Hi!
Here is a question from an absolute newbie on the above-mentioned topic.
There're a couple of threads about PPE on this forum that are somewhat helpful (one discussing issues about PPE voting, and another concerning the difference between PPE and another legal form of ownership etc).
I am trying to understand in general,
- do PPE apartments constitute the majority of the real estate market offers?
- are there any more preferable forms of ownership (of apartments) to keep an eye on? I'd call preferable the ownership of the land, the least possible maintenance/fee burden, possibly the full ownership of the building by each owner etc. It could be as well something I am unaware of yet.
And in the context of PPE specifically,
- does PPE always mean that the land a property stands on is rented? or it could be both?
- what does impact the amount of administrative fees/rents paid and are there some risks involved, are there any protections against sudden spikes?
Ie. I'd like to have a more generic overview of the situation.
If I need to put my question in the context of a canton, I'd opt for Vaud.
Many thanks for your time.
Every apartment block is divvied into thousands. You pay your charges according to the size of your apartment. So if your apartment has 100/1000 then you are liable for 10% of the costs. If 50/1000 then 5% of the costs.
The land the building is on, as well as all the common areas, belong to the whole condominium. So you would own 10% of those parts in the example above.
Every year there is a general meeting of the homeowners, at which the administration will present a budget for the following year. This is then voted on as are all other decisions relevant to the running of the block. In some cases 501/1000 votes are needed, and in other cases, unanimity is required.
Before buying you should ask for a copy of the house rules, read the minutes of previous meetings, check the accounts and check the amount of the building renovation and repair fund.
And check if the seller has any unpaid items, to the HO association or also taxes.
Does such debt automatically transfer to the new owner? I thought that these are personal debts of the former owners, only the debt written against the property in the registry becomes a burden to handle by the new owner. Is it handled differently in Switzerland?
There’s may ownership setups. Real estate rights and registration in Switzerland - Lexology The one which I was implicitly assuming seems to be “condominium ownership”. I’m not sure if that’s PPE. I still can’t find though if an individual condominium apartment has it’s own record in land-registry in Switzerland
HOA debt is most likely not in the registry so just a caveat.
not always true, there are some buildings that are built on land which still belongs to someone else (Baurecht) and then the building/apartment owners have to pay rent/interest on that. as many of these constellations were done in the 80ies/90ies with terms for 'rent' 50-100 years, some of them are coming up now where new discussions regarding the rent/interest for the land need to happen. Cant imagine that being too nice when you own an apartment but the land belongs to someone else.
also, make sure that whatever they say in the glossy prospects is true, the size really corresponds with what is written, that all Baubewilligungen are available, check how much is in the Erneuerungsfonds (And if it's empty, find out what renovations were done with the money and when), find out how old all the appliances are etc.
That must be fun, plenty of experience in horse trading needed !!!
The lawyer will ask both the tax office and the building administration for a declaration of how much is due. He will then deduct an amount to cover those taxes and costs which he will hold till the amounts are established, then pay them over. If this is not done, the new buyer would be liable for those costs.
He will also check if there is a mortgage on the building and any other charges against the owner which are registered in the cadastre.
I was speaking generally, but even if it's built on rented land, each owner will pay according to how many 1000'ths he owns. This will usually be done by the administration and be included in the general charges.
I am wondering, hypothetically in such cases what prevents a landlord from asking an impossibly huge rent, as the building is unlikely to be moved elsewhere once built?
A convention when the building was built, a very long term rental agreement with regulated increases.
The older the building the more likely the shared costs are to go up. Mine have nearly doubled in 10 years (1980s block).
What does PPE stand for ?
La propriété par étage