The Management Agreement is between the Wallaroo Shores Resort Management Pty Ltd and Group. This agreement is for a term of 20 years.
Who is the Tenant?
Wallaroo Shores Resort Management will be the tenant of your Townhouse under a lease from the date you complete your purchase for a 20-year term.
How does the leaseback work?
As the owner of a 4-Star Resort Townhouse, you will be the Landlord under a 20-year lease with an annual return equivalent to a minimum of 5% of your total purchase price. The rent increases with CPI annually and capital growth through market rent reviews every 5 years. The market rent, cannot be set lower than that payable in the previous period.
When do I get paid?
Your rent is paid monthly in arrears. It begins from the date you complete your Land Purchase Contract.
Do I have to pay council rates?
No. council rates, management fees, operating costs and standard body corporate levies are paid by the tenant.
Are there any other costs I must pay?
You only pay land tax. All water rates, electricity, etc. are all paid by the tenant.
What about furnishings?
Your Townhouse will be furnished and maintained (interior and exterior) at no cost to you, including all appliances. Even all refurbishments, replacements and upgrades are paid for by the tenant.
What am I buying?
You will be the registered owner of a community title (registered with the South Australian Land Titles Office) with two car parks on the lot and a 2-storey or single-storey all accessible Townhouse (basically, a house and land package).
How safe is the investment?
Your ownership is registered with the South Australian Government Land Titles Office. The lease agreement with the tenant is also registered. A cash bond equivalent to 6 months’ rent will be held in a solicitor’s trust account under the terms of the lease for the full term of 20 years.
What happens at the end of the 20-year lease agreement?
At the end of the lease term, unless renewed, the lease will cease. At that time, as owner of the Townhouse you will be free to enter whatever arrangements are in your best interests to maximise your investment. This includes entering into a new lease, a management agreement with a rental agent or a sale of your Townhouse.
Possible termination of the Lease after 15 years?
Although the Lease is for a term of 20 years, if at any time after 15 years from the commercial opening of the Resort an offer is made to each Townhouse owner to purchase all Townhouses in the Resort for the purpose of constructing a multi storey building or buildings on the Resort site, all owners must accept the offers, if:
In the opinion of an independent valuer, those offers are fair and reasonable (but in any case, not less that the contract purchase price of your Townhouse); and
The members of the Community Corporation pass a special resolution at a meeting of the Community Title Corporation (i.e. owners with 75% or more of the entitlements in the Community Corporation vote in favour).
Then at completion of all those sales, the Lease will come to an end.
Can I sell during the lease term?
Yes, you are free to sell your 4-Star Resort Package at any time. If you sell your Resort Package, your rights under the lease transfers to the buyer(s). The new owners will continue to be entitled to the annual return for the remainder of the lease.
Can I live in my townhouse?
No. The Townhouse can only be used for short-term tourist accommodation not residential purposes.
Can I stay in my townhouse?
During the lease period (unless the owner is a superfund) you can enjoy a stay at Wallaroo Shores Resort for 7 nights each year (subject to availability). This accommodation is at no cost to you, however you will be charged a room cleaning fee and for any additional services or goods that you use. If you wish to stay longer or more often than the 7 nights stay, your accommodation cost will be subject to rates at Wallaroo Shores Resort.
Do I pay stamp duty on the purchase?
No, stamp duty because land at the Wallaroo Shores Resort is considered “Qualified Land” and is exempt from stamp duty.
