Are you thinking about purchasing leasehold properties? For starters, you need to know the legal terminologies that are used in these transactions and how one can approach this subject.
When we are buying properties, we are faced with either a Freehold or a Leasehold property. Both have their merits but we won’t go into both of it today, but today we assume we are planning to purchase a leasehold property only. This alone has its own legal terminologies that are used in these transactions and I will give pointers here, on how one needs to avoid stepping onto any landmines that may cost you dearly.
So here are some of the tips that I have gathered for you to know to know about them.
A lease refers to a legal and binding contract whereby an individual or company conveys land or property to another for a specified amount of time, so the time here is the leasehold, in exchange for an agreed-upon price or amount. It’s more like a landlord and tenant relationship in leasehold properties, but in this case, a lease is usually for a long period of time and it can vary from 70 years or more, even up to 999 years. It is however encouraged that individuals should take up leases that have more years, preferably more than 120 years. Simply because, the more years on a lease, the more the property is normally worth. By the way, the owner of this property is known as the freeholder, and the one leasing this property is referred to as the leaseholder.
To initiate the lease agreement, there is normally a stipulated amount which is known as the ground rent, it is advised that this amount should be equivalent to 0.1% of the value of the property, as is the amount that would be paid annually by the leaseholder to the landlord. There are cases where there might be a hike in the price over the years, and the reasons should be clearly stipulated in the contract, and they should not be biased towards the leaseholder in any way whatsoever.
As the signing of the lease agreement or contract is a major decision, the leaseholders are encouraged to thoroughly read it, or even consult a lawyer if need be, to properly understand and agree to all the clauses in the contract, and forward any questions or grievances to the landlord they may have before the signing. This will encourage or set a proper relationship between the two parties before any actual signing of the documents.
Most importantly, it should be understood that this is a legal document and therefore once it’s signed the leaseholder is expected to fully adhere to all clauses written down here, failure to do so, will have grave consequences. But being a leaseholder also has its advantage of forwarding any apartment related issues that the landlord may or may not know about it and it is the landlord’s responsibility to take care of them effectively and immediately. For example, this may include noisy neighbors, the environment around the house or flat, and or any repairs in and around the house that needs to be made.
All this will be done at a fee, as agreed upon in the lease contract, but it takes away from the leaseholder the headache of having to worry about these minor issues around them, but instead have the luxury and peace of mind, and yet still have things taken care of around them. In the case of any negligence, it’s the same, but now the leaseholder has to adhere to the contract, so does the freeholder, as again the contract is binding, therefore if the service charge is required to be paid on time, likewise the services also should be done on time. The lease will be a guideline of what is expected of you as a leaseholder, in it, there will be proper guidelines of what can and cannot do or be done to the particular property.
For example, in the case of wanting to completely renovate the house, or change up the interior, the contract must always be taken into consideration. In such a case, the freeholder could clearly stipulate that no renovations or changes to the house may be done whatsoever, whether minor or major, reasons best known to them. Therefore the leaseholder cannot go against this agreement. With regards to this, if an individual identifies a particular property and loves it, but hopes to change it up in one way or another, then leasing a property is not the best option for them, as it does not give the leaseholder any freedom to do so as they please with the property, as they do not own it.
As much as it may fit their style and within their budget, however, once the lease comes to an end it may be a serious problem for the landlord to lease the unit to another.
Purchasing leasehold properties like Toa Payoh New Launch Condo can be complicated and overwhelming. You can always ask for assistance from people who have done the transaction before or look for experts in purchasing leasehold properties for the best results.
Here is a video on this subject matter for your viewing pleasure;
Hope these tips can help one who is keen on a leasing a leasehold property like Gem Residences Price.