If you are looking to buy an apartment, chances are you will have to deal with service charges. These monthly fees can have a big impact on your financial situation, but what exactly do they entail? No worries: in this article, we'll take you step by step. We'll discuss everything you need to know about service charges, so you can be well prepared to visit your dream apartment.
Why are service charges at an apartment important?
Service charges play an essential role when buying an apartment. They affect three important aspects of your living enjoyment and financial planning:
- Your monthly expenses Higher service charges increase your total living expenses. It is important to know how much you are paying and for what.
- Building condition Well-maintained common areas increase the quality of living and prevent overdue maintenance.
- The value of your apartment Regular maintenance ensures that the complex maintains or even increases its value, which is important for your investment.
Important points of interest for the VvE and service charges
Are low service fees really attractive?
Low service charges seem favorable at first glance. But it may indicate that the Owners’ Association (VvE) is not saving enough for major maintenance. This can lead to overdue maintenance, unexpected costs and a less pleasant living environment.
Legal obligation of the VvE
Every CoE must be legally registered with the Chamber of Commerce (CoC). Is this not in order? Then the VvE risks a fine of almost €20,000. This fine is divided among all owners, which is a significant financial risk. Therefore, always check the CoC registration of the VvE.
Why a healthy homeowner’s association is crucial to your mortgage.
An active and healthy VvE is a requirement for banks to grant a mortgage. Why? Because a disorganized CoE carries financial uncertainties. A well-functioning CoE provides stability and lowers risks for both you and the bank.
What exactly does service charge in an apartment mean?
Service charges are monthly contributions you pay to the VvE. These contributions are used for:
- Maintenance of common areas (e.g. hallway, elevators, garden).
- Energy costs for common areas, such as lighting.
- Building insurance, which covers damage to the building.
- Reserve fund, intended for major maintenance such as painting or roof renovation.
By jointly covering these costs, the CoE ensures a well-maintained building without unpleasant surprises.
What do service charges consist of?
The exact composition of service charges varies from complex to complex. Here are some common cost items:
- Maintenance of common areas Consider cleaning, garden maintenance and elevator repair.
- Energy costs Electricity costs for lighting, elevators and other facilities in shared areas.
- Insurance Building insurance covers damage to the building from such things as fire or storms.
- Reservation Fund This is essential for major maintenance. A well-stocked fund prevents owners from having to pay large sums unexpectedly.
How are service charges determined?
The amount of service charges is determined by the VvE, usually on the basis of a fractional share. This means that your share is calculated based on the size of your apartment. The larger your apartment, the higher your contribution.
How can you control the VvE and service charges?
When viewing an apartment, it is crucial to examine the VvE documents. Below are the most important steps:
1. Check the reserve fund
Make sure the association has a well-stocked reserve fund. This shows that the association is prepared for major maintenance.
2. Review future plans
Check if there are any major projects planned, such as renovations or preservation. These plans may increase your service costs.
3. Analyze financial health
Request financial statements and financial reports. This will provide insight into how the CoE is managing its finances and if there are any debts.
4. Check the subdivision deed
This contains the rights and obligations of all owners. Make sure you understand these well to avoid surprises.
5. Check the Chamber of Commerce registration
A properly registered CoE prevents legal and financial problems.
Common pitfalls with service charges and VvE
- Overdue maintenance A poorly maintained building can cause unexpected costs.
- Lack of transparency If the CoE is not transparent about its costs, it can create uncertainty.
- No active VvE This could jeopardize the financeability of your apartment.
Conclusion
Service charges are an indispensable part of buying an apartment. They affect your living comfort, financial situation and the value of your home. It is essential to thoroughly check the CoE and its documents before making a decision. That way you avoid surprises and know exactly where you stand.
Frequently Asked Questions
1. What happens if the CoE does not set aside enough?
Insufficient reservation can lead to overdue maintenance and unexpectedly high costs.
2. Are service charges tax deductible?
No, service charges are generally not deductible for individuals.
3. Can I influence the amount of the service charge?
As an owner, you can vote on the budget at CoE meetings.
4. What if the CoE is not functioning properly?
A poorly functioning CoE can negatively affect the value and financeability of your apartment.
5. How do I know if my service charge is reasonable?
Compare the costs with those of similar apartments and check the expenses of the CoE.
