Question: I bought an apartment six months ago and have now discovered it has some structural problems. It was idle for a few years while the others were owner-occupied. My query is this. Will the management company's insurance cover the cost of repairs to the apartment or is it up to me to sort?
Answer: Buying a property can be a very stressful process particularly if it's your first time. You don't say whether you are planning on living in the property or renting it out but regardless, the key issue is who pays for the work at this point post closure of the sale.
Most property sales take place on the basis of the legal term caveat emptor or buyer beware. A vendor (seller) is not under any duty to disclose any physical defects the property might have. Therefore, we always advise clients to retain the services of a chartered building surveyor or engineer prior to purchase so that they can get an understanding of the condition of the building and identify any defects. This survey will also inform the buying decision by estimating the potential cost of repairing these defects.
It’s not clear from your query if you had such a report completed prior to the purchase or if you have just discovered these issues. It may be worth getting your solicitor to review the sale contract although it is unlikely if this will provide you with any options but it is worth examining in detail.
As you have purchased an apartment you are also now part of an owners’ management company (OMC). The OMC is usually responsible for the shared common areas of the apartment block including corridors, external walls and roofs. This includes having appropriate insurance in place on the block of apartments.
Individual owners are responsible for everything inside the four walls of the apartment including insurance and maintenance. However, there can be some variations on this arrangement so you need to ask your solicitor to review your head lease which will outline in detail the services that the OMC is to provide; it will also include the scope of cover provided by the block insurance policy.
The last option to explore relates to the cause of the structural issues which you haven’t provided in your query. If the issues were caused by an insurance event such as water ingress from a burst pipe in the common area then you may be able to claim under the OMC’s block insurance.
If the issues appear to have been caused by poor workmanship during construction then you may have an option to make a claim under a Home Bond insurance or other similar scheme. These schemes provided insurance against latent defects such as major structural problems, however the insurance cover usually only covers the first 10 years after the building was complete.
Again, you may need to get your solicitor to research the original sales documentation to explore if this cover applies to the property.
Enda McGuane is a chartered property manager and member of the Society of Chartered Surveyors Ireland, scsi.ie
