Ques­tions to ask when buy­ing a snow apart­ment

Alpine News - - Property - BY DAN FLYNN & TESS HAUSER

OWN­ING an apart­ment in the snow is a dream for many keen skiers and board­ers. Wak­ing up in your own apart­ment to see the snow cov­ered gum trees or re­turn­ing af­ter an ex­haust­ing day on the slopes and fall­ing into your own bed this is the dream.

Ro­mance aside, buy­ing an alpine prop­erty is a com­mer­cial de­ci­sion and we have the top three ques­tions you need to ask. 1. What am I buy­ing? Buy­ing an alpine apart­ment is dif­fer­ent from tra­di­tional sale and pur­chase of land be­cause the moun­tain is (mostly) owned and con­trolled by the govern­ment. It is called ‘crown land’ and is leased to com­pa­nies and in­di­vid­u­als on a long-term lease­hold ba­sis.

The most typ­i­cal form of own­er­ship on the moun­tain is for a com­pany to hold a lease from the Govern­ment (head lease), of­ten re­ferred to as a lessee com­pany, and in­di­vid­u­als pur­chase shares in the com­pany which en­ti­tles them to a sub­lease of an in­di­vid­ual apart­ment. You should note, the term of your sub­lease will only be for as long as the com­pany’s lease, so al­ways check how long there is left to run on the head lease.

Many newer sub­leases can now be regis­tered with the Land Ti­tles Of­fice to pro­vide a clear and safe se­cu­rity.

A most im­por­tant rea­son to know what you are buy­ing is fi­nance. The type of lease­hold ar­range­ment for alpine prop­erty has a sig­nif­i­cant im­pact on whether banks are pre­pared to lend. A sub­lease that can be regis­tered is en­cour­ag­ing for the banks as they can reg­is­ter a mort­gage in a trans­par­ent and se­cure man­ner. 2. What are the out­go­ings? When pur­chas­ing an apart­ment within a body cor­po­rate, you must care­fully con­sider the build­ing’s out­go­ings in­clud­ing: elec­tric­ity, up­com­ing re­pairs, in­sur­ance and man­age­ment fees and what pro­por­tion of those you will be re­quired to pay.

Heated drive­ways and foot­paths can be a lux­ury, but also ex­pen­sive to run.

Al­ways re­quest a copy of the an­nual bud­get for the build­ing.

This will de­tail in­sur­ances, land tax, main­te­nance bud­gets, man­age­ment fees and other ex­penses you will be li­able to con­trib­ute to­wards.

3. In­vest­ment re­turns - what is the rental ar­range­ment?

As well as a won­der­ful life­style choice, an alpine apart­ment can be a good source of rental re­turns.

If the site lease is held by a lessee com­pany, it will have a com­pany con­sti­tu­tion which gov­erns the op­er­a­tion and man­age­ment of the build­ing.

Of­ten, these con­sti­tu­tions will reg­u­late how you may sub­let your apart­ment to hol­i­day and sea­sonal ten­ants.

Some prop­er­ties have com­pul­sory man­age­ment and let­ting agree­ments, some al­low com­bi­na­tions and some are sim­ply own your own.

If the build­ing does not have a com­pul­sory let­ting ar­range­ment, we rec­om­mend tak­ing your time to con­sider which let­ting ar­range­ment or man­age­ment suits you best.

If a com­pul­sory man­age­ment agree­ment is re­quired, check for over­all man­age­ment fees, and whether these are in­clu­sive of third party agents and sup­pli­ers. Any other ques­tions? TressCox Lawyers are able to help and ad­vise with any of your pro­posed alpine in­ter­ests and trans­ac­tions.

PHOTO: Tress Cox Lawyers

REAL ES­TATE: Tress Cox lawyers are able to of­fer ex­pert ad­vice for those want­ing to pur­chase an apart­ment in the Aussie Alps.

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