- December 11, 2023
- Posted by: legaleseblogger
- Category: Related News
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The Significant Risks Associated with Apartment Ownership and the Role of AI Legalese Decoder in Mitigating Them
When considering the purchase of an apartment, it is important to weigh the potential risks associated with this type of investment. While apartments generally come at a lower cost compared to single-family homes, the potential risks cannot be ignored. These risks include the possibility of the building becoming a leaky building or being designated as earthquake-prone.
One major concern is the prevalence of leaky buildings, particularly among apartment buildings constructed post-1990. It is disturbing to note that the vast majority of these buildings are either currently experiencing leaks or are at risk of developing them in the future. Moreover, older apartments, built prior to 1950, are not exempt from risk as they are susceptible to being classified as earthquake-prone.
In either scenario, the financial consequences can be devastating. The potential need to shoulder repair costs amounting to hundreds of thousands of dollars or even face the demolition of the building is a daunting prospect. Additionally, the decision-making process within a Body Corporate (BC) to address these issues further adds to the complexity of the situation.
Given the high likelihood of encountering one of these scenarios, it is natural to question whether it is possible to avoid purchasing an apartment that is likely to be afflicted by either risk. The situation raises doubts about the overall quality of apartment construction in New Zealand and the feasibility of finding a property free from these concerns.
The AI Legalese Decoder can play a crucial role in mitigating these risks by providing individuals with an advanced tool to comprehend complex legal documents. When considering the purchase of an apartment, the AI Legalese Decoder can assist in deciphering complex contractual agreements, strata reports, and body corporate information. This technology helps individuals to gain a deeper understanding of the potential risks associated with a property and make informed decisions.
Ultimately, the current state of New Zealand’s construction standards has led to a challenging and uncertain landscape for apartment ownership. The need for comprehensive due diligence and the utilization of advanced tools, such as the AI Legalese Decoder, is paramount in navigating this complex and concerning situation.
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Original Content:
AI Legalese Decoder is a software that can help lawyers and legal professionals understand and decode complex legal language and jargon. It uses artificial intelligence to analyze and interpret legal documents, contracts, and other legal texts, making them easier to understand and interpret. This can help legal professionals save time and effort in deciphering complicated legal language, allowing them to focus on more critical aspects of their work. AI Legalese Decoder can also help improve the efficiency and accuracy of legal research and analysis, leading to better outcomes for clients.
Revised Content:
AI Legalese Decoder: A Game-Changing Solution for Legal Professionals
In today’s fast-paced legal environment, lawyers and legal professionals often encounter complex legal language and jargon that can be challenging to understand and interpret. AI Legalese Decoder is a cutting-edge software solution designed to address this issue by utilizing artificial intelligence to decode and simplify complex legal documents, contracts, and other legal texts.
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Moreover, AI Legalese Decoder has the potential to revolutionize the way legal research and analysis are conducted. By streamlining the process of deciphering legal language, it can significantly improve the efficiency and accuracy of legal research, leading to better outcomes for clients and more effective legal representation.
In practical terms, AI Legalese Decoder can help legal professionals uncover hidden nuances and implications within legal documents, which could have a substantial impact on the outcome of a case or negotiation. By providing a clear and simplified interpretation of complex legal language, it enables legal professionals to make more informed decisions and craft stronger legal arguments.
In conclusion, AI Legalese Decoder is a game-changing tool for legal professionals, offering a powerful solution to the challenges of deciphering and understanding complex legal language. By harnessing the capabilities of artificial intelligence, it empowers legal professionals to work more efficiently and effectively, ultimately leading to improved outcomes for their clients. With its unparalleled ability to decode and simplify legal language, AI Legalese Decoder is poised to revolutionize the legal profession.
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You have to buy in a high quality building. Unfortunately I don’t know if there’s many of those. I bought a studio apartment in a building that is about twenty years old, and it was built as a 5 star hotel originally so it’s built to a very high standard. I got a hold of the Long term maintenance plan which had been updated in the last couple of years and it didn’t have any major issues. Also read through the body corp meeting minutes. I’m already on the body corp committee, and it’s run fantastically well, but I think most BCCs become political nightmares.
I read an article yesterday about a block in Wellington (albeit an older building) where the earthquake strengthening is going to be 400k…. per apartment owner.
I purchased one when I was young as my first property. I love apartment living but would be too nervous to take on the risk associated with buying one these days.
>It seems to me that the vast majority of apartment buildings made post 1990 are current or future leakers.
I think the NZ mindset towards apartments is they are a cheap approach to housing, so it is built with that mindset.
I would never buy one.
I bought a new build apartment ([The Citizen](https://www.urbancollective.co.nz/projects/the-citizen)) a few years ago and am reasonably confident it won’t become leaky based on the construction techniques. Not sure about EQ, but it’s “low rise” if that makes a difference.
I’m super happy with it, and love living there (having experience with apartment living in London first to see what I thought about smaller spaces).
As with all things, do your research, find out who did the construction – are they still around, what do the body corp minutes look like, and ultimately you get what you pay for. I’m not expecting or looking for capital gains, which are always low with apartments, but I’m on the “ladder”.
