Things to look out for when buying a special flat

28Hse Editor  2023-08-01  11.8K #Buy homes

In recent years, many first-hand properties have offered special units. And due to limited supply and relatively high prices, these units will remain high in value. Since these units are relatively popular, developers tend to sell them by tender. Here’s what to pay attention to when purchasing a special unit. 

Special flats are available in both first- and second-hand markets. Generally, special flats refer to flats in the same building that are different from other flats in terms of layout or features, including flats with rooftops, podiums, gardens, duplexes and interconnecting units. 

First, for second-hand flats with balconies, the most important thing is to conduct a land registry search and read the Deed of Mutual Covenant (DMC) to find out whether the flat has any unauthorised building works (UBWs), paperwork alterations, encumbrance issues, and so on. Buyers should also pay attention to the unit floor plan and check for any irregularities.

It is worth noting that there have been cases where the Building Department (BD) has issued demolition orders but failed to carry out encumbrance on the non-compliant flats after a long time, and buyers who don’t find any problems during the flat search were eventually held responsible for removing the unauthorised building works. Therefore, the absence of a BD demolition order in the search does not mean that there is no problem with the property. Professional help can be sought if necessary. 

If you are buying a duplex or interconnecting flat, you should pay attention to whether the flat was originally interconnected by the developer at the time of sale, or if the flat was modified by the original owner in accordance with the developer’s design. 

Therefore, when buying a self-designed interconnecting unit, the buyer must first confirm that the unit’s modifications have been included in the regulations and approved by the Buildings Department, otherwise it will be an illegal modification, which will affect future resale. Unauthorized reconstruction of connected units may violate the building's deed of mutual covenant and fire safety regulations. The Buildings Department may require the owner to restore the remodeled part, which could be a large financial burden.  

The number of flats with rooftop features is small, but there are a lot of things to keep in mind. Buyers should understand whether the ownership and right to use the rooftop belongs to the flat owners or to the common parts, i.e. owned by all owners of the building. In addition, buyers should also pay attention to understand how the rooftop maintenance responsibility is distributed, and if maintenance works are required, who has to pay for the maintenance costs. 

There aren’t many special rooftop units, but those who purchase such units have much to pay attention to. Buyers need to understand whether the ownership and usage rights of the roof belong to the unit owner (private), or whether it is a common area, meaning it is jointly owned by all the building owners (public). Buyers should also pay attention to how the responsibility for roof maintenance is allocated, and who needs to cover costs if maintenance works are required. 

In addition, buyers should pay attention to the restrictions on rooftop use in the building’s Deed of Mutual Covenant (DMC). In some buildings, the DMC will state in detail that tenants are not allowed to host barbecues on the rooftop, for instance, which must be complied with. Otherwise, the Owners' Corporation may potentially file a lawsuit against the development. 

Finally, keep an eye out for bank valuation. Due to the relatively small volume of special unit transactions, banks may not be able to estimate the full price. In the case of insufficient valuation, the loan amount will be lower than expected, and the buyer may have to cover the remaining amount by themselves. Therefore, it is necessary to reserve more for down payment to avoid forfeiting the deposit. 

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Disclaimer: All wordings and pictures which indicated 28HSE editor are the copyright of 28HSE LIMITED. Acknowledgement is required if other parts of this publication are used. The content is for reference only, does not constitute investment advice and it does not mean that 28HSE agreed the points. The area which show in the article is salable area if there is no special circumstances. The pictures is for reference also.

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