FAQ FOR BUYERS
We write all the answers ourselves
AVOID CO-OWNERS' DEBTS WHEN BUYING AN APARTMENT
Our clients visited an apartment for sale; as the property appealed to them, they were ready to make an offer quickly. However in order to confirm that the purchase would be a wise one and because we were not the selling agents, they asked Monde Avenir to review the transaction.
We discovered that a co-owner had repeatedly not pay for his share of the building renovation work and that the management company had incurred on behalf of the other owners large sums of money in legal pursuit. Debts and legals fees were then to be borne by all the owners until the defaulting owner sold his apartment. Suddenly the desired apartment had lost his appeal, it just was not the right time to invest in that particular building.
Have a look at the webpage where we present to you this consultation service.
https://www.mondeavenir.lu/investorsconsultation
IS WHAT I VISITED FOR SALE ?
This seems like such an idiotic question that most visitors will not even think about it… Yet ….Is what I visited really for sale ?
Clients of ours asked us to accompany them to their 2nd visit to an apartment, which they really liked. Concerned that they could be blinded by how much the property appealed to them, they sought an external opinion. We visited and saw for ourselves how attractive the ground floor apartment was and how it would be very pleasant to walk out onto a lovely terrace for a barbecue with friends.
At Monde Avenir we are reputed for being meticulous and hey, by reviewing the property paperwork, we found out that the apartment vendor did not own the terrace !
Realising that there was no terrace and that consequently, the asking price was over market price, our clients decided not to waste their money. They invested in a better priced property.... with a terrace.
FROM ONE M2 TO ANOTHER : HOW TO DECRYPT THE DIFFERENT SURFACES ?
The habitable surface
It represents the private lived-in rooms inside a building. Excluded are rooms such as garages and cellars, as well as spaces with a ceiling height of less than 2 m.
The non-habitable surface
It represents inside the building all the private rooms in which we do not “live” such as garages, cellars or unfitted attics.
The total surface / the private surface
It accounts for all the m2, lived-in and non lived-in, including terraces or balconies and regardless of the height of the ceiling under the eaves.
It is described as a private surface in the context of an apartment in a residence because here we have to distinguish between private m2 and shared m2, such as the entrance to the building.
The useful surface
It represents all the m2 inside the property. Terraces or balconies are therefore excluded. Ceiling height is not taken into account.
The weighted surface
It represents the useful surface to which we apply weighting coefficients to translate the economic value of each element: 1 / interior space with ceiling height of more than 2m (coefficient: 1), 2 / interior space under slope (coefficient: 0.5), 3 / outdoor space (coefficient: 0.4).
In the context of an apartment in a shared building, it is the weighted area that is used to calculate the share of each owner in the sharing of common areas and the allocation of the various charges.
THE 5 ADVANTAGES OF BUYING AN ALREADY BUILT PROPERTY
1 / No waiting!
The property is generally free on the day the Deed of Sale is signed,
2 / Of course you pay registration fees but the recorded price represents the total value of the property acquired.
When you buy a property off plan / under construction, the recorded price is based on a Technical Specification List. This Technical Specifications List is often limited with a minimum of electrical or sanitary equipment, a limited budget for the choice of floor and wall coverings, without provision for the kitchen or exterior fittings.
3 / You can benefit from the Tax Credit
The Bëllegen Akt allows each buyer to reduce registration costs by 20,000 euros.
4 / You know the common charges in advance
When you purchase an apartment in a residence, you pay monthly management fees. When you purchase an apartment under construction, these charges are estimated (often under-estimated to attract customers); when you purchase an existing property, these charges are real and known.
5 / You see for yourself the state of construction of the property before the purchase.
And if you don't feel able to evaluate it yourself, you can bring in an expert.
In short, you know what you are signing for! No bad surprises afterwards.
NEW CONDITIONS FOR GRANTING A MORTGAGE IN LUXEMBOURG
Since January 1st, 2021, new conditions have been put in place and this according to the profile of the buyer.
You are what is called a first-time buyer, so you are buying your first property in Luxembourg. Your loan, “loan to value”, is limited to 100% of the purchase price of the property. You can no longer include in the loan a lump sum for the purchase of the future kitchen or for other improvements.
You already own a main residence and want to change it. The bank is relying on the fact that you are making a nice profit from the sale of the previous one. You will be granted a 90% loan to value. If the bank can afford it, it may raise the lending ratio to 100%.
If you are a real estate investor or if you wish to acquire a 2nd home, your borrowing level will be limited to 80% of the property value and the total loan limited to 800 000 euros.
For more information on how to apply for a mortgage, contact us
WHEN A RENTAL PROPERTY IS PUT ON THE MARKET
The curent tenant has the possibility to stay and even benefits from a pre-emptive right in the buying process, if he/she has been renting this property for more than 18 years.
If the rental contract was duly completed in writing, the new landlord cannot oppose to it and the contract must run its course until the end of its pre-determined duration. In the instance of an indefinite contract, he/she can only remove the tenant if he wants to move in himself/herself, if he/she wants to move a close relative in or if major renovation work has to take place. A 6 month notice from the landlord is requested.
BUYING LAND WITH A VIEW TO BUILD ON IT
The acquisition of the land:
The authorities distinguish between “existing neighbourhoods” (“quartiers existants”) inside a commune, and “new neighbourhoods” (“nouveaux quartiers”) usually found on the outline of a commune. Outside of these areas, it is impossible to find a site unless you purchase a working farm with the intent of running it.
When buying a piece of land in an “existing neighbourhood”, the site for sale will be an isolated one tucked in between two fully developed sites. Usually all the infrastructures are already all in place.
Some agricultural lands are regularly rezoned as residential sites and then named “new neighbourhoods” so as to accommodate the ever growing housing expansion. When you buy there, you usually come across builders and promoters who acquire the entire neighbourhood for future developments.
Smaller developments such as those on a single site are less attractive to developers as the next administrative and planning steps are lengthy, expensive and more profitable as the site to be developed grows in size.
DECENNIAL BUILDING WARRANTY & TWO YEAR BUILDING WARRANTY
They are insurance covers that are not subscribed to by the owner or the occupier of the property but by the builder/promoter building it. However they are the insurance policies that the property owner can benefit from if there is a defect in the construction, which is discovered after its completion.
The decennial warranty covers for defects affecting the stability and the structure of the building, such as roof, walls and openings. It is valid for 10 years after the completion of the construction.
The two-year warranty is the cover for the defects affecting smaller items as well as brought in pre-built elements such as the heating boiler and the electric shutters. It is valid for two years after the completion of the construction.