Lots of people dream of owning their own flat. Unlike a house, you do not buy a flat as sole owner, but acquire leasehold ownership. But what exactly is this and what are your rights and obligations?
Home ownership is still extremely popular and demand for property remains high, despite rising mortgage interest rates. Leasehold ownership is a particularly popular type of housing that also enables younger people to buy their own home. In contrast to a detached house, a flat is always cheaper and easier to finance. But what should you pay particular attention to when planning to buy a flat?
In legal terms, leasehold ownership is a special kind of co-ownership. Unlike conventional co-ownership, leasehold owners also have special rights to their own flat and other parts of the building, such as an underground parking space or the basement, for example. These special rights allow them to exclusively use specified parts of the building.
All other areas are in communal ownership and can be shared by the co-owners wherever possible. This may include outdoor parking spaces, stairwells, lifts or gardens, for example. When buying a flat, you also always acquire co-ownership of the land, building and facades. This means that decisions regarding refurbishments or extensions are always made by the owners’ association and the costs are shared by all parties based on their allocated value. The allocated value depends on the size of the flat and is specified per thousand.
If you want to buy a flat, you should consider a few other important aspects, in addition to its condition and purchase price.
Every leasehold property has house rules governing the cohabitation of all residents. All owners are bound by these rules. So you should read these carefully and clarify any outstanding questions immediately. Because if, for example, the house rules state that keeping dogs is not allowed, everyone has to comply with this.
Find out about your future neighbours, because unlike a rented flat, in the case of leasehold property, you are bound together in the medium to long term. Just as with a rented flat, you are also obliged to comply with the house rules and, for example, keep noise to a minimum.
All costs for repairing or replacing communal areas are to be shared. Your contribution will be determined based on your allocated value. So prior to purchase, ask for the minutes of previous owners’ association meetings and pay close attention to what was agreed. If a refurbishment is due to take place after you have exchanged contracts, you will have to contribute to the costs.
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Or do you already own a property that you would like to rent out or sell? Our property consultants will be happy to help. Please feel free to contact us by phone or email, or pop into your local Engel & Völkers shop. We look forward to assisting you.