Buying a used apartment

A used apartment means an apartment in which somebody has already lived and which has been sold at least once before. In most cases, the vendor is a natural person.

When you buy an apartment in a housing company, you buy actually shares that entitle you to take over the apartment, not the actual apartment. The housing company owns the building and the apartments in it, but the shareholders own the housing company together.

Before you buy an apartment, you should get as much information about the housing company as possible. This way you will know about such plans as expensive renovations in a near future.

You should check at least

• the house manager’s certificate and all details of it, including the age of the building, the surface area of the apartment, the apartment’s
• share of the housing company’s debts, repair needs as well as renovations carried out and planned in the building/apartment
• the energy certificate
• the articles of association, financial statements and financial plan
• the minutes of the latest shareholders’ meeting. You can also find out if the housing company has decided on or is planning major repairs,
• for example a plumbing renovation.

f the building is several decades old and its plumbing has not been renovated, such work can usually be expected.

If you are buying a semi-detached house or the housing company only has a few apartments, check the articles of association to see if the shareholders have a broader liability for repairs than normal. This means that the shareholders are liable for structural repairs in the apartment, for example if there is a water damage. Normally, the housing company is liable for structural repairs.

Inspecting the apartment

Take a good look at the apartment on the public viewing. Ask for a private viewing if you are really interested in it.

• Look in closets, behind pictures and under carpets.
• Knock on the tiles in the bathroom floor – are they securely attached?
• Also check the basement, attic and shared storage areas.

You cannot later claim compensation from the vendor for defects in the apartment that you should have noticed in a normal inspection. The natural wear and tear on the apartment’s surfaces, structures and HVAC technology are not defects.

Read more about liability for defects in the section  

You have to inspect the apartment carefully, but the inspection is basically restricted to issues that you can see. Without specific reasons, you do not have to carry out inspections that require special technical measures or other unusual arrangements.  Commissioning a condition inspection is normally not necessary.

Such defects as moisture damage in the apartment cannot always be detected in a standard condition inspection. If a condition inspection has been carried out and, for example, a risk of moisture damage has been detected, the buyer must be prepared for possible moisture damage.

Age, condition and price of the apartment

Both the age of the building and any repairs made in the apartment are important for determining the condition and price of the apartment.
The older the building is, the more likely it is to need renovations, and the buyer must be prepared to pay for their costs in the maintenance charge.

If you buy a used apartment, you cannot expect to get the same quality as if you paid the price for a recently built apartment. For example, the building techniques and regulations related to damp proofing have changed and improved significantly over the last twenty years.

In advertisements the prices of apartments are given as the sale price and as the debt-free price, if it is different.

• Sale price = the amount the buyer pays to the vendor.
  Debt-free price = sale price + the share of the housing company’s joint debt allocated to the shares being sold.

If the housing company has debt, the buyer can usually choose if they would like to pay their share as monthly financial charges to the housing company or as a single lump sum.

Offer

An offer to an estate agent is always made in writing. If the owner is selling the used apartment themselves, a verbal offer is also possible.

• It is always a good idea to make the offer in writing, which means that both parties know their rights and obligations.
• You should not make an offer if you are not sure that you really want the apartment and that you are able to pay for it.
• If you cancel your offer, you may have to pay either a contract penalty specified beforehand in the offer or give up the deposit you paid. These amounts could not be more than 4% of the sale price of the apartment.

You may wish to include in the offer a resolutive condition that states clearly the situations in which the offer is not binding.

For example if

• you are not sure if the bank will give you a mortgage that is large enough on terms that you are satisfied with, you should include this as a resolutive condition in the offer
• you are planning to commission a moisture survey or some other inspection after you have made an offer, you should include in the offer a clause stating that the offer will be cancelled if the inspection reveals a defect that affects the sale price.

An estate agent may sometimes propose a condition under which the offer is valid if the buyer is able to sell their old apartment/property by a certain date. A condition of this type may be tricky for both the buyer and the vendor. The vendor usually goes on marketing the apartment even if they have received an offer. The buyer who made the offer, on the other hand, cannot be sure that they can buy the apartment at the price they offered, even if the vendor has accepted it.

The offer period is usually short

The offer should not be valid for too long. A couple of days is usually enough.

The vendor often does not accept the first offer, which may be less than the asking price. The vendor may decide not to respond to the offer. This means that the offer becomes void after the date given in it.

The vendor can make a counteroffer, in which case the initial offer becomes void. The buyer must respond to the counteroffer by the given time limit.

Even if the offer period is often hectic and the time limits are short, make sure that everything you have agreed at this stage is put in writing, or at least in an e-mail. This way you can avoid the situation in which such aspects as the price, the payment schedule or the day on which the sale is concluded depend on a verbal agreement.

The vendor decides to whom they wish to sell the apartment

The vendor does not have to sell the apartment even if they have accepted an offer. The vendor can always choose the person to whom they wish to sell the apartment. You do not even have to accept an offer that matches the asking price.

However, the vendor must pay the buyer the contract penalty agreed in the offer if they first accept the offer and then withdraw.

Read about an estate agent’s responsibility for an offer

Deed of sale in writing

You should always make the deed of sale for a share in a housing company in writing and in at least two copies, one for the buyer and the other for the vendor. If you buy the apartment through an estate agent, they will write out the deed.

You can also buy this service separately from an estate agent. Banks and law firms also write out deeds of sale for payment.

You can find templates for deeds of sale on the Internet. The deed must include all the terms of sale you have agreed on, including

• the vendor’s and the buyer’s information
• name and address of the housing company
• the numbers and quantity of shares and the apartment number
• information about the apartment (building, entrance, apartment number, number of rooms and area)
• price and terms of payment
• date on which the share certificates will be handed over
• the dates on which ownership and possession of the apartment will be transferred and the date from which the buyer starts paying the maintenance charge
• a note on paying the transfer tax.

You should also always mention in the deed of sale any major defects in the apartment that the vendor has reported to the estate agent when concluding the brokerage contract.

The buyer must pay transfer tax

Transfer tax must be paid within two months of the date on which the sale was concluded. The transfer tax on a housing company share is 2% of the debt-free price, which includes the apartment’s share of the housing company’s loans.