With council planning rules in many urban centres focussing
strongly on increasing density of housing, and with many proposed
new apartment developments in the pipeline for Tauranga, apartment
living and buying an apartment is coming into sharp focus.
The excitement of living close to the CBD, bars, restaurants and
shops or simply not having to mow lawns and attend to gardens is a
big drawcard for many people. But before you purchase an apartment
off the plans there are six things you should consider;
1. Who is responsible for the development?
Do some homework about the people behind the company that is
undertaking the development and find out what other residential
developments have they been involved in. Do they have a history of
quality developments, do they stand behind what they are
selling? Your lawyer can assist with local market information
and can also conduct company and land title searches to establish
who owns the development company and the underlying land.
2. Does the development have the necessary
You should determine whether the development has necessary
resource and building consents in place from Council. Often
developments will be conditional upon the developer obtaining
consents, but some progress should have been made towards obtaining
these prior to entry into an Agreement for Sale and Purchase.
3. Sunset Clauses
Make sure that any Agreement includes a "sunset date" or a
"sunset clause", that allows you to cancel the Agreement by a
certain date if the developer has not made sufficient progress
towards completion of the development. Generally a sunset
date is tied into the purchaser obtaining a refund of any deposit
paid as well.
4. Make sure your deposit is safe
Your lawyer should ensure that the deposit is held by the
developers' solicitor (in a trust account) as stakeholder pending
5. Work out what your costs will be
Apartments are unit titled developments, so all apartment owners
are part of the body corporate which manages the day to day
operation of the apartment complex, including arranging insurance
for the whole complex, managing common areas, rubbish, recycling
etc. You should ascertain by way of viewing a draft body
corporate budget what your annual levies and costs will be.
Apartments are still separately rated, so you will need to factor
in rates on top of body corporate levies.
6. Understand the Body Corporate Rules
Make sure you obtain a copy of the draft Body Corporate
Operational Rules for the development. Check that there are
no unusual restrictions regarding the use of the apartment or
common areas which would not suit your lifestyle.
The best advice is to contact your lawyer before signing an
Agreement for Sale and Purchase. We can then advise you on
additional conditions and on the finer detail of the Agreement so
that your risk and position is covered adequately.
To find out more, get in touch with our property