BUYING GUIDE RESIDENCES AT CRVENA LUKA HOTEL & RESORT

BUYING GUIDE RESIDENCES AT CRVENA LUKA HOTEL & RESORT

table of CONTENTS 01 ABOUT THE RESORT 4 What is Crvena Luka Hotel & Resort? 5 What amenities are offered at Crvena Luka Hotel & Resort? 5 Dining 5 Wellness & Spa 5 Sport & Fitness 5 Conference Hall 5 Boat Dock 5 Parking 5 Other services 5 Are there activities for children? 5 Who is the owner of Crvena Luka Hotel & Resort? 02 ABOUT RESIDENCES AND LOCATION 6 What is interesting to see outside of resort? 6 Where is the nearest international airport? 03 PROPERTY MANAGEMENT 8 Who is responsible for management of the resort? 8 Who is taking care of my residence while I am not using it? 8 What are my costs? 8 How much is property management fee? 9 What is included in property management fee? 9 How my residence will be maintained? 9 Which cost is not included in property management fee? 9 How much is tourist tax and why do I have to pay it? 9 How much is departure cleaning fee? 9 Who is taking the risk of damage or destruction of my residence or objects within my residence? 04 RENTAL MODELS AND OWNERS USAGE 10 What kind of rental programme is available? 10 Can I choose not to rent out my residence? 10 How often my residence will be rented? 10 When will I get a report about rental activity? 10 When do I receive revenue from renting of my residence? 10 How rental rates are set? 10 If I choose second model of sharing 50%, when can I use my residence? 10 Who is renting out my residence? 11 Can I leave my personal items in my residence during my absence? 11 Can my friends and family use my residence? 05 THE ADVANTAGES OF OWNERSHIP 12 What kind of advantages have I as an owner of residence? 06 PURCHASE PROCESS 14 What is the process of buying real estate in Croatia? 15 What is OIB? 15 In which currency can I purchase a real estate in Croatia? 15 Can I get a bank mortgage in Croatia? 15 Which documentation do I need to purchase real estate in Croatia? 15 What is the property transfer tax in Croatia? 15 If I wish to resell my residence, can I do it? 15 What are the prices of Crvena Luka Residences? 15 What is included in the residential price? 15 Why should I purchase a residence at Crvena Luka Hotel & Resort?

01 ABOUT THE RESORT What is Crvena Luka Hotel & Resort? Crvena Luka Hotel & Resort is a unique blend of rich natural surroundings and modern design on the Adriatic coast. The tourist tradition of Crvena Luka Hotel & Resort began in 1960. In 2013 it was completely renovated into a four star resort that represents a fusion of modern design and lush Mediterranean nature nested in a hidden sandy cove of the Adriatic coast. It is situated on an exclusive location, only 3 km away from the town of Biograd na Moru, surrounded by centuries old pine trees, beautiful walking trails, including a unique sandy beach which is a perfect destination for those who want to enjoy peace and privacy, but still be close to a variety of social events. Crvena Luka Hotel & Resort is comprised of 69 comfortable hotel rooms, 31 spacious hotel suites (standard apartments), 46 superior apartments and 20 luxury furnished and modern designed villas. Crvena Luka Hotel & Resort is the first in the Zadar region to be awarded with the prestige emblem White Flag International - global environmental symbol for clean water surfaces. This unique bay is one of the cleanest spots in the Adriatic. What amenities are offered at Crvena Luka Hotel & Resort? The Resort offers a beautiful sandy beach with sunbathing platforms, sun loungers and parasols. Dining Enjoying the culinary delights of the main restaurants Il Dodge, à la Carte restaurant Il Moro and pizzeria & bistro Mamma Rosa. Additionally, there is also a beach bar Movida, Movie bar, Roof top bar Il Moro and Icecram shop with homemade ice-cream. Wellness & Spa Visiting the Spa Centre Energy Clinic you can step in a heated indoor swimming pool or relax in a Turkish bath, Finnish sauna or relax zone. Try the variety of treatments in one of the massage rooms, or soothing massage in the shade of pine trees and the hum of waves. A fitness and cardio room are also part of the resort wellness program. Sport & Fitness The extensive sport and fitness facilities include outdoor and indoor swimming pools with fresh water, outdoor and indoor fitness zone, aquatic sports, scuba diving, mini golf course, multi purpose court for volleyball, football and tennis, table tennis, bocce court, jogging paths, chess square, bikes, boats and kayaks. Conference Hall A multi-functional conference hall with all the resort leisure and dining facilities is an ideal setting for all the events private or corporate. The conference business will contribute to generate the rental income to residence owners. Residential Sales Office An on-site sales centre is located in the central part of the resort next to the Movie bar and Ice-cream shop and offers a preview of the waterfront residences that are available for sale. You can speak first-hand to one of our professional Sales Representatives who will provide you with information about how you can become owner of exclusive Residence at Crvena Luka Hotel & Resort. Boat Dock The Resort has a boat transfer dock for visiting boats and a collection point for day trips. As a residential owner you can keep your boat on the resort dock while staying at your residence (subject to availability and pre-booking according to the current pricelist). Parking There are four extensive parking lots within the resort for all resort guests. Other services Renting a boat for a sailing or transfers, 24-hour security, reception service, free Wi-Fi, exchange office, ATM, Sat TV. Are there activities for children? Besides the natural sandy shallow bay that is like a gigantic kid s pool, there is a Kids Club, which is a friend to guests with children providing children with an exciting venue to make new friends. An outdoor children s playground is situated in a park above a small sandy beach. Who is the owner of Crvena Luka Hotel & Resort? Crvena Luka Hotel & Resort is owned by Crvena Luka d.d. (Joint Stock Company). The company owner is the Prodi family from Italy. 4 5

