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Purchasing an Apartment

Purchasing an Apartment should be a relatively straight-forward process whether you are an investor or first time buyer. However, regardless of the type of buyer that you are, you should seek the advice of your Solicitor as soon as possible to ensure that you avoid any pitfalls associated with the purchase.

Purchasing an Apartment

There are several matters that a buyer should take into account before a final decision is made to purchase the apartment and a legally binding Contract is entered into with the Vendor.

Firstly the main distinction between purchasing a house and an apartment is that an apartment owner does not own the "freehold" to the property but owns the "leashold" of the property. All apartments are sold under the same Lease and therefore all apartment owners hold the legal ownership to the property on the same conditions as all the other apartment owners and which is distinct from the "common areas" of the complex which are owned by the Management Company. This form of ownership ensures uniformity as regards the use of the common areas of the building and the individual units of the apartment complex. The Management Company is responsible for enforcement of the rules of management of the development and all apartment owners are obliged to adhere to the rules.

While the financing of the purchase is foremost on the minds of Purchasers there are other issues to consider when purchasing an apartment:

The type of Development.
A prudent buyer should ascertain if the type of the development is suitable to their needs. Obviously, an Investor's requirements will differ from that of an Owner occupier. If the apartment complex is in the advanced stages of construction or completed, the type of development will be evident. However, builders may insert a condition into the Contract for Sale indicating that they reserve the right to change the layout of the development or the type of units .

Planning Matters

If you have decided to purchase an apartment in a particular area, you should attend the Local Planning Office in order to carry out a Planning Search as regards the surrounding areas and thereby ensure that there are no planning matters in the area which might adversely affect the value of the property or your decision to purchase the property. What may appear to be undeveloped ground maybe be the subject of a planning application for a residential housing or an adjoining apartment development.

Buying Off Plan.

In recent years buying off plan became quite a common way of purchasing an apartment in this country. In such a case you don't have the opportunity to inspect the property prior to putting a legally binding Contract in place with the Builder and therefore are relying on brochures plans and specifications as regards what the finished product will look like. A buyer should be aware that the Contract for Sale may include a clause that allows the builder to vary the estate layout , the classification of the units or the finishings within the apartment as advertised in the sales brochure.

Management Company
A Management Company is the legal entity responsible for managing and maintaining the common areas of the development i.e. the hallways, green areas and car park spaces. If you purchase an apartment in a complex you automatically become a member of the Management Company. Each apartment owner must pay an annual service charge to cover the costs of maintenance and upkeep of the common areas. All apartment owners in the complex are bound to pay the annual service charge and adhere to the Management Company rules as regards the running of the apartment complex. So too are Tenants in the event that the apartment owner is a Landlord as opposed to an owner occupier. It is crucial that the Management Company is not struck off the Register of Companies for reasons including failure to file annual returns on time. If this occurs an apartment owner will not be in a position to sell their property until such time as the Management Company is restored to the Register of Companies. A Company restoration is a costly process and may take some time to complete.

A Balcony

Normally the balcony is not conveyed to the Purchaser, instead the purchaser is granted a licence to use the balcony. The use of the balcony by the apartment Owners or Tenants is restricted to the permitted uses allowed as per the terms of the Lease Agreement with the Builder i.e., as set out in the title documentation.

A Car Park Space.

A similar scenario applies to car park spaces in an apartment complex. An apartment owner will be granted a right to occupy and use a car park space subject to the terms of the Lease or a Licence.

Roof top Gardens and Courtyard

As the gardens and courtyard fall within the common areas the apartment owners will be bound to the permitted use of the gardens and courtyard as set out in the title documentation.

State of Condition of the Apartment Building

In an established complex it is important to check that the building appears to be maintained and in a good state of repair. What may seem like wear and tear on facilities such as a security gate or an out-of-order lift may lead to a substantial cost to repair and therefore an added expenditure which will have to be discharged out of the sinking fund of the Management Company. By contrast in a new apartment complex the annual service charge for the first few years will be somewhat lower owing to the fact that wear and tear will not arise for a few years however thereafter it may increase in accordance with the costs of carrying out the maintenance and upkeep of the complex.

For further information, please contact Malcomson Law by calling 01 8744422 or complete an Online Enquiry Form. A solicitor who specialises in Conveyancing will contact you to assist you with your apartment buying needs.

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