Despite a recent uptick in interest rates, California’s housing market remains hot. In fact, according to the California Association of Realtors, house prices climbed 9.4% in just one year. This leaves many first-time homebuyers searching for novel ways to purchase starter homes.
If a single-family residence is financially out of reach for you, it may make sense to look for a condo or rowhouse. After all, units in multi-unit properties tend to sell for significantly less than their standalone counterparts. If you go this route, though, you need to know about party walls.
A party wall is a wall or another type of barrier that straddles the property line. Consequently, the party wall in your home probably has at least two owners: you and the person on the other side of the wall. Because of this joint ownership, there are likely to be limitations on what you can do with the wall.
For example, you may not be able to move or modify the wall during renovations. Furthermore, you may have an affirmative obligation to maintain and repair the party walls that surround your residence.
The party wall agreement
Many buildings with party walls already have existing party wall agreements. Even though you are going to have to read through potentially hundreds of papers during your home purchase, you should not overlook the party wall agreement.
The party wall agreement outlines your property rights and responsibilities. It may also set out a procedure for addressing disputes with other property wall owners. If your home does not come with a party wall agreement, you may have an opportunity to negotiate one.
Ultimately, reviewing and understanding the party wall agreement is a critical part of your due diligence as a first-time homebuyer.