David Watt is extremely happy with life in the thick of it.
The retired accountant and his wife downsized into acentral Auckland apartment 12 years ago and haven’t looked back.
With pubs and cafes right on their doorstep there is a lotof informal socialising with their neighbours. “You’re always running intothem, it’s like Coronation St and you go to the local,” he says.
“The Viaduct Harbour is ourbackyard, we’ve got Victoria Park, there’s lots of walks and bike trails.”
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From time to time he getsfellow baby boomers asking for his opinion on whether they should trade thefamily home for more modern and maintenance-free living.
‘Lock up and leave’ is fine asa theory, he tells them, but there are important realities to consider. With somany multi-unit complexes requiring expensive repairs and suffering underdysfunctional body corporate regimes, knowledge is most definitely power in theapartment market.
“You’ve got to do yourhomework, and you need to spend some dollars on getting a solicitor or someoneknowledgeable in the industry to have a look at a building for you,” Watt says.
He also advises reading thenewspapers and getting sound financial advice.
Paul Lochore is a 54-year veteran of the real estateindustry and has been outspoken about the issue of older people on fixedincomes becoming trapped in shoddily built units they can’t afford to fix.
But the managing director of Lochore’s Real Estate onAuckland’s North Shore is not anti-apartments. In many cases he’s all for them,provided they’ve been well constructed, he says.
“There’s nothing wrong with apartment living and bodiescorporate, I’ll make that very clear, because if you get a very good bodycorporate they look after it, the insurance is reduced, (there are) all sortsof things they can get better value (on).
“It is peace of mind for a lot of people.”
However, like Watt he says would-be downsizers need to becareful about what they’re buying.
Assistance is available. One helpful service offered byconsumer advocacy group the Home Owners and Buyers Association of New Zealand(HOBANZ) is its ‘Body Corporate Health Check’. For a small fee HOBANZ willforensically examine the documentation that comes with an apartment you’relooking at and point out any red flags.
There is a lack of robust regulation surrounding aspects ofNew Zealand’s apartment market, and parts of the sector have taken it uponthemselves to lift standards by providing advice and training.
Watt is a member of the Body Corporate Chairs Group, anorganisation formed by apartment dwellers who had served as chairs of their ownbodies corporate and become frustrated by the lack of information and support.It is in the process of writing a ‘Hitchhiker’s Guide to Bodies Corporate’based on its collective experience - “a sort of a hit list of what you need tolook out for”, Watt says.
There is plenty to research. Owning a home in a multi-unitcomplex means you are automatically part of a body corporate, and the expertssay it’s important to view the AGM and committee meeting minutes and accountsgoing back three years to get an idea of how well the complex is run.
One issue to look out for is how long-term maintenance isbeing provided for. By law every development must have a Long-Term MaintenancePlan, but the rules around how that plan is funded are less strict. If the bodycorporate is not putting enough aside for big ticket items such as replacingroofs and lifts, owners down the track will be hit with big bills.
“If anyone sees an advert thatadvertises low body corporate fees as being a plus, be very careful, because infact what they’re doing is understating the longer term fees that will apply,”Watt says.
Having said that every homerequires maintenance, and it’s worth comparing what you may pay in body corporatefees with the cost of the upkeep on your old family home, he says.
Another helpful resource is the e-book “Bodies Corporatefor Beginners”, produced by the Strata Community Association. The associationrepresents body corporate managers and was another initiative set up with theaim of lifting standards, because although most apartment complexes employmanagers there are no regulations governing their activities.