When you are condominium in a collective building, a set of formalities is included, simply because you become a co-owner of a dwelling. It is about the proper functioning of the condominium, the proper use of the premises and the good understanding between each co-owner. We talk to you today about annual expenses (or forecast expenses): what are they and who do they concern?
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Definition of annual forecasting expenses
Commonly, condominium charges, forecasts or annual charges are the costs due by all the co-owners and obligatorily paid each year e . These costs cover all expenses related to the proper functioning of the condominium.
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The participation of the co-owners will be proportional to their share in the condominium . This is, in other words, the value of the lots of the co-owners. A lot consists of a private part and the part relating to the common areas.
How are the condominium charges fixed?
Each year, the forecast budget is prepared by the trustee of condominium and sets the annual costs of condominium. This forecast budget has traditionally been voted by theGeneral Meeting within 6 months of the last day of the previous accounting year.
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The forecast budget may include, for the coming year:
- All expenses (or future expenses) of operation of the condominium;
- All maintenance expenses of the condominium;
- All the expenditure on theday-to-day administration of the common areas and of the common equipment present on the condominium;
The forecast budget indicates the planned spending and will serve as the basis for calculating the expenses charged to co-owners. A forecast budget may of course be below reality: it will not be able to cover the full costs of the condominium and may lead to difficulties in payment.
The condominium regulation defines the calculation of the distribution of expenses among all co-owners. It can therefore be amended only by unanimous vote. For this it is necessary to convene an extraordinary general meeting .
Charges of condominium: why forecasting?
Condominium expenses are usually charged to co-owners at the beginning of each quarter. This corresponds to the payment of provisions on charges. This is a quarter of the forecast budget (one year is divided into 4 quarters). The purpose of the provisions on expenses is to spread the expenditure over the year and to anticipate the budget that will come out.
It is therefore an estimate of the expenses and not the actual costs incurred in the work, maintenance, administration and maintenance of the condominium and the building . Sometimes, if the general meeting takes a vote in this direction, provisions on charges may be requested by semester or month.
Projected expenses are adjusted at the end of each year, based on actual expenditures related to condominium. Provisions on charges may be insufficient. In this case, the co-owners must pay an additional charge. If, on the contrary, the provisions on expenses are too high compared to the actual condominium expenses, an overpayment will be attributable the following year.
What Condominium Costs Include
General and special charges are identified and included in the forecast budget.
General expenses : costs of conservation, maintenance and administration of the common areas of the building/condominium. Cleaning, lighting, water, electricity of common areas, etc.
Special charges : operating costs of communal services and common equipment: collective heating, elevator, etc.
The calculation of special loads is proportional to a so-called use “real”. For example, someone who owns a dwelling on the 12th floor will pay more charges than a person who owns the ground floor. The amount of the condominium charges is then asked to the tenant if the charges are unclusty.