PROPERTY PURCHASE: SHOULD YOU LOOK A “GIFT HORSE IN THE MOUTH”?

Sometimes, you should look a “bargain horse” in the mouth! A derelict property can look like a ‘steal’ but can prove to be an endless ‘money pit’. Your Solicitor will help ensure that you walk away when you should.

In previous Blogs we have addressed the purchase of ‘Distressed Properties’ (primarily from Banks), however, this Blog is concerned with the completely derelict residential property. Are the advantages of such properties outweighed by the challenges?

The O’Shea Russell BUYER’S CHECKLIST which, can be downloaded for free from the homepage of our Website (www.oshearussell.ie), is very useful for those considering the Purchase of a Derelict House as it is for the Purchase of any other residential property. However, certain matters come into sharper focus when buying a derelict property.

The first thing to accept is that you will generally incur extra cost around Engineer’s and Legal Fees and the restoration of the property itself can be extremely challenging. For the Buyer on a tight budget, this type of Project is generally inadvisable.

The Derelict House will often possess a historic charm, be located on a mature site and possess other surrounding natural features. These are the factors that attract Buyers to such properties.

If you can fund the Project and, if you take some basic precautions, you can buy yourself a real ‘gem’.

The ‘Rule of 3’ can be applied in your deliberations as follows:-

  1. SOLICITOR

If you agree in principle to buy subject to Survey/Title, your first stop should be your Solicitor. He or she is key to the Buying Process. Your Solicitor will help you to put together a Purchasing Plan pulling together all elements of the Process. You will not want to enter into a Legal Contract to Purchase until all aspects have been fully explored.

2. ENGINEERING REPORT

The importance of retaining the Services of an Engineer before you contract to buy cannot be overstated. Your Solicitor will not only liaise with your Engineer but will also ‘brief’ him/her on particular aspects that need to be reviewed.

Clearly the Engineer will check:-

  • Condition: The physical condition of the Property, having due consideration to the time and nature of construction, dictates that the property be forensically examined.
  • Boundaries: These can often be particularly unclear around derelict properties.
  • Utilities: The position as regards water and sewage facilities can be particularly challenging.
  • Access Route: Is a Right of Way needed?
  • Planning: Can the house be brought back into use without Planning Permission; this can be a somewhat sensitive area.
  • Building Regulations: What particular challenges does compliance with these present?
  • Environment: Will the restoration of the property have environmental implications?

3. Searches

It is imperative that Searches are carried out around a number of matters before you sign contracts:-

  • Planning Search in respect of Property itself…
  • Road Widening Proposals Search
  • Planning Search referable to surrounding properties.

Your Engineer or Solicitor can conduct these Searches, however, you can also carry some of these out under direction yourself and this will save on cost while being personally informative.

The obvious question many Buyers of Derelict Properties fail to address to the Sales Agent is:-

“Why has this property fallen into dereliction?”

The answer to this question can provide important historical background fundamental to your decision as to whether to buy or not.

It is wonderful to see a Derelict Property brought back into use and become a home again. For the right Buyer, the purchase and restoration of a Derelict Property is a particularly satisfying labour of love.

Contact: Nicholas Russell

O’Shea Russell Solicitors

Tel: 059 9724106

Email: nicholas@oshearussell.ie

www.oshearussell.ie

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