Are you looking to buy a unit, townhouse or apartment?
We can help protect your investment – contact our unit titles specialist, Jennifer Edwards today to set up an appointment.
5 February, 2020 | Jennifer Edwards
For example, if you’re considering buying an apartment as a long-term investment to rent out, you should know all 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.
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 usually includes common property shared between unit owners. When you buy into a unit title development, you also become part of the governing body for that space known as a ‘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, other day-to-day expenses and a long term maintenance fund. 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. Annual body corporate levies are subject to change & the possibility of rises should be factored into your purchase 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. You can access this information through Land Information New Zealand (or your lawyer can obtain a search of them for you).
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 – for example 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? We recommend you speak to your accountant on the financial aspects of your purchase.
Additional disclosure & Pre-settlement disclosure
There is additional information that you as the potential purchaser can request, this information is known as additional disclosure. This information must be provided by the vendor if requested, but the vendor does not have to provide it unless it is requested. Pre-settlement disclosure is provided prior to settlement. You can read more about the disclosure requirements, and what is included in the disclosure information by reading Buying & Selling Unit Title Properties: Disclosure Requirements
If you have any questions regarding the above, or wish to seek advice regarding buying unit title property, please contact Auckland unit titles expert, Jennifer Edwards on 09 837 6889 or at firstname.lastname@example.org
18 September, 2013 | Jennifer Edwards
24 June, 2015 | Jennifer Edwards