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Real Freehold Apartments - Not Available In the UK
Generally speaking it's the land that a property is built on that has the highest and most reliable increases in value. In the UK apartments are leasehold and don't get this benefit as someone else owns the land.
When my wife and I were looking to buy apartments a few years ago our search took us to many different parts of the UK and Europe and one of the things that influenced us away from the UK was the inability to acquire freehold title to the land that the apartment is sitting on. We did find some flats described as freehold but they turned out to encompass the fabric of the flat itself and not the land on which it and the other apartments sat.
When we came to look in Tenerife the properties there were offered as 'full deed' (freehold equivalent) and this included a share of all the land that was part of the complex. In Tenerife all legally registered Communal land is regulated under the Laws of 'Horizontal Division' and basically define each owners share of ownership and their responsibility for its upkeep. This means that the owner of each apartment in a complex also owns a percentage of the land. Better still, it's not just the piece of land that your apartment is built on, it's the whole area of the complex, walkways, pools, gardens, terraces etc. etc. So, as land values have escalated then so has the value of the apartments that form part of the complex.
Community ownership also carries with it joint responsibility for the upkeep of the complex and how this has to be done within the Laws of 'Horizontal Division'. However that is a whole other subject and possibly one for a future newsletter. Suffice to say that each owner pays a community fee based on a share of the total running costs.
It is prudent to take advice though as not all property in Tenerife is legally registered and also some legally registered apartments are not registered under the Laws of 'Horizontal Division'. Although the title is legal, in the latter case, as a result of non-registration it is impossible to obtain a mortgage on these properties as the bank requires full documentation, hence these non-registered properties are for cash buyers only.
There are many anomalies in every country's property laws, taxes, regulations and procedures and it is always best to work with a specialist. Tenerife is our specialist market and we are here at Wady Properties in the UK and Tenerife to give you the benefit of our advice and experience and we are here to look after your interests in every way. We do not charge for giving advice and assistance or for answering any questions that you may have.
Some of our clients buy their own apartments here simply because they love Tenerife and want to own their own little piece of paradise. However they, as well as our long term investors, are best served by owning the land as well as the apartment, as that's where the real investment stability and growth lies.
David Cusworth
For more information please email
sharon@wadyproperties.co.uk
03/2008