If you are looking to enter the rental property game for the first time, you undoubtedly have some concerns about finding the right place. While purchasing a single-family home has its advantages, buying a condo, rowhouse or similar dwelling in a multi-unit building may be more affordable. If you go this route, you are likely to have to deal with at least one party wall.
A party wall is simply a barrier between two separately-owned spaces. Before purchasing a property that has a party wall, you should review and understand the existing party wall agreement.
What is a party wall agreement?
A party wall agreement is just a legally binding contract between all owners of the party wall. This agreement defines each owner’s wall-related rights and obligations. Your agreement may include provisions for maintaining the wall or modifying it. It may also have a dispute resolution procedure you must follow if you need to address conflict with another party wall owner.
Why are party walls important?
To make units as appealing as possible to potential renters, many property owners want to renovate their rental spaces. Moving or altering a party wall, though, may not be possible. After all, party walls often provide structural support to the entire building. Even if your wall is not structural, it may serve as a fire or sound barrier.
It may be possible to negotiate revisions to an existing party wall agreement or a new agreement altogether. Ultimately, though, by reviewing the party wall agreement before closing, you do your due diligence as a rental property investor.