Buying a flat on the secondary market

When planning to buy a flat on the secondary market, you need to look not only at its location, standard of finish and price, but also at the legal status of the property. In Poland two types of flat are most common – freehold and cooperative. The differences between them can have a major impact on how comfortably you can use the flat, the cost of maintaining it, and your options for selling or renting it out in the future. In this article I explain how these two types of property differ and which solution may be more advantageous for the buyer.

A freehold flat – what are its characteristics?

A freehold flat is a form of full ownership. The buyer becomes the owner not only of the flat itself, but also of a proportionate share in the common parts of the building (e.g. staircases, the roof) and in the land on which the property stands. In practice this means a great deal of freedom in dealing with the flat. You can freely rent it out, sell it, leave it in your will or change its use, e.g. from residential to commercial.

Every freehold flat must have a land and mortgage register (księga wieczysta), which confirms the ownership right and makes it much easier to sell the flat or take out a mortgage. Buildings containing freehold flats are managed by homeowners' associations (wspólnoty mieszkaniowe), which make decisions in agreement with the owners – usually at association meetings.

What is a cooperative flat?

A cooperative flat is an intermediate form. The owner of the flat is in fact the housing cooperative, and the person living in the flat has the right to use it. Importantly, this right can be sold, let or passed on by inheritance.

The cooperative, as the manager, makes decisions concerning the whole property. The owner therefore has no direct influence on renovations, investments or changes to the common parts of the building. Certain actions within the flat itself – such as changing the layout of the walls or converting the flat to commercial use – also require the cooperative's consent.

Not every cooperative flat has a land and mortgage register. However, you can set one up yourself. This is quite a common practice, especially when the purchase is financed with a mortgage.

Many buyers choose cooperative flats because they are:

• usually cheaper than freehold flats;
• located in attractive, central parts of cities;
• easily available on the secondary market.

Freehold versus cooperative flat – which is better value?

The choice between a freehold and a cooperative flat depends on individual needs, financial means and plans for the future. A freehold flat gives you greater independence. You can change the interior of your home as you wish, provided this does not adversely affect the structure of the building. In addition, as an owner you are obliged to contribute to the costs of maintaining the property. Cooperative flats, on the other hand, are a good solution for people looking for a cheaper home in a good location. They are often chosen by people buying their first property.

Summary

Both freehold and cooperative flats have their advantages and limitations. The choice depends on what matters more to you: independence and the ease of reselling the property later, or perhaps a lower price and a good location. Whatever you decide, you should seek help from specialists. An experienced estate agency in Katowice will help you choose the most advantageous solution and take care of all the formalities.