With housing transactions, it is worth examining carefully not only the apartment itself, but also the condition of the housing association.
For first-time home buyers, the situation is new, and not all buyers may know what all should be clarified.
According to Jenni Hupl, the General Counsel of the Real Estate Association, the property certificate and the articles of association of the housing company in particular should be examined.
- It must be remembered that when buying a housing share, not only the walls are bought, but shares in the company.
Must review, find out and be aware of the overall situation.
Not just the apartment but the whole company.
1. Property Management Certificate
You can find out the situation of a housing association from the property manager's certificate.
- It tells more about the condition of the property: what renovations have been made and what decisions have been made.
According to Hupl, a good housing company is one in which the maintenance of the property is planned and which fulfills its obligations in advance.
The board of the housing association should present a maintenance report that identifies significant repair needs over the next five years.
A fitness assessment by a professional is an important aid so that it is not just an assessment.
- There are companies where no maintenance needs report can be found and a condition assessment has not been commissioned.
The buyer of the apartment should also take into account the size of the housing association.
In the case of a small, ie a few-apartment condominium, the condominium may not receive a loan for the company's renovations.
Then you have to have the means to pay yourself.
The property certificate also shows whether the previous owner of the apartment has defaulted on the consideration.
The new owner is responsible for the total amount of compensation for the month of transfer of ownership and the previous five months.
A small consideration may in some cases be an alarm signal and by no means a good reason to buy an apartment.
- You should seriously stop to think if the Care Consideration is small.
According to Hupl, a small Care Consideration is not alarming if the housing association owns apartments or commercial premises from which it receives rental income.
This is clear from the property certificate.
But if there is no explanation for the small consideration, it may in practice be that the condition of the property is being run down and the need for repairs is becoming too great.
2. Articles of Association
According to Hupl, the articles of association in particular are often left unexamined by homebuyers.
However, there is relevant information on, for example, rights and obligations attached to shares, such as consideration bases, which may be exceptional.
It is clear from the Articles of Association what is the space under shareholder control, ie whether the apartment includes, for example, a parking space or a basement closet.
The consideration basis may have remained considerably higher than it should actually be if, for example, the purpose of the space has been changed, ie the apartment has previously been a business premises.
An essential issue in the Articles of Association is also the redemption clause.
It may come as a surprise to some first-time home buyers that after a home sale, they may still lose their home if the housing association or a shareholder in the company wants to redeem the home.
While it will not be a financial loss, it will still be a hassle.
The Articles of Association also show if the company prohibits, for example, smoking or short-term accommodation and rental activities.
3. Plot and zoning
If the property is located on a rental plot, the home buyer should find out how much of the plot’s rental time is left.
- If the end of the lease is approaching, the housing association must negotiate a new agreement.
If the rent for the plot has been low, especially in growth centers, there is a risk that the rent will multiply.
If the plot of land of the housing association is large, the housing association may give up part of its rental plot and thus reduce the rent.
The zoning situation in the area is worth checking, especially for those for whom the house environment and area are an important purchase criterion.
The landscape around it may change if additional or supplementary construction is planned in the vicinity.
- You should check if there are any pending formula changes and if they have an effect on the target.
4. Financial statements and annual report
It is worth looking at the housing company's financial statements and annual report, at least by reviewing the company's income and expenses as a whole.
They show, for example, how the housing association has used the consideration.
It is a good idea for a condominium to have some surplus in consideration so that it has a buffer for unexpected expenses.
During the Corona period, housing companies have been allowed to temporarily postpone general meetings, which is why the most recent financial statements may not yet have been approved.
The trustee certificate should therefore be accompanied not only by the previous approved financial statements, but also by the financial statements approved by the Board of Directors and the maintenance needs statement, although these will be discussed at the Annual General Meeting at a later date.