02 ABOUT RESIDENCES AND LOCATION What are the Residences at Crvena Luka Hotel & Resort? Hidden away in a private sandy bay and surrounded by pine trees, the Residences are spread out along sandy beach with views over the beach or pine forest and less then 10 metres away from the shoreline. Decorated in a minimalistic modern style all Residences are fully equipped with modern Italian furniture including fullyfitted open plan kitchen and dining areas with modern appliances, spacious en suite bathrooms with heated floors, rain shower systems, living areas, comfortable furnishing, spacious bedrooms and terraces. Their smart room system provides economic energy consumption, air conditioning control and supervision of all the functions and alarms. Where is the nearest international airport? Nearest international airport is airport Zemunik in Zadar which is 30km away from resort. Split and Zagreb international airports are also flying options. The Residences at Crvena Luka Hotel & Resort comprise of 45 apartments and 20 villas with two or four bedrooms. Apartments net useful area is in range from 76.66 square metres to 82.19 square metres or gross size from 104 to 110 square metres. Net useful area of villas is in range between 68.97 square meters to 252.82 square metres or gross size between 95 square metres and 313.15 square metres. What is interesting to see outside of resort? In a close vicinity of Crvena Luka Hotel & Resort there are four national parks, all worth of visiting: Plitvice Lakes National Park, Krka National Park, Kornati National Park and Paklenica National Park. Horseback riding, bird watching or 50km bike trail are offered at Lake Vrana Nature Park. Historical tours of Zadar, Šibenik, Split and Trogir are a must see. 6 7

03 PROPERTY MANAGEMENT Who is responsible for management of the resort? Crvena Luka Hotel & Resort is operated by Crvena Luka d.d. Who is taking care of my residence while I am not using it? When you or your guests are not using your residence, management company Crvena Luka d.d. will take care of your residence. What are my costs? The owners are obligated to pay a property management monthly fee for the general costs and services. Individual costs for electric energy and water consumption spent in each residence is paid separatelly. How much is property management fee? The owners participate in the general costs through common maintenance reserve. The fee is calculated for each year based on the actual costs for the previous year. For previous year (2017) the fee was 2.45 per square meter of net usable surface per month. What is included in property management fee? The property management fee includes following: Security surveillance, Gardening grass cutting, fertilization, irrigation, flowers and plants, equipment, Regular external maintenance of all common surfaces roads, tracks, pathways, parking lots, Managing the outdoor swimming pool, External illumination, Cleaning and purging draining systems, Water purification, Purification of wastewaters and waste disposal, Beach cleaning and beach equipment, Deratisation and general treatments wasps, mosquistos, flies etc., Exclusive concession for the beach and the bay area, Insurance damage, theft, arson, civil liability, Emergency repairs of heating and cooling systems, WiFi, TV, telecommunications, electroinstalations, security systems, Regular annual inspection of each residence to identify the maintenance needed, Replacing all light bulbs when required, Minor touch-up painting when required, Unclogging toilets and drains when required, Inspection and cleaning of all vents and filters and replacing filters as needed, Replacing standard plastic electrical wall plate covers, drain plugs, shower heads, when required, Re-hanging towel racks or other attached wall items, Inspection of all appliances. Administration costs. How my residence will be maintained? The maintenance includes all your maintenance requests and annual preventive inspections. Quick and efficient response to maintenance requests is our main objective. Once you notify the front desk, the request is electronically dispached and our team responds within minutes. Which cost is not included in property management fee? Property management fee does not include consumption of electric energy and water within your residence, tourist tax for your stay and a departure cleaning fee. How much is tourist tax and why do I have to pay it? Tourist tax is imposed on all visitors to the country and paid to the tourist board to maintain a high standard of service. This tax is 1 EUR per person per day and 0.50 EUR for kids up to 12 years old. How much is departure cleaning fee? A departure cleaning is required after your stay to make sure the unit is clean for the next arrival. Fee is 50 to 70 EUR depending on the size of residence. This includes the changing of linens, towels, trash removal, vacuuming, dusting and cleaning of all surfaces and appliances. You are also responsabile for any items that undergo wear and tear. A mid-stay cleaning is optional and can be arranged, for a fee, by contacting our front desk. Who is taking the risk of damage or destruction of my residence or objects within my residence? If any damage or destruction should occur within your residence while it is rented to the guests, you as an owner should bear the cost of repairing it. 8 9

