Things to consider when buying an apartment, unit or townhouse

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Buying an apartment, unit or townhouse isn’t the same as buying a residential property. Since you’re buying into a shared space, it’s worth spending the extra time to consider if this type of property is suited to your needs.

For example, if you’re considering buying an apartment as a long-term investment to rent out, you should know all of the running costs involved. Or perhaps you’re a pet-owner but the building has a no-pet rule for residents.  These are all factors that can have a huge influence over your purchasing decision – so be aware before you sign.

Term to know – ‘unit title’
When you consider buying an apartment, unit or townhouse – you’re considering buying a ‘unit title.’ A unit title is an area of land that has been subdivided into multiple units, such as apartments, and includes common property shared between unit owners. When you buy into a unit title development, you also become apart of the governing body for that space known as a ‘body corporate.’

Getting to know your body corporate
A body corporate consists of the unit owners and often additional members that are contracted to perform services on behalf of the unit owners. A body corporate will charge all unit owners an annual levy to be put towards maintenance, repair fees, administration and other day-to-day expenses. They will ultimately be responsible for deciding where the money is spent. Factoring in the cost of your annual body corporate levy should be an important consideration in your buying decision.

The body corporate will also set rules for the apartment which all owners must abide by. These are mostly common sense rules of courtesy such as, not leaving rubbish around or not hanging your washing on the outside of the building. Other rules might be more specific such as preventing residents from having pets, limiting guest stays or even the length of your grass.

Before signing an agreement
Before signing an agreement for sale and purchase to buy a unit title property, you should have been given a pre-contract disclosure statement by either the owner or the agent. This document sets out important information about the property – such as how much the body corporate levy is each year, whether this is going to increase for the next year, what maintenance for the building if any is planned for the future, and whether there have been any weather tightness claims (i.e, leaking apartments) recorded. These issues should be important in your decision to buy. Ask yourself: is this property going to be a good investment? Will it provide a good return? Will it be a good first home? Will it be hassle-free?

Other information
There will be other information that must be given to you by the seller prior to settling a purchase.

If you have any questions regarding the above, or wish to seek advice regarding buying unit title property, please contact  Auckland unit titles expert, Dawn Fullam on 837 6883 or at dawn.fullam@smithpartners.co.nz