Apartments require special consideration before purchasing. We look at why and recommend steps to invest carefully.
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The special concerns of apartment dwellers include:
Before you buy, research the market to make sure you are getting value for money. Talk to independent valuers and real estate agents, and check recent sales in the area. Don’t rely on advice from the developer or their agent. This is particularly important if you are buying off the plans. You want to know that the value of the finished apartment will reflect at least what you paid.
As most apartment complexes are built by developers, it is good practice to check the background of the developer, the architect or designer and the builders employed by the developer. Find out if there have been any problems with other developments these people have been involved in. Warning signs include bankruptcy or court action. Look into the financials of the developer for assurance they have the financial backing to complete the development. This is especially important if you are buying off the plans, because if the developer goes under and is unable to start or complete the building, you could lose any money you’ve paid.
A developer may be liable to prosecution for selling or allowing the purchaser to take possession of a unit prior to obtaining a Code Compliance Certificate (CCC). Check with your solicitor. Some developers may try to get around this by inserting a clause into the sale and purchase agreement that commits you to purchase or take possession of the unit prior to the developer obtaining the CCC. If this clause is contracted out of, it must be done using the prescribed form.
Have an independent person look at the plans and get an assurance from the developer that what is on the plans is what you are getting. And find out if the developer has the necessary resource and building consents before you pay anything.
If you decide to go ahead with the purchase of an existing apartment have a property inspection done.
When you request a property inspection, ask for these issues to be especially noted:
These items, and a complete survey of other common property areas, would require a special-purpose property report.
You can also check the records of the body corporate or company records but these won’t necessarily disclose all defects, or major future expenditure.
You need to be confident there are no weathertightness problems either now or potentially in the future. Check with your local council, body corporate records or other owners. Ensure that the person inspecting the property for you is able to identify signs of repair or signs of future problems. See leaky buildings for more information.
Find out if you will be liable to contribute to defects in areas other than the actual unit you purchase. If so, it is a good idea to examine all those areas, even if this means examining all the individual apartments.
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