Interested in a condominium? Also pay attention to the reserve
Location, Location, Location: Experts advise paying particular attention to stability when buying real estate. However, when it comes to ownership apartments, there is another important factor to consider.
Looking for an ownership apartment on the market? The Verband Privater Bauherren (VPB) reports that there is increasing interest in real estate from the 1970s and 80s. One reason for this is the attractive prices. However, the VPB advises that interested parties should look closely - and besides location, building condition, and energy standard, also the existing maintenance reserve. Otherwise, the purchase can quickly turn into a financial disaster.
The reason: According to the VPB, comprehensive renovation of electrical installations, sanitary facilities, and heating systems is due at many buildings after about 50 years. Not infrequently, the insulation of the building shell and a new roof covering are also required. If the reserve, which the owners' association has built up over the years, does not suffice to pay for the measures, a special levy for the renovation may be due. Then it's up to the property owners to come up with the money.
Estimates from Experts can be helpful
It can quickly involve five- to six-figure amounts, the VPB points out. Those who have just put a lot of money on the table for the purchase and additional costs may find themselves empty-handed - and financially under pressure.
The VPB therefore advises always casting a critical eye on the building year, the condition of the entire installation, any existing modernizations, and the height of the existing maintenance reserve. An independent building expert can help with the assessment based on a site inspection and minutes of owners' meetings. Then it will be clearer what renovation costs buyers should plan for - and whether the existing reserve is sufficient or not.
- Many consumers, especially those interested in purchasing an apartment from the 1970s or 80s, should be aware of potential legal issues related to the property's real estate prices.
- Legal advisors often recommend conducting thorough research and seeking judgments from the Federal Court of Justice, especially in condominiums, to avoid unexpected financial burdens related to renovations.
- Real estate advisors suggest collaborating with an independent expert to evaluate the building condition, renovation costs, and the sufficiency of the existing maintenance reserve before purchasing an older apartment to avoid any financial disasters.
- Consumers should also consider that any special levies for renovations due to insufficient maintenance reserves may result in disputes between property owners, leading to lengthy and costly legal proceedings in the Federal Court of Justice.
