Freehold Acquisition

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Freehold of the Condominium

The option to purchase a condominium on a freehold basis applies to condominium associations consisting of small houses.

In a condominium association, the association owns the houses while you, as a member, own the right to live in a specific house. After purchasing the condominium freehold, you own your home entirely, from the inside out.

Typically, the idea of purchasing the freehold arises at a general meeting of the association. The reasons and background can vary, and they do not affect the process of acquiring the freehold. When the purchase is completed, the condominium owner becomes the legal owner of the property. Financing is arranged as with a typical small house purchase—through a bank loan in exchange for a mortgage deed on the house.

White apartment building exterior

In a freehold condominium, the monthly costs are usually reduced by 500 to 2,000 SEK. This is primarily because, as the owner, you can deduct the interest on loans that were previously held by the condominium association. You also have the right to claim ROT deductions for exterior maintenance, which a condominium association cannot utilize.

In recent years, we have seen an increase in inquiries from small condominium associations with 12 apartments or fewer. This is due to the increased difficulty in obtaining bank financing for both the association and the purchase of the condominiums.

Maintenance responsibilities in a condominium association are generally divided such that you are responsible for internal maintenance while the association handles external maintenance. When you own the house, you take on the entire maintenance responsibility.

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Forum Fastighetsekonomi has the experience and competence to carry out freehold purchases in a smooth way by:

  • Assess the conditions for freehold purchase by reviewing the condominium association's financial status and comparing it with the market conditions both geographically and generally.
  • Provide each individual member with a “freehold calculation” that shows how housing costs would be affected if the freehold purchase is completed.
  • Conduct a planning investigation that clearly illustrates the forthcoming subdivision of the association's buildings and land.
  • Prepare and conduct one or two additional association meetings to decide on the association's voluntary liquidation, which is necessary for the freehold purchase to proceed.
  • Act as the liquidator tasked with winding up the association. Formally, the liquidator is appointed by the Swedish Companies Registration Office (Bolagsverket).
  • Guide members during the liquidation process and help form the working group that will collaborate with the liquidator until the members can take possession of their ownership.
  • Using the completed planning investigation as a basis, assist the Swedish Mapping, Cadastral and Land Registration Authority (Lantmäteriet) when the association's land and buildings are to be subdivided. During the subdivision, Lantmäteriet forms a community association responsible for common facilities and installations, such as green areas, water and sewer systems, and similar infrastructure.
  • Assist in the process of distributing the condominium association's loans among the future small house owners.
  • Manage the process when members sell their condominiums to the association and then buy back the properties as small houses. The purchase price consists of the loans taken over from the association and part of the cost associated with the freehold purchase process. Together, these constitute the net purchase price.
  • Direct the formal conclusion when the condominium association holds the final general meeting, submits the final accounts to the Swedish Companies Registration Office (Bolagsverket), and the association is liquidated.

The process of buying out a condominium is tricky and requires experience and competence. Forum Fastighetsekonomi has assisted in a large number of freehold purchases and can establish both realistic timetables as well as functional action plans so that the process runs successfully and painlessly.

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Forum's extensive experience in conversions contributes to security for all parties involved in the conversion process.

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