[godtabh]

I put a booking deposit on a new apartment a couple of weeks ago.

The apartment is still under construction and literally only has the foundation just poured.

I'm going to sign the contract on Wednesday and was just wondering does any one have any advice on what I should look out for and what should I ask to put in?

The only thing I'm worried about is a closing date i.e when I can move in. I've worked many apartment jobs that have run over time but I've never been on the other side of slow contractors.

[antoinolachtnai]

Well, if you want legal advice, you should ask your solicitor. You do have one, right? You shouldn't sign a binding contract for property without one.

You obviously know more than most about the construction business. The reality is that there is never a guarantee as to exactly when a building will be ready to occupy, and no builder will guarantee anything other than a very pessimistic date.

You don't get to 'put things in'. Unfortunately this is a seller's market. The developer dictates the terms, not you. If you aren't happy with it, you walk away.

[godtabh]

Originally Posted by antoinolachtnai

Well, if you want legal advice, you should ask your solicitor. You do have one, right? You shouldn't sign a binding contract for property without one.

You obviously know more than most about the construction business. The reality is that there is never a guarantee as to exactly when a building will be ready to occupy, and no builder will guarantee anything other than a very pessimistic date.

You don't get to 'put things in'. Unfortunately this is a seller's market. The developer dictates the terms, not you. If you aren't happy with it, you walk away.

I have a solicitor but I want to know what questions to ask him.

[lomb]

what the number of years lease on the unit is-this depends in turn on what the developer has in terms of title and what hes willing to grant, hopefully its more than 100 years although some are quite short..

what the closing date is, what the interest rate is if u dont close on the closing date, what the signing contract deposit is, are the common areas and recreation areas marked and whether u have legal title to use them. whether u have a right to be a member of the management company and what the developers responsibility is in handing over the units to the management company is.all this is in the draught lease which he SHOULD have given u a copy of imho. u should know what u are signing in advance.

thats pretty much it, main thing is title, closing date, penalty interest rate for late closing, and anything else the solicitor thinks is relevent.

[godtabh]

Originally Posted by lomb

what the number of years lease on the unit is-this depends in turn on what the developer has in terms of title and what hes willing to grant, hopefully its more than 100 years although some are quite short..

what the closing date is, what the interest rate is if u dont close on the closing date, what the signing contract deposit is, are the common areas and recreation areas marked and whether u have legal title to use them. whether u have a right to be a member of the management company and what the developers responsibility is in handing over the units to the management company is.all this is in the draught lease which he SHOULD have given u a copy of imho. u should know what u are signing in advance.

thats pretty much it, main thing is title, closing date, penalty interest rate for late closing, and anything else the solicitor thinks is relevent.

How does the number of years of the lease effect me?

How likely is the is the developer going to accept penalities if they are late from closing date?

What do you mean about being a memebr of the management company and why wouldnt you be allowed to join the management company?

Also why would I recieve a draft lease? I'm buying the apartment so I was expecting a contract for purchase.

[lomb]

Originally Posted by kearnsr

How does the number of years of the lease effect me?

How likely is the is the developer going to accept penalities if they are late from closing date?

What do you mean about being a memebr of the management company and why wouldnt you be allowed to join the management company?

Also why would I recieve a draft lease? I'm buying the apartment so I was expecting a contract for purchase.

first things first, because u are buying an apartment , a communal property on shared ground,u are not the owner of the property, and never will be, u are buying an interest in the unit u have chosen, an interest governed by the fresh issue of a long term lease usually 999 years at a very low annual rent like 10 euro a year. if the developer doesnt own the freehold of the land but owns a long lease of 50 years he cannot give u what he does not own so can only give u what he has like a 50 year interest.

at the end of the lease term ur interest finishes and the property reverts to the freeholder.

in the issue of a new lease, u need to see this lease and accept it. many terms are standard but u should know what u are signing.

u will not be able to get the developer to accept penaltys inhis late closing, not a prayer to be honest, they have 28days to close from the date a completion notice is issued anyway so u can issue a completion notice the next day after the closing date if he is late closing.

the contract u sign is irrelevent except the closing date, and interest rate,and its the draught lease that accompanies it thats important.when u sign contraact one of the terms in it is u accept the draught lease.

my advice is dont stall the sale or they might reneg on the deal in these boom times.

[Conor74]

Originally Posted by lomb

thats pretty much it, main thing is title, closing date, penalty interest rate for late closing, and anything else the solicitor thinks is relevent.

???

Title? If your Solicitor isn't going to make sure you get good and marketable title, then frankly I don't know where to start. Plus the interest rate is only relevant in about 1 in every few hundred transactions - surely you don't plan on defaulting on the contract at this stage? And if it's a new builkding in the course of construction, you won't get a closing date, merely a completion period within which the house must be completed.