You can find good places. I have an apartment and in the time we have owned it the BC has been decent and there has been one repairable issue with a leaking pipe in the building. No watertightness issues and about 80% on the EQ rating. Do your due diligence like crazy
We bought an apartment in Auckland as our first home in 2016, built around 2006. We loved it and still own it today. We were able to buy in a central suburb for about half the price of a decent house, compared to our friends who were having to look way outside the centre to buy a rundown house with a small section for more money
Did our homework on the apartment, building, and BC. Read all BC notes extensively, talked to other owners and locals, looked into the developer and council plans, decided that it was a good purchase so went ahead.
Apartments can be a great 1st home purchase, cheaper and far less maintenance. As with anything, DYOR and decide what’s best for you.
You are only hearing about apartments with issues, and not ones that are OK.
In Auckland, not sure if there are any with earthquake issues; it’s not like Wellington. Older apartment buildings that have been converted would have had earthquake strengthening work done at the time. Older buildings will have seismic rating so you won’t be buying blind.
In Auckland and in some other areas, a lot of leaky buildings got put up or converted in late 90s early 2000s. Hopefully worst of that is behind us, but regulations are that agents have to share Body Corp minutes. You can find out if it was leaky and has been rebuilt/reclad or not.
Like any property purchase you have to do due diligence, but doesn’t put me off buying and apartment at the right price.
One thing about the history of leaky buildings; be very wary of politicians claiming that they will slash ‘red tape’. Some of that boring silly looking red tape was there for a reason
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I probably wouldn’t buy in a building more than about 10 years old. You’re entitled to see the minutes from body corp meetings and other documents – make sure you see a long term maintenance plan that’s budgeted for. Apartment living is pretty neat with a competent body corp. It’s nice not having to worry about lawns, building maintenance, roof nonsense and other big surprise expenses.
I purchased an apartment early this year that went through remediation for being leaky and had a new CCC issued by the council. Bank was happy to lend. My hope is that the problems have all been rectified, but It’s definitely something that makes me nervous.
The actual quality of life in apartment living has been fantastic and it was really the only way for me to get on the property ladder so I’ve just decided to risk it.
I’ve also heard of some fairly dysfunctional body corporates as well.
My rental portfolio is mostly dual key apartments. IÔÇÖve chosen carefully in well designed buildings that have high EQC ratings and well run bodies corporate, decent sinking funds, and nothing over 5 years old. Tenants love them, stay long term and I have no regrets.
I would never buy an apartment again. My apartment had massive damage in the ChCh quake. Most owners had different insurers – some said their apartments were ‘write-offs’ while others said they could be repaired. It took us years to settle, with some owners not allowed to live in their apartments, but paying rates. For those who were told their apartments could be repaired, they had to call in lawyers. Never again.
You have a very accurate idea of the risks.
It often comes down to having a really good body corporate who keeps on top of repairs
I bought an apartment in 2014 I think for about 450k, sold in August 2022 just missed getting into the park of the market by a few weeks after the LVR changes and sold for around 820k. Valued at the market peak for around 920k. So a bit gutted.
But it was a great block with a very intense BC which is what you want. Had already been through the leaky thing and out the other side.
Got me on the ladder cheaply with pretty much just my kiwi saver as the deposit.
Best advice I’d have is to do some research who is the builder and developer and what projects they have completed recently . There are still a number of quality examples of both. Not denying there is a number of cowboys, too, though
After seeing the hassles a friend went through with their earthquake damaged property and dealing with body corporate not agreeing on way forward I would be really reluctant to buy one. To me there feels like a lot more security buying a freestanding house on freehold land- not always achievable I know.
NZ building standard is shockingly bad
I know 2 people who basically lost everything and had to start from scratch after purchasing apartments because of leaky buildings. I dont think the situation has improved and this over around 15 years ago. Save yourself the headache, this is one of these rare cases where renting makes much more sense.
Builder here, most apartment buildings are absolute garbage in Auckland. They are build as quickly as possible for as cheap as possible and when they have issues it is much more difficult to fix compared to an ordinary home.
Anecdotal but a family member of mine has a expensive downtown apartment (they paid $1 million in 2018) and the place had only been built in 2006 and they are now having to rebuild most of the balconies as they are leaking and the steel frames are corroded. TheyÔÇÖve already had the joinery out numerous times because the concrete roof has sagged and all the finishing work is atrocious.
You are not wrong – apartments are generally high risk.
Even banks donÔÇÖt generally lend to low deposit buyer for apartments.
Bought an apartment 2ish years ago. Has cost $30k in special levies since, plus the usual body corp charges. 0/10 wouldnÔÇÖt recommend
You got to watch out for the body corporate fees. Some of them are close to 20k per year.
agreed. I have rented in the same place for almost 10 years now (in AKL CBD; built in the mid-90’s). Just last year someone came around and took all these samples of the inside of the walls (both inside and outside) and, last I heard from the LL, found moisture levels above the acceptable level. Zero word since then about it, but it doesn’t sound good…
I absolutely love the location and the complex, so was seriously thinking of buying here when the time came, but not anymore!
YouÔÇÖre right that the risks are higher, but another important point is that the gains are lower.
Much of the value of the apartment is in the building not the land, but itÔÇÖs the land that appreciates more in value.
Apartments are not good for capital gains.
Pacifica building looks awesome, you cant beat those views many places in the world. Although, right now auckland city is dangerous and filled with homeless and drug addicts like much of the western countries. It reminds me of Vancover actually. Never thought it would come to this though!
Don’t forget annual Body Corp and leasehold fees. Apartments are not very sustainable financially.