News & Insights: Property

Apartment living

4 June 2019

More and more people are purchasing apartments for numerous reasons. People are attracted to the inner-city locations of apartment blocks and for the perceived lifestyle and financial benefits. However, there are additional factors to consider when considering an apartment purchase. This article will give a brief overview of some of these considerations.

The main difference between owning an apartment and a house is that an apartment shares the main building structure and facilities with other the apartments. Apartment owners typically own their apartment only; the structure of the apartment block and the common areas including hallways, stairs and lifts are owned and managed by a management company.

The management company is usually made up of apartment owners and each apartment owner will own a share in the company. The management company typically appoints a management agent to deal with the day to day running of the apartment building and common areas. The management company will publish accounts every year and hold annual meetings to discuss the accounts and the general management of the apartment block. All apartment owners are invited to the meetings and should be provided with copies of the annual accounts.

Prior to the purchase of an apartment, you should ascertain the identity and structure of the management company, if there are management agents involved, the amount service charge payable per year and the responsibilities you will have in respect of the management company. You should also establish if there is a sinking fund. A sinking fund is a fund held by the management company for potential future expenses; usually for expensive repairs to the apartment block. Your conveyancing solicitor will discuss these matters with you prior to the completion your purchase.

The title for apartments is leasehold. The original lease under which the apartment is held will be for a set term of years and there will be various covenants all apartment owners must adhere to. These include keeping the apartment in good repair and paying your service charge. However, these covenants can be quite restrictive and can stop you from owning household pets, playing music after a certain time of night and completing works in the apartment.  Again, your conveyancing solicitor will discuss this with you.

To conclude, there are numerous factors to consider prior to an apartment purchase and you should speak to your solicitor in detail about these matters before completing your purchase.

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