Can someone explain this to me..

jayo99

http://www.auction.co.uk/irish/LotDetails.asp?A=804&MP=24&ID=804000111&S=L&O=A

This apartment sold for 50k, however -

"The property is held on a lease for a term of 999 years from 1st March 2003 (thus having approximately 989 years unexpired) at a current ground rent of €1 per annum."

What is the point in buying a property for 50k if it only has a yearly rent of €1 ??

athtrasna

You can't own an apartment - because for example your floor may be your downstairs neighbours' ceiling - and the front walls are the belonging to both of you. So instead of getting deeds of sale, you get a long term lease, typically 1000 years and pay a nominal annual rent - in this case €1. The "owner" can rent out the apartment for any amount they want.

riclad

I THINK ground rent ,is rent charged by person who owned the land the house was built in ,its not important.
YOU BUY property for 50k, you rent it for say 500 per month ,whatever
the market rent for a house in the area.
You can live in the house ,or rent it , your solicitor may pay say 50 euro, as part of the legal process ,ie 50 years ground rent in advance.
AS far as the law is concerned,you have all the rights of any owner
of a house,
if you sell it on, the new owner will be liable for it.
its like buying a new tv,and having to pay 1cent, for the box it comes in.
i,m not a lawyer ,i suppose in theory ,the ground rent might go up in 1000 years .
by then it,ll be passed on ,in new ownership,or owned by a relation thru a will.

jayo99

not that you'd be around to find out but what happens after 1000 years (if the apartment was still around and belonged to one of your descendants) ?

athtrasna

riclad wrote: »

I THINK ground rent ,is rent charged by person who owned the land the house was built in ,its not important.
YOU BUY property for 50k, you rent it for say 500 per month ,whatever
the market rent for a house in the area.
You can live in the house ,or rent it , your solicitor may pay say 50 euro, as part of the legal process ,ie 50 years ground rent in advance.
AS far as the law is concerned,you have all the rights of any owner
of a house,
if you sell it on, the new owner will be liable for it.
its like buying a new tv,and having to pay 1cent, for the box it comes in.

You can't buy an apartment! Market rent is usually paid to the management company as part of your management fees as the management company will have taken ownership of the land the apartment was built on.

An apartment "owner" does NOT have the same general rights as a house owner - the management company (not agency) will have terms in the lease (the 999 year one) which are much more restrictive to what can be done in an apartment as opposed to a house, restrictions on satellite dishes, noise etc.

StillWaters

jayo99 wrote: »

not that you'd be around to find out but what happens after 1000 years (if the apartment was still around and belonged to one of your descendants) ?

In theorey the property reverts back to the person who owns the freehold. In practice this doesn't happen. Leasehold houses can buy out their freehold cheaply, for something like 20xground rent.

jayo99

Thanks for the info guys..