What to Consider when Buying an Apartment

Buying an apartment or maisonette is slightly different to purchasing a house, and there are a number of issues that you should consider during the viewing process.

Andrew Yates, Head of Residential property in our Chesterfield offices advises clients not to forget to ask about the following before you decide to make an offer.

Length of lease

Beware of leases with less than 85 years to run.  Naturally many buyers are reluctant to purchase shorter leases and some lenders are reluctant to lend on leases of less than 80 years.  Older leases may also contain defects which may in themselves make them unacceptable as security for a mortgage.

If the lease has more than 80 years to run, it can usually be extended at modest cost. You have to have been registered as the owner of the property for two years.  So if the lease has fewer than 83 years remaining, there is a risk that you may not be able to extend it in time, and so you should try to get the seller to extend the lease at the time of sale.

Freehold flats

Avoid freehold flats unless what is being sold is the freehold of the whole building. "Share of freehold" (which means that the freehold is shared between the flat-owners) is fine, but do bear in mind that your mortgage lender will take a mortgage over the lease only, and if the lease is not up to scratch, it will need changing.

Service charges

Usually, you will be responsible for paying towards the cost of repairs to the whole building. If it looks as if it needs works, bear that in mind when making your offer. The state of the building is usually a good guide to the efficiency of the management of the block. If the landlord is absent this can cause complications.

Ask the current tenant if they have received a notice of any proposed future works eg decoration of the communal areas and external areas.

Legal costs

Generally purchasing a leasehold flat is more expensive as you normally have service charges to pay, and fees for serving notices to comply with the lease on the landlord and sometimes deed of covenants fee, land registry compliance certificates, licenses to assign  and fees for issuing new share certificates where you are to become a member of a management company.

Make sure that your offer is made on the basis that the seller pays any costs charged by the landlord for agreeing to the sale or for preparing any papers incorporating a covenant or promise on your behalf to observe the terms of the lease.