochure summary of it. Have a chartered accountant confirm the tax treatment of lease income in your hands.
None of this is a reason to avoid the asset class. It is simply the diligence any commercial contract of this size deserves.
On the property. Verify the title chain and confirm the land-use classification permits commercial or hospitality development. In Uttarakhand, land purchase by non-domiciles is subject to statutory restrictions, and the applicable position should be confirmed with a local advocate before any payment is made. Check that the project carries a valid Government Approved registration and that the registration covers the specific phase and unit you are buying. Ask for the approved building plan, the completion or occupancy certificate where the structure is complete, and confirmation that statutory dues are clear.
On the lease. Establish who the counterparty actually is — the resort brand, or a separate operating company. Confirm the tenure, the lock-in, the escalation clause, the payment schedule, and the remedy available to you if payments stop. Check whether the lease is registered, since an unregistered long-term lease offers materially weaker protection. Establish who bears refurbishment costs, and what happens to the arrangement if the operator changes.
On the numbers. Any indicative figure you are shown is a projection until it appears in an executed deed. Ask for the deed itself, not a brochure summary of it. Have a chartered accountant confirm the tax treatment of lease income in your hands.
None of this is a reason to avoid the asset class. It is simply the diligence any commercial contract of this size deserves.