Hi guys, excuse my english but due to the jargon needed for these topics, I feel more comfortable using it.

I am looking into buying an apartment in Copenhagen and i have stumbled upon a couple of interesting cases where both of them have Hjemfaldspligt until 2050.

i have read a bit the laws related to hjemfaldspligt but i wanted to get as clear as possible an explanation from you guys in the following:

- Is this deal the reason why the initial apartment price is a bit lower?
- Does it/will it have an effect in selling price in the future ?
- Is there any information from the kommune on the plans on these apartments?
- Could it ever be reverted to full-ejerlejlighed without kommune-dependencies?

Thank you,
G

Yes, hjemfaldspligt means that the municipality will buy the apartment for a fixed price (usually a lot lower than the current market price) i 2050.
Therefore the apartment is essentially worthless in 2050, which the pricing naturally should reflect.
If the entire building or so can agree, you can usually buy your way out of this, but this is of course quite expensive.

Be very very careful with these. To answer your questions:

- Is this deal the reason why the initial apartment price is a bit lower?

Yes. When you basically have to handover your property to the owner of the contract (most often the commune) in the future then of course the property is worth less than it would be if you owned it perpetually.

- Does it/will it have an effect in selling price in the future ?

Yes, the closer you get to the date of having to hand the property back, the less someone is willing to pay for it. As an example, imagine that you were to sell the property 1 year before the commune buys it back. It would be worth basically 1 year of rent + the buyback sum from the commune (which is almost always extremely low).

- Is there any information from the kommune on the plans on these apartments?

Not that I know of but you can always ask them. I think that almost all properties with this status can be purchased out of this contract. The buyout sum will be estimated based on the sum the commune have to pay to buy the apartment back, the market value and the years left on the contract.

- Could it ever be reverted to full-ejerlejlighed without kommune-dependencies?

Yes, but as mentioned you have to buy the commune out of their right to the property.

I do remember some cases where people cried their eyes out about this but as I recall they got no early Christmas presents from the commune. It has also been tried at court and the communes won the case. They do have the right and it is not going away (unless you buy them out).

When all is said and done these properties are tricky. Because you might be able to find a property at a good price, even if you are basically only renting the place for X amount of years at that price. You might also be able to find good properties where the asking price + the buyout of the commune is still a decent overall price.

But it is obviously a quite complicated task to determine so in general you should probably assume that there is no bargins to be made with these properties.

Also note that the price the commune has to pay to get the place back can vary. Quite often the price is the sales price from many years ago, meaning that it is a very small sum of money compared to the market price. Sometimes they have to pay extra for buildings constructed after the original sale and sometimes they don't.

It is not an easy part of the market to navigate in for sure so I will repeat. Be very very careful.