Buying a villa apartment (villalejlighed) – what should you as a buyer be aware of?

Villa apartment, ideal share, two-family house—there are many names for it. Many people have probably heard of this type of home before, but what exactly should you, as a buyer, pay special attention to when choosing to ‘share’ a house with another family?

When you buy a villa apartment, you buy:

1: Shared ownership of the entire property with the other owners.

2: Right of use for part of the property (the villa apartment).

You only have the right to use your own part of the property, but the two co-owners own the house together. In short, it means that you will be dependent on the other party. The two co-owners must agree if, for example, the roof needs to be replaced or other maintenance needs to be carried out on the house.

Minkøbermægler.dk has made a list of points that may be worthwhile looking at if you’re considering buying a villa apartment.

1. Is there a detailed co-ownership agreement that regulates the relationship between the two co-owners , specifying what the two co-owners must pay in joint expenses, water, heating, etc.? In case of disagreement, then you are better off as a shareholder.
2. What about the right to use the basement of the house, the garden, etc.? For example, do you share the whole garden or is it divided? It is important that this is specified in the co-ownership agreement to prevent any disagreements from arising later. The right to use the garden typically applies for 10 or 30 years and must then be extended, unless a different notice of termination has been agreed upon. Note that, according to case law, it is possible to agree on a permanent right of use with 30 years’ notice of termination.
3. Has a security deposit for the two shares been registered to ensure that no one gets stuck with unpaid bills? Remember, when buying a villa apartment, both shares are jointly and severally liable for costs such as property tax, home insurance, etc.
4. Meet with the person living in the other share and have a ‘chemistry meeting’ with them. If necessary, include this as a condition in the purchase agreement or in the letter of acceptance.
5. Has a house rule been established for when, for example, parties can be held and guidelines for pets? This way, unnecessary disputes can be avoided.
6. Does the co-ownership agreement specify that there is a right of first refusal? If so, as a shareholder, you have the pre-emptive right to purchase the other share when it is put up for sale.
7. However, the mortgage bank typically imposes certain requirements concerning the co-ownership agreement in order to grant a loan. Most often, this includes a minimum requirement that the agreement can’t be changed without the bank’s approval. If an addendum needs to be made to the co-ownership agreement, it is usually the buyer’s adviser who handles this. There will typically be an additional cost associated with preparing the addendum.
8. Is the property approved as a two-family house? Otherwise, you risk having bought a worthless apartment.

The list is not exhaustive, and there will always be many factors to consider when assessing what constitutes a ‘good co-ownership declaration.’ Therefore, it is a good idea to work with a buyer’s agent who has experience in buying and selling villa apartments and can guide you through the process.