Leaky apartment costly issue

An increase in the number of apartment sales has prompted a Tauranga law firm to urge people to do their homework.

The advice comes from Lyon O'Neale Arnold director Mike O'Neale, as many Mount Maunganui multi-rise properties face leaky building issues.

Nick Earl (left) and Mike O'Neale.

And some apartment owners could find themselves hundreds of thousands of dollars out of pocket.

Apartments are governed by the Unit Titles Act 2010, under which apartment owners must pay a proportional share of maintenance and repairs, explains Mike, who specialises in property law.

The Act applies to nearly all multi-rise properties and some larger single-level developments.

'When buying an apartment, you should be clear on your proportion of outgoings,” he says.

'For instance, a unit at the top of an apartment block may be worth twice that of a ground-floor apartment, with double the price-tag for any maintenance and repairs, even if they have the same size floor plate.”

Mike says an exclusive apartment at the Mount can command annual levies of $10,000 and upwards. Special levies to remedy leak issues can amount to over $200,000.

'Failing to read the fine print and failing to understand the governing structure of apartment living can lead to financial and emotional strife further down the line,” he adds.

'A surprising number of people sign property contracts before their lawyers have seen them. If you want to avoid getting into trouble, take the contract to your lawyer before you sign it.”

‘Weather-tightness' is just one thing to consider when looking at buying an apartment, adds Mike. People should also make sure they understand the rules of occupation and how they are enforced.

'When you purchase an apartment,” he says, 'you become part of the ‘body corporate' and, in the larger developments, a committee and chairperson are elected.

'The rules, which cover everything from reroofing and repainting, to noise levels and where the rubbish bins are kept and who arranges for them to be emptied, must be adhered to by all apartment owners.

'The rules can run to many pages and require careful thought.”

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