The most important things to ask are (i) what checks you have to carry out yourself ie. engineer survey on completed structure, planning checks etc. (ii) go through the finance pack with your Solicitor and make sure you can comply with all the bank's requirements (iii) if it's an apartment, what are the covenants and conditions - get a full extract from the lease (iv) what is the initial management company fee and what percentage are you responsible for afterwards (v) are there stage payments (vi) is there a car park space or merely a licence to use an area (vii) is the property covered by HomeBond or a similar guarantee scheme.

[antoinolachtnai]

the other thing is to find out whether there is any way for you to sell on your interest before the closing.

At the end of the day, there is really not much you can do though. You end up having to take the solicitor's word for it that everything is OK. Your only other comfort is that you aren't in this alone - the bank, which is also represented in the transaction by your solicitor also has to be happy that the title is sound. There are standard forms blessed by the Law Society's conveyancing committee that govern all of this.

You won't be talking about draft leases. This is an actual contract that you are going in there to sign.

Short leases are not necessarily such a bad thing. The reality is that the building will probably need to be rebuilt or stripped out in 100 years time and it might be more practical to clear everybody out at that point rather than waiting for the building to be condemned. (I hope you live long enough to run into this issue.) You generally own a share of the freehold or the very long leasehold through the management company so you don't lose all your interest at that point.

Best of luck with your new home!

[Conor74]

Originally Posted by antoinolachtnai

the other thing is to find out whether there is any way for you to sell on your interest before the closing.

Good questoin alright.

That could be relevant for someone looking to make a quick buck, though in most cases now developers put in a clause stating that the contract cannot be assigned without their consent - they just HATE seeing the punter make a few quid!

[Conor74]

Originally Posted by lomb

if the developer doesnt own the freehold of the land but owns a long lease of 50 years he cannot give u what he does not own so can only give u what he has like a 50 year interest.

at the end of the lease term ur interest finishes and the property reverts to the freeholder.

Nonsense. The freehold reverts to the management company. They purchase the common areas and freehold reversion as standard in all apartment developments. You don't think the builders hang around for 999 years waiting to pick up the property again, do you? Or that someone buys it off them to benefit their great great great (repeat to the power of 16) grandchildren?

As for 50 year leases, believe you me if a Solicitor buys a 50 year lease for you you have an open and shut case of negligence against him.

[lomb]

Originally Posted by Conor74

???

Title? If your Solicitor isn't going to make sure you get good and marketable title, then frankly I don't know where to start.

ud b surprised, and the bank will loan for 35 year leases but prefer 50, u may need even know ur kids may get nothing, and the solicitor will be retired or dead by then, know what u sign, get a copy of everything and read it urself, its YOUR money.

[lomb]

Originally Posted by Conor74

Nonsense. The freehold reverts to the management company. They purchase the common areas and freehold reversion as standard in all apartment developments. You don't think the builders hag around for 999 years waiting to pick up the property again, do you? Or that someone buys it off them to benefit their great great great (repeat to the power of 16) grandchildren?

As for 50 year leases, believe you me if a Solicitor buys a 50 year lease for you you have an open and shut case of negligence against him.

the freehold only reverts if the developer lets it under the terms of the draught lease or if he has a freehold to begin with. how can he let it revert to the management company if he doesnt own it?

and 50 years is not negligence, i have talked to a solicitor and it happens, the banks will loan for it, no ones any the wiser

[Conor74]

Originally Posted by lomb

the freehold only reverts if the developer lets it under the terms of the draught lease or if he has a freehold to begin with. how can he let it revert to the management company if he doesnt own it?

But obviously if he himself has a leaese he will only be selling the reversion in that lease. It's not in the draft lease, there is a contract for sale included in most booklets of title (I say most because some developments do not have management companies of course).

Either way, do you honestly think that a builder running out of time in a lease and spending millions to develop the land thinking that all the Solicitors for the Purchasers will turn a blind eye is a common problem?

Finally, as regards 50 years, the Solicitors obligation is to ensure that the Purchaser (or more pertinantly the bank) gets 'good and marketable title'. The Law Society practice was that in the case of a leasehold this meant at least 70 years to run. Your Solicitor may be happy to certify less, I wouldn't.

Lomb, you'll give poor kearnsr high blood pressure if he thinks he has to double check the title his own Solicitor will check!

[lomb]

many developments in the city are built on leased commercial terms. its a LANDMINE area, the developer sells the development giving what he has or less.he CANNOT give u what he hasnt got.
if u say 70 yrs id believe u, i know for a fact the banks will loan on 50 so the title is 'good'

[Conor74]

Originally Posted by lomb

the banks will loan on 50 so the title is 'good'

The banks? Sure the banks don't even look at the title for standard apartment/house purchases, so how would they know? They simply rely on the undertaking given by the Solicitor. And I must say I have yet to meet the Solicitor who is happy to risk giving an undertaking in respect of a 50 year lease while at the same time forgetting to tell the client about it.