From the Owner, Dr. James Rota:

Your friends will say, “But you don’t own the land.” “What if the land is sold to a developer?” “Why is there only a rental agreement between the Point Dume Club owners and the homeowners?” Why is a home in the Point Dume Club a good investment? Let’s explore this further:

NO PROPERTY TAX

With the present value of the homes in the area, it is much less expensive to pay the space rent than it is to pay property taxes. The space rent also provides for the utility infrastructure, 24-hour security guards, swimming pool, tennis courts, all-sports court, dog run, sauna, Jacuzzi, billiard room, poker room, use of the clubhouse house for large events, which contains a stage, full kitchen, big screen television, piano, etc.

The only annual tax I pay on the home is a $53 registration fee to HCD.

FURTHER TAX DEDUCTIONS

After purchasing your home here, and living here for as long as you desire, if you have the inclination to sell the house, you can deduct all of the monthly space rents you have paid against the profit of selling the house.  This is an expense to keep the home maintained.  Well, that can really add up to a nice deduction at tax time.

Why is there only a rental agreement between the Point Dume Club owners and the homeowners?

There is no existing lease between the homeowners and the park owners, but there is a standard rental agreement. The owners of the park have owned land in Malibu for several generations, and they continue to have significant holdings in the area. They have no plans of selling the property, as this is a very lucrative situation for them. In fact, the owners live in the Point Dume Club. I know the family personally, and the daughter manages the park. Also, for any new owners to buy out all of the individual homeowners, it would be cost-prohibitive for them to do so.

In the unlikely event that the park owners were to express interest in selling, then the homeowners have the first right of refusal to purchase the land.

Also, the space rent is rent controlled by the City of Malibu. If there were a lease agreement with a definite time frame (currently, there is only a rental agreement), then there would be no rent control in effect. So it is to our advantage not to have a lease agreement.

What if the land is sold to a developer?

Malibu is required to supply a certain amount of “affordable housing” so it is only zoned for its present occupation. Malibu would lose Federal and State funding sources if they were to re-zone this land.

Even the Bank Gets It.

With all of these factors in mind, people invest large sums of money into their homes knowing that they aren’t going anywhere. Community West Bank is a lender for many of the homes, and they feel very comfortable about the situation as it is. If you like, I can put you in touch with the Vice President, and he would be happy to discuss with you why they don’t see any problems with making large loans on the homes in the Point Dume Club.

I have lived in the Point Dume Club for over 20 years and have never hesitated about the idea that I don’t own the land. With the present value of the homes in the area, it is much less expensive to pay the space rent than it is to pay property taxes.

Thank you for your interest in my home. Please contact me if you have any further questions.

Dr. James Rota