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Pool Rental

Broad Principles of Operation of the Rental Pool Background and Legal Framework

The tourism industry in Mauritius is well established. Villa rental in Mauritius is a relatively new industry and units on offer range from individual "bungalows" to exclusive villas attached and operated by 5-star hotels.

The more exclusive the tourism offering, the better the revenue generation potential becomes for the promoters and for the country and the better also becomes the volume and quality of employment generation. It is therefore imperative that Mauritius maintains and grows its 5-star plus exclusive tourism offering, and this can only happen through professional management and effective regulation of the industry - including regulation to ensure the orderly marketing and management of villa rentals.

The Mauritian legal framework strictly regulates IRS developers - regulations include the attachment of stringent conditions to EIA licenses, minimum pricing of villas and apartments and numerous restrictions on building characteristics. The legal framework also obliges IRS companies to take responsibility for the orderly setting up and management of rental pools and obliges any rental of villas in an IRS scheme to be undertaken through the IRS company.

Interests of the "Villas Valriche" Rental Pool

The rental pool for "Villas Valriche" is being set up on a "not for profit" basis by the developer, and control of the operation of the rental pool will eventually be passed to villa owners, who will contract a commercial operator to operate the rental pool in the best interests of the villa owners. The remuneration of the operator will be linked to the revenue and profitability of the rental pool - a formula that has been proved to be highly successful for the hotel industry in Mauritius. The objective is to create a vehicle that will be trusted, used and eventually managed by villa owners in their own interests.

Principle of Revenue and Cost Sharing

Principles central to any rental pool are:
  • the equitable sharing of revenue and cost based on periodic evaluations performed by an independent entity;
  • the independent management of the revenue and cost pools by a commercial operator appointed by the villa owners to act in their common interest.
Rating of Villas

A base charge-out rate for each villa will be determined by the appointed independent entity, and will be influenced by a number of factors, including:
  • the location of the villa in the development and the views enjoyed from the villa;
  • the size of the villa and plot;
  • he quality of the finish and decor of the villa;
  • the season.
The independent entity will also determine whether or not a villa is in a suitable state to be made available to the rental pool.

Availability of Villas

Each villa owner will periodically declare in advance the periods in the future during which the owner's villa will be made available to the rental pool. The owner is not obliged to make his/her villa available to the rental pool, but the villa may not be occupied for the purposes of rental during the periods when the owner has declared it unavailable, and regulations will be put in place to monitor and control access to villas in order to administer these regulations.

Revenue Pools and the Formula for Revenue Sharing

All revenue from the rental of any villa will be collected by the manager. A daily share of revenue for each villa will be determined by the manager, based on the availability of each villa on that day and also based on the base charge out rate of each villa relative to the others in the pool for that day.

Cost Sharing

Costs associated with the operation of the rental pool will be split into two categories, namely:
  • Costs specifically related to occupation of the each villa, which will vary depending upon the number of days in a year the manager lets each individual villa. Generally, these costs will be incurred by the manager and deducted from the pooled revenue and would relate to preparation and cleaning of villas for occupation by tenants/ guests and to interior and exterior repairs directly related to occupation. Individual villas will also be allocated a "wear and tear allowance" for each day that their villas were used by the rental pool in order to fund periodic refurbishment and redecoration. This category of costs will typically also incorporate a factor which caters for the relative costs associated occupying and maintaining villas of different sizes;
  • Costs that are general in nature and relate to marketing and also to the administration of the rental pool. These costs will be incurred by the manager and deducted from the pooled revenue.
Rules and Regulations

Rules and regulations based on international best practice will be established by the developer for the orderly operation of the rental pool, including regulations regarding the permitted levels of occupation by villas being rented.