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Buying an apartment is different to buying a house

here's why

Buying an apartment in Ireland is very different to buying a house. This is because when you buy a house you typically acquire a freehold interest in the property, whereas when you purchase an apartment, you are usually only acquiring a long leasehold interest.

An apartment will also form part of a complex/development and it will be necessary to be familiar with how the management company is managing the complex before you buy.

In general, the following are the main provisions which you should be aware of before purchasing an apartment:

  1. Title

As referred to above, the underlying title to the apartment will be a long lease rather than a freehold title. These leases are typically for 999 years and is the main title deed for the apartment. The lease will contain a number of terms and conditions and covenants which will always continue to affect the apartment and which you will be required to comply with as the owner of the apartment. It may seem an obvious point, but it is always vital for a purchaser’s solicitor to investigate what the covenants and conditions in the lease are, and to inform the purchaser of them.

With a leasehold title the concern for a purchaser is always that the covenants and conditions have been complied with. This is because failure to comply with the covenants and conditions is a breach of the terms of the lease and would enable the landlord to take action to force compliance. In theory a landlord could seek to forfeit the lease, but in the case of a residential dwelling house held on foot of a long lease, it is highly unlikely that a court would grant such a remedy.

The landlord’s interest in the lease will typically be assigned/transferred to the management company who will enforce any breaches of the covenants in the lease. The purpose of the covenants in the lease is to ensure that the apartment complex operates correctly and that all apartments are consistence – for example, there will usually be a requirement for all apartments to be the same colour, have the same type of windows etc.

2. Common Areas

The common areas include all the amenity areas in the development, the halls, the bin storage, the car park etc. In all new apartment developments, the ownership of the common areas is to be transferred by the developer to the management company once all the apartments have been sold.

The management company will be required to maintain and repair the common areas and the cost of doing this is recouped from the individual apartment owners through the service charge. This brings me on nicely to my next point.

3. Service Charge

It will usually be a provision of the apartment lease that you pay a service charge to the management company. Before purchasing, it is important to ask how much it will cost in monthly/annual service charge fees. Prior to closing your solicitor will ensure that an up-to-date receipt for the payment of the service charge is provided by the vendor's solicitor.

As part of the purchase of the apartment, you will be provided with the financial accounts of the management company which will show its financial health. As part of this, a figure for the amount of monies in a “sinking fund” will be provided. A sinking fund is put in place by the management company to cover any major repairs that may arise in the development from time-to-time i.e., roof repairs, lift replacement etc.

As a purchaser, you will need to satisfy yourself that the level of monies in that account is sufficient to cover any major repairs that can crop up from time to time in a development. Should the apartment complex require major repairs and the monies in the sinking fund is not enough, each apartment owner will be required to pay the excess over and above what is in the sinking fund.  

4. Building insurance

If you buy a leasehold apartment, the apartment development will have what is known as “block insurance”. This policy will be held by the owner of the freehold or the management company of the building and will cover the entire development against things like fire, flood or storm damage. This policy does not cover the contents of your family and you should take out contents insurance separately to cover your apartment contents. The cost of the insurance premium is usually covered in the service charge paid annually.


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  6. Property Chains - Buying and Selling Simultaneously 


We have extensive experience in dealing with all matters relating to buying and selling residential apartments. If you are looking to speak with an experienced solicitor, then please get in touch today for a no obligation quote.

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