04 RENTAL MODELS AND OWNERS USAGE What kind of rental programme is available? Crvena Luka Hotel & Resort is offering two attractive renting models through which you will have the opportunity to generate revenue from your property when you are not using it, which will help to offset the cost of ownership. First model is guaranteed rental income of 4 %. By choosing this model you agree to rent out your property to our guests from 1st of May until 31st of October and the remaining parts of the year you are free to use your property. Second model is share of 50% of total rental income earned during the rental period by your choice. This model gives you the possibility to use your residence when you want and how long you want and when you are not using it, we will rent it to our guests. You just need to provide the information of yearly schedule on when you or your family members will be using the residence. Remaining 50% goes to Crvena Luka Hotel & Resort to cover various expenses (tourist agency fee, marketing, housekeeping, administrative costs, stuff). Can I choose not to rent out my residence? Yes, you as an owner are deciding if you want to rent out your residence or not. How often my residence will be rented? The average occupancy for the standard rental period at the Crvena Luka Hotel & Resort is currently 52.29% and has been growing in the past years. Our standard rental period takes into account occupancy of 90%, the highest during peak of the season in July and August, and more quiet during shoulder seasons. When will I get a report about rental activity? At the beginning of every year you will receive a yearly statement for the last year from the property manager detailing all the rental activity for your residence. The statement will show the amount of rental income. When do I receive revenue from renting of my residence? The rental revenue will be paid within 30 days from the date of submission of the yearly statement. How rental rates are set? Rental rates are set according to the views towards the sea or park, and will be seasonally adjusted to maximise rental income. If I choose second model of sharing 50%, when can I use my residence? You can use your residence whenever suits you the best. However, you need to complete an owner usage calender for our reservations team in January every year. This will allow us to promote and fill your residence to maximum occupancy. As all dates booked according to the owner usage calender are guaranteed, we ask you to plan cautiously and if necessary, cancel according to the cancellation guidelines of 14 days in shoulder season and 30 days in peak season. If you wish to request a reservation that it is not indicated on your usage calender, you may do so 3 days prior to your expected arrival date at which time your reservation request is subject to the residential availability. Who is renting out my residence? All residences are professionally marketed and operated by Crvena Luka Hotel & Resort. Can I leave my personal items in my residence during my absence? You can leave your personal items in your residence. However, if you want your residence to be rented out and choose one of the rental models, you can store your personal items in lockable closet in a hallway of your residence. Can my friends and family use my residence? Your friends and family can use your residence. You just need to provide their names to our front desk personnel prior to their arrival and indicate whether the departure clean and tourist tax will be charged to them or to you. If you choose second rental model, you should also indicate the dates of their usage while completing the owner usage calendar. 10 11

05 THE ADVANTAGES OF OWNERSHIP What kind of advantages have I as an owner of residence? An owner can use all resort amenities and has following advantages: Access to Energy Clinic Spa & Wellness Centre, Access to all resort restaurants and bars, Usage of all sport fields (subject to availability and pre-booking), Complimentary use of outdoor fitness area, Convenient in-resort beach access, Usage of sunbathing platforms, sun loungers, parasols and outdoor showers, Complimentary use of outdoor and indoor swimming pools, Complimentary use of kids playground and park, Reception service, Open-air parking, High-speed internet access, Boat transfer dock, 24 hour security, Services of phone central. Food consumption in restaurants and bars, SPA treatments, usage of all sport fields and phone central services will be charged according to the Crvena Luka Hotel & Resort privileged pricelist for the residential owners (10% discounts will be applied). 12 13

