Buying an Apartment Might Seem fairly straight forward but there are some hidden red flags that you must look out for when purchasing any sort of apartment.
1. Flammable Cladding
Flammable cladding refers to low-cost materials that have been used by developers in the external facades of apartment buildings. There are two primary types of cladding: flammable and non-flammable. Understanding the distinction between these is crucial; the last thing you want is to live in a hazardous environment.
Although developers today are more aware of cladding issues, it’s essential to consider this factor when purchasing an apartment built between 2014 and 2020, as flammable cladding was commonly used during this period.
First and foremost, always inquire with your real estate agent about any material facts related to the property, as they are legally obligated to disclose information that could negatively impact your purchase. Additionally, reviewing body corporate minutes and meeting records can provide insights into any existing cladding concerns or previous remediation efforts.
If you plan to finance an apartment project with known cladding issues, be prepared for potential lending restrictions. Some financial institutions may limit their mortgage offerings due to the heightened risk associated with these developments.
2. Bedrooms with No Windows
Did you know that, according to banking and valuation standards, a bedroom without windows in an apartment is not considered a formal bedroom? This type of room is referred to as an “internal bedroom,” which relies on borrowed natural light from the living room.
The market generally views these spaces as dark and uninviting, and from a lending perspective, they can pose challenges with certain banks. Additionally, selling such a property in the future may be difficult. Therefore, when purchasing an apartment, ensure that the bedroom has windows—skylights do not qualify.
3. High Body Corporate fees
For a typical apartment built between the 1970s and 1990s, body corporate fees usually range from $2,000 to $4,000 annually. However, in some cases, these fees can exceed $10,000. Higher costs are often associated with densely developed properties that feature extensive common areas, such as swimming pools, gyms, and on-site staff. If you are considering a boutique development, it’s essential to review the body corporate minutes. This will provide insight into any planned remediation, renovations, or maintenance for the complex. Be aware that such projects may lead to significant increases in body corporate fees in the short term to cover necessary repairs and upkeep.
