Andree Raid: Illegal Renovation Brings Unexpected Risks for Homeowners or Buyers
In older apartment buildings, it is quite common for one apartment owner to have built in a balcony, another even extended the living space onto a balcony. A third has replaced windows according to their own discretion. A fourth has removed a partition wall and thereby changed the apartment layout. Recently, one could read in the media that private heating sources are also being installed.
In the short term, a few extra square meters of floor space gained at the expense of a balcony, a novel layout solution achieved after creating a wall opening, or an independent heating system not dependent on the community's decisions can be an attractive option that nicely increases the real estate market value.
In the longer term, however, this can mean the need to eliminate illegal renovations, which can entail unexpected and unforeseen costs for the apartment owner. The situation becomes quite serious if it turns out that the illegal renovation was the cause of an insurance claim and thus problems arise in the insurance payout.
Extending an apartment onto a balcony is by no means an innocent change. If the apartment's area remains unchanged in heating cost calculations, in essence the neighboring residents end up paying for the extension's heating costs. One might think that sooner or later the time will come when neighbors become aware or local authorities gain sufficient strength and courage to demand the removal of enclosed balconies or framed glass structures that alter the building facade, or the removal of windows that differ from others.
An apartment owner who has carried out renovation work in their apartment themselves, or who has purchased such an apartment, should ensure that the changes comply with norms and regulations and, if necessary, can be entered in the building register. Life shows that as time goes on, norms and standards become increasingly stricter and legalizing renovation work becomes more complicated.
A person generally should not buy a residential unit that does not match the data in the building register, one with different windows from others, where the apartment has been expanded onto a balcony, where there is an unregistered heating source, or where other illegal renovation work has been done. When purchasing such an apartment, it is important that the buyer knows very precisely what they are doing and what risks they are taking on. It is only a matter of time before the costs of renovating or legalizing the residential unit must be paid.
In addition, conducting transactions with illegally renovated residential units can be difficult. Banks do not want to finance real estate objects with potential problems. Since most residential property purchases are financed through bank loans, it is not easy to pledge such a residential unit as loan security and find buyers for the property.
A proper real estate broker must help the real estate buyer pay attention to circumstances related to illegal renovations so that the home buyer can decide what risks and possible future costs they are willing to take on themselves.
