Buying An Apartment Is Differfent From Buying A House. | South ...

Buying a flat as opposed to a house is different. There are quite a few of reasons why buying a flat is different to buying a house. These are typically because you buy a flat under a ?leasehold? agreement. A leasehold agreement essentially means that you buy the flat, but have to abide by the freeholder?s rules and regulations, which include clauses on how costs for maintenance and repairs as well as insurance are applicable if you become the owner.

So before you make an offer on a flat, it is important to read the leasehold agreement ? or make sure a legal company reads it for you and explains the key clauses. For example, some leasehold agreements don?t let you keep pets, even a hamster! Some don?t allow you to put down laminate or wooden flooring. Others don?t allow you to let a room or even you?re flat out to someone else.

One of the important differences between buying a house and flat is that when you buy a flat, you buy it to live in for a length of time - this is the length of the leasehold agreement. When leasehold agreements were initialy ?sold? a large number of them were for 99 years. If the leasehold length time remaining is less than 80 years at present or when you come to sell it, you (or your future buyer) may not be able to get a mortgage to buy it. This means that at 99 years, the flat may be worth ?150,000, but at 80 years, it might only be worth ?100,000 as only a cash buyer can buy it. Looking into the possibility of a lease extension is always a good idea if you find yourself in this position. For advice on how to do this please click here

It is vital when you buy a flat to understand how much the service charge is now, how much it will be over the next 3-5 years and what ?big jobs? are needed to update the flat. For instance, you don?t want to buy a flat and then find out you have to pay out ?20,000 on major works that are required on the building. The service charge can be rather costly, for example from ?50 per month to ?200 or more, depending on how ?exclusive? your apartment or flat is!
You also need to find out what the ground rent is. This is typically to cover any costs to maintain or upgrade the car park, communal grounds. It isn?t usually very expensive, perhaps ?100 to ?500 a year, but can still add to the running costs of your flat.

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Posted under Need help buying or renting?

Source: http://southjerseyrealestateagent.com/?p=10531

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