SEC OKs Damosa Land ‘condotel’ rental pool program
The Securities and Exchange Commission (SEC) has given the green light for the P5.2-million rental pool program of Damosa Land Inc., making it the first company to register under the new guidelines for real estate securities registration.
Damosa Land’s registration statement covered 100 certificates of participation in the condotel project of TRYP by Wyndham Samal in Davao del Norte province.
These are 94 standard class units at P50,000 each, four deluxe class units at P75,000 each and two suite class units at P100,000 each.
The project in Barangay Limao is expected to be launched in the fourth quarter of this year, with completion slated for the third quarter of 2028.
Under rental pool arrangements, buyers acquire units that are collectively managed by the developer or a third-party operator. In return, buyers receive a share of income earned from renting out the units.
This way, there will be no need to transfer ownership of the unit.
Under the SEC’s Memorandum Circular No. 12 Series of 2024, rental pool agreements are investment contracts and, therefore, securities that need to be registered with the commission before being offered to the public.
The memorandum covers investment contracts, certificates of participation, profit-sharing agreements and other forms of securities issued by real estate developers in relation to rental pool agreements, such as condotels.
Analysts earlier warned that condotels, a portmanteau of the words “condominium” and “hotel,” may become pricier due to the new regulation.
According to them, property firms will have to go through the full process for registering securities and pay for associated SEC fees and other costs that may be passed on to buyers.
Still, they also recognized that buyers consider the potential returns high enough to take a risk and invest.
Consunji-led DMCI Homes and DoubleDragon Corp., through Hotel101, are among the developers currently offering rental pool arrangements.
