Buying an apartment involves more than just ownership of your living space. As an apartment owner, you automatically become a member of the Owners' Association (VvE). This is a legally mandated organization that represents the interests of all owners in a building. In this article, we dive deep into the VvE: what it entails, why it's important, and how to deal with it.
What is the Owners’ Association (CoE)?
The Owners’ Association is a collective of all owners of apartments in a particular building. When you buy an apartment, you buy not only your own space, but also a share in the common areas, such as the stairwell, elevator, and roof.
Legal basis of the association
When a building is divided into apartments, a division deed is drawn up. This deed regulates the division of the building into private parts (apartments) and common parts. Each apartment right automatically entails membership in the VvE.
Why an association?
The VvE takes care of the management, maintenance, and possible renovation of the common parts of the building. This prevents conflicts between owners and ensures that the building remains well maintained.
Documents when buying an apartment
When buying an apartment, you have to deal with three important documents: the title deed, the subdivision deed, and the subdivision regulations.
1. Property deed
This document is the official proof that you are the owner of the apartment. It states, among other things:
- The details of the buyer and seller.
- The selling price of the apartment.
- A description of the properties purchased.
2. Splitsakte
The subdivision deed legally divides the building into apartments and common parts. In it you will find:
- The boundaries between private and common areas.
- Each owner’s share of the building.
- The basis for distributing service charges.
3. Split Rules
The subdivision regulations contain the ground rules of the CoE, such as:
- How meetings are organized.
- What responsibilities the owners and the CoE have.
- Rules for the use of common areas.
Active and dormant CoE
An BoE can be active or dormant. It is required by law that an BoE be active, but in practice dormant BoEs are not uncommon.
What is a dormant CoE?
A dormant CoE has been established but is not actively functioning. This means:
- No monthly service charge.
- No maintenance reserves.
- No periodic meetings.
Risks associated with a dormant CoE
- No money for unexpected maintenance.
- Difficulties in selling an apartment.
- Risk of buyer rejection of mortgage applications.
VvE service charges
Service charges are the monthly contributions apartment owners pay for building maintenance. These fees can vary depending on:
- The number of apartments.
- The size of your share of the building.
- The state of maintenance.
What does the service charge cover?
- Maintenance: Painting, roof repairs, and cleaning.
- Insurance: Building insurance for the building.
- Energy costs: For common areas, such as lighting and elevators.
The Multi-Year Maintenance Plan (MJOP).
A crucial part of an active CoE is the Multi-Year Maintenance Plan. This document describes what maintenance work is needed and how much it costs.
Why is an MJOP important?
- Predictable costs: No unexpected financial surprises.
- Maintenance Planning: Ensures building is well maintained.
- Apartment value: A well-maintained building retains its value.
How is an MJOP prepared?
A structural engineer inspects the building and assesses the condition of:
- Roofing.
- Window frames and painting.
- Stairwells and elevators.
Activating a dormant CoE
If you are dealing with a dormant CoE, you can make it active again. This is especially important if you want to sell your apartment.
Steps to Activate a Dormant CoE
- Organize meeting: Involve all owners.
- Register with the Chamber of Commerce: Make the CoE officially active.
- Set up reserve fund: Start saving for maintenance.
- Have multi-year maintenance plan created: Have a clear maintenance strategy.
Selling your apartment with a dormant CoE
A dormant VvE can complicate the sale of an apartment. Mortgage lenders often require an active VvE. Is activating the VvE not possible? Then you can seek professional help to improve your chances.
Frequently asked questions about VvE
1. What happens if I don’t pay my service charge?
In case of non-payment, the VvE may take legal action and charge collection fees.
2. How often should an association meet?
At least once a year is required by law.
3. What are the benefits of an active CoE?
An active CoE ensures good maintenance, higher home value, and less financial risk.
4. Can a dormant CoE be dissolved?
No, an association cannot be dissolved just like that. It is an obligation when the building is divided.
5. How do I determine my share in the CoE?
This is determined by the fractional share stated in the division deed.
Conclusion
An Owner’s Association is essential to the proper management and maintenance of apartment complexes. Whether you are buying, managing, or selling an apartment, an active owner’s association is crucial for financial security and value preservation. Make sure you are well informed and take action when necessary.