06 PURCHASE PROCESS What is the process of buying real estate in Croatia? European Union citizens can freely buy real estate in Croatia and register it in their name. The possibility for non-eu citizens to purchase property in their personal name depends on the Reciprocal Agreement between Croatia and the country of origin. However, there are two choices while buying the real estate in Croatia: either as a private individual or setting up a legal entity that will own and operate the real estate. There are advantages and disadvantages of each method depending on the buyer s tax situation and the use of the property. Generally, legal entity is more suited for buying property that will be included in a rental programme. Crvena Luka Sales Representative will provide support through each step in the purchase process. The following are the purchasing steps that are fully depending on your choice of buying the residence as a private individual or through legal entity. STEPS BUYING AS A PRIVATE INDIVIDUAL BUYING THROUGH LEGAL ENTITY 1. Select the residence Select the residence 2. Decide on renting programme Decide on renting programme 3. Review purchasing documents Review purchasing documents and loan application, if applicable 4. Obtain personal identification number (OIB) Obtain personal identification number (OIB) 5. Sign the purchasing documents; Purchase Agreement needs to be notarized by public notary 6. Transfer the funds to pay the purchase price 7. Register your name at ownership papers 8. Public notary will submit the Purchase Agreement at the tax office for Tax Assessment. Sign the Pre-contract Agreement and pay 10% of purchase price Setting up legal entity (you can give POA to the accountant to open it for you) Sign the purchase agreement as soon as company is registered Transfer the funds to your company bank account and pay the remaining purchase price 9. Register your company name at ownership papers 10. 11. Public notary will submit the Purchase Agreement at the tax office for Tax Assessment Establish agreement with bookkeeping company for record keeping. What is OIB? OIB is permanent national identification number of every Croatian citizen and legal persons domiciled in the Republic of Croatia. Request for receiving the OIB is filled at the Tax Administration Office. In which currency can I purchase a real estate in Croatia? All transactions for the purchase of real estate in Croatia must legally be in Croatian currency (Kuna). The prices for Crvena Luka residences are stated in Euros, which we believe allows better understanding. Can I get a bank mortgage in Croatia? Privredna Bank Zagreb has created a special mortgagefinancing package for buyers of the Crvena Luka residences. However, this is valid only for Croatians and for legal entities opened in Croatia. Crvena Luka Sales Representative will provide contact details of bank representative when needed. Which documentation do I need to purchase real estate in Croatia? Passport or personal identity card is documentation needed. What is the property transfer tax in Croatia? When buying a residence in Crvena Luka, the buyer pays the property transfer tax of 4%. If the buyer is a legal entity, the reverse charge mechanism can be applied. If I wish to resell my residence, can I do it? If you as the owner wish to resell your residence you can do so immediately. Every new buyer must agree on the same conditions and honor the same agreements. However, according to the purchase contract Crvena Luka d.d. has the right of first refusal. What are the prices of Crvena Luka Residences? Prices for two-bedroom residences range from 199,000 for a ground floor residence with a park view to 299,000 for residences with premium sea views. Two- and three- bedroom villa range from 299,000 and up to 529,000, all with premium sea views. Exclusive four- bedroom villa Zumbul on the edge of the bay is 1,8 mil EUR. These prices are subject to change, please contact the Sales Representative realestate@crvena-luka.hr What is included in the residential price? Price for the residence include fully furnished residence decorated in a minimalistic modern style and equipped with modern Italian furniture including fully-fitted open plan kitchen and dining areas with modern appliances and cutlery, spacious en suite bathrooms with heated floors, rain shower systems, living areas, spacious bedrooms and terraces. Smart room system provides economic energy consumption, air conditioning control and supervision of all the functions and alarms. Every owner of Crvena Luka residence has available two parking lots at the resort parkings. Why should I purchase a residence at Crvena Luka Hotel & Resort? Crvena Luka Residences provides you as the owner with the opportunity of ownership first line to the sea within one of the cleanest, secluded, sandy bay on the Adriatic coast. The owners of residences at Crvena Luka Hotel & Resort can use all the services and amenities within resort and in the same time have concern-free property. You as an owner can enjoy your residence throughout the year and have the peace of mind of knowing that it is being professionally managed and cared for while you are not in residence yourselves. 14 15