Questions about buying an apartment?

jayjay2010

Hi All

I just have a few questions regarding buying an apartment, which I plan to do in the near future.

1) The Lease Agreement (or Deed): I can't get my head around this. So an apartment block will have a long term lease agreement, which the buyer has to sign. I know this can be in hundreds of years, but how does the buyer know exactly how long his buying lease will be and what happens when that lease runs out? And when I sell the apartment on will that Lease Agreement be renewed for the new buyer or does an apartment block have a certain amount of years in can be leased?? I'm so confused

2) The Service Charge: I understand why and how these are calculated but I have heard that if certain occupiers refuse to pay that other occupiers have to swallow to cost to make up for it. In other words, this year I could pay €1,500 service change but this figure could go up and up and up indefinitely?? Kind of sucks

3) Do you ever really ''own'' and apartment? : Ok so you buy an apartment. But what exactly do you own? You are paying a never ending service charge that can change for the better or for the worst; if the block closes down what happens to the occupier? How much are you paid to leave??

As you can see from the questions above I am in VERY early stages of buying but I need to get my head around these things before I can move on to the next step!

Thanks

the world wonders

jayjay2010 wrote: »

1) The Lease Agreement (or Deed): I can't get my head around this. So an apartment block will have a long term lease agreement, which the buyer has to sign. I know this can be in hundreds of years, but how does the buyer know exactly how long his buying lease will be and what happens when that lease runs out?

Don't worry, the apartment building will have a design lifetime of several decades so it will be obsolete and demolished long before the lease runs out.

And when I sell the apartment on will that Lease Agreement be renewed for the new buyer or does an apartment block have a certain amount of years in can be leased?? I'm so confused

The lease will automatically transfer to the new owner.

2) The Service Charge: I understand why and how these are calculated but I have heard that if certain occupiers refuse to pay that other occupiers have to swallow to cost to make up for it. In other words, this year I could pay €1,500 service change but this figure could go up and up and up indefinitely?? Kind of sucks

Yes. This is why you need to find out the financial status of the management company before you buy.

3) Do you ever really ''own'' and apartment? : Ok so you buy an apartment. But what exactly do you own? You are paying a never ending service charge that can change for the better or for the worst; if the block closes down what happens to the occupier? How much are you paid to leave??

You do not own an apartment in the same sense that you can own a house freehold. If the block "closes down" due to e.g. flooding or fire or construction defects then you and the management company should both have insurance to cover this.

the_syco

jayjay2010 wrote: »

2) The Service Charge: I understand why and how these are calculated but I have heard that if certain occupiers refuse to pay that other occupiers have to swallow to cost to make up for it. In other words, this year I could pay €1,500 service change but this figure could go up and up and up indefinitely?? Kind of sucks

If people don't pay, services get cut back. Services can range from grass cutting, to bin disposal, to the maintenance of an electric gate to the complex. Check out why the MC are; if they're the original builders, a group of landlords, a group that were voted in by the apartment owners to take care of the complex, etc.

Look into if they have a "sinking fund", and how much it is. If they don't have one, be advised that if **** hits the fan, they won't have money to fix it.

athtrasna

The Society of Chartered Surveyors of Ireland have brought out a really useful guide to the Multi Unit Development Act - I would suggest you read it.

http://www.scsi.ie/mudguide1

Also check your library for Robert Gogan's book "an essential guide to apartment living" - it may be slightly dated but it's very informative on some of the issues you may not have considered.