Phase 2

BAW4.2Whistler property comes with a lot of rules. When you buy a Phase 1 or Phase 2 property, the Resort Municipality of Whistler (RMOW) places a restrictive covenant on the title of the property you buy.  This covenant contains the restrictions around the usage of the property.

Whistler’s Covenants Matter To Investors

Phase 1 Covenant – Stipulates that when a unit is not in use by the Owner, the property must be made available to the public for rental and be placed in a “rental pool.”

Phase 2 Covenant –  Stipulates that these units must be placed in a rental pool, and has added restrictions. The owner’s usage is restricted to a total of 56 days per year; 28 days during the winter and 28 days during the summer.  In return for making a unit available to a project, owners are to receive a share of project revenue.

Sometimes in Phase 2 covenants there are other terms.  In the project we invested in, Nita Lake Lodge, the covenant states that units should be managed by a single “Rental Booking System.”

This term is defined as an “arrangement administered by a single manager or operator to provide for the orderly and assured management of reservations and use of Units by the Public and the Unit Owner.”  The purpose of this covenant, we are told, is to ensure that there are adequate services when rooms are made available to Whistler visitors.  One would assume that the RMOW would have an obvious interest in governing its own covenant to ensure its integrity of purpose.

The Covenants are the RMOW’s – It’s Their Job To Administer Themh

On the surface these covenants seems both reasonable and logical in order to provide the best guest experience.  But, as with any rule, covenants can be used by skillful investors who rely on the RMOW’s inaction.

Anticipating this possibility, the covenants themselves leave it to the RMOW’s discretion how the covenants should or should not be used – and it is the wise use of this discretion that investors and guests depend on.  The covenants make it clear that the RMOW has the power and the responsibility to effectively administer the covenants.  Our covenant, for example says:

“Release of Units: Notwithstanding anything in this Covenant contained, the Covenantee [the RMOW] may by resolution of its council, upon request in writing, consent to release any Unit or portion of the Lands from any or all of the restrictions set out in Section 2 and Section 4 either fully or for stipulated periods of time.”

This means that in cases where managers are using the covenant to justify extreme and objectionable conduct, the RMOW can provide relief to others whom the manager is attempting to coerce.  All the City Council needs to do is to take a vote for a temporary hold on the covenant – a straightforward administrative matter.

But The RMOW Doesn’t Act

We asked the RMOW to apply the provision above – temporarily and in light of the manager’s conduct.  We explained what had happened at this project and noted that other investors in Phase II projects would expect the RMOW to prudently exercise its discretion in such circumstances.  Otherwise managers could use the covenant as a basis to force owners to accept unsavory behavior, permanently reduced revenue, no prospects for resale, and no access to their own property.

The RMOW understands these dangers to this project.  But despite its obvious ability to act, the RMOW appears to be intimidated by the investor/manager.

In case this experience should strike you as an isolated case, keep in mind that nearly 5000 units in Whistler are Phase 2 projects with these covenants.  Here are others:

  • AlpenGlow
  • Blackcomb Lodge
  • Clocktower
  • Coast Blackcomb Suites
  • Crystal Lodge
  • Delta Whistler Village Suites
  • Executive Inn
  • Fairmont Chateau Whistler
  • Four Seasons Resort Whistler
  • Holiday Inn Sunspree
  • Horstman House
  • Listel Whistler Hotel
  • Mountainside Lodge
  • Nancy Greene Lodge
  • Nita Lake Lodge
  • Pan Pacific Lodge Mountainside
  • Pan Pacific Lodge Village
  • Pinnacle International Hotel
  • Summit Lodge and Spa
  • Sundial Boutique Hotel
  • Village Gatehouse
  • Westin Resort and Spa
  • Whistler Cascade Lodge
  • Whistler Village Center
  • Whistler Village Inn & Suites
  • Whistlerview

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