Your property queries answered
Why does apartment have a 999-year lease?
Q An apartment I am interested in has a 999-year lease (987 years remaining). Is this usual (the agent says so) and if so why and what will it mean if I eventually come to sell on?
A It is usual for apartment blocks to have leases of the time span you mention - and it should not cause you any problems whatsoever when you come to sell.
The only time when the length of a lease becomes an issue is when there is only a few decades remaining (usually around 70) on the lease - in which case a lender would be reluctant to grant a mortgage on the property, but you're a long, long way off that. One of the key reasons for apartments being leasehold instead of freehold (as would typically be the case with a house) is that you are not buying the actual building the apartment is in. You won't own the exterior walls for example - you are only buying a "space" in the building as well as part-ownership of the actual building and the common areas.
These are owned and maintained by the management company of which you, as owner, will become a member. Because buying an apartment is such a different proposition from a freehold house, you should familiarise yourself with the ins and outs of management companies, the obligations of owners etc. The National Consumer agency has excellent information on its website, www.consumerconnect.ie .
Also make sure to get a clear picture of the state of the accounts of the management company, including how much is in the sinking fund - a fund that is built up for major and/or unexpected repairs, i.e. replacement windows, roof problems, new heating system. If the scheme is over 10 years old, find out if there has been recent expenditure (redecoration of common areas, servicing of lifts etc).
This should give you a better idea of what you are getting into in terms of on-going management charges.
Will change in rent-a-room rules help me get loan?
Q I read with interest the increase (to €10,000) in the tax free amount owners can earn from the rent-a-room scheme.
Two years ago when I went for outline approval, this rent-a-room element was factored in to the amount I could borrow (it wasn't enough to buy a two-bed in the development I wanted).
Does this mean that if I apply again I will be offered a higher amount?
A The short and not entirely satisfactory answer is maybe - as you know, the mortgage lending environment has changed considerably over the past year and in any case all mortgages are very personal as they are measured by the borrower's ability to pay.
However be very careful about buying a property when your ability to meet your monthly repayments depends heavily on renting a room.
A professional landlord will always factor in "void" periods to any property investment - a void is a period where a property is without a tenant. You must do the same. Ask yourself what would happen if your spare bedroom was vacant for a month or even two? - this is after all a likely scenario. Could you still meet your repayments? How much rent might you actually get for the room? It's probably less than you hope.
Your questions
Send your queries to Property questions, The Irish Times, The Irish Times Building, 24-28 Tara Street, Dublin 2 or email propertyquestions@irish-times.ie. Unfortunately it is not possible to respond to all questions. The above is a representative sample of queries received. This column is a readers' service and is not intended to replace professional advice. No individual correspondence will be entered into.
