The association of co-owners has decided to have works carried out in the building, a project that requires a plan and resources. A loan for co-ownership, the solution to finance everything? Analysis and tips.
The building you co-own will sooner or later need a makeover, major or minor renovation work. In addition to the urgent repairs at breakdowns, there are also works that you can plan. Start by comparing different offers that suppliers provide. This gives you an idea of how much you should subsequently borrow.
Working decided by the association of co-owners: everyone pays
Who owns an apartment has rights and obligations. As a co-owner you must comply with certain rules of co-ownership , such as the compulsory participation in the financing of works on the building.
Which one? It is mainly about:
- renovations to save energy
- work to ensure safety
- modernization works
- embellishment work
These are all projects that require larger budgets . It should certainly be emphasized that the renovations that result in energy savings are ultimately financially beneficial. Just think of better insulation or the replacement of lighting with LED lamps. Such a change will entail lower costs in the long term and all residents will enjoy the building. But first there must be invested.
How to finance large works as co-ownership?
A building loses value when repairs take too long or when there are too many temporary solutions. We are not talking about the tensions when some co-owners have to advance money to others. These are not ideal conditions for having renovation work carried out.
Co-ownership can decide to tackle the problems thoroughly, to proceed according to plan and even to apply for a loan .
A loan has its advantages:
- when the reserve fund, mandatory since 1 January 2019, appears to be insufficient ;
- for some co-owners the contribution was not foreseen
The co-ownership credit appears to be a good solution and also exists in two forms:
- it is a loan taken out by the joint ownership syndic ;
- or a renovation loan that a co-owner takes out individually when he or she wants to finance the own contribution.
5 tips for cost management of joint ownership
Every building must undergo repair work sooner or later. And then the co-owners usually request a cost estimate through the syndic or contractors. As a co-owner, how can you reduce the financial burden for everyone?
- Compare the contractors: choose the contractor who can guarantee the best price-quality ratio. Whoever invests in quality will always have financial benefits in the long term. If in doubt, ask for references to the prospective contractors.
- Choose a contractor who works with a warranty : on some works a 10-year warranty applies. Claim this guarantee too.
- Plan the works at a good time. For example, window frames should not be replaced in the winter. This way you avoid a large loss of heat and a substantial increase in heating costs.
- Apply the saying ” prevent better than cure”. This starts with regular maintenance of the common parts and the building itself. There are enough bad examples: a hasty repair will often cost more in the long run.
- Ask about the possibilities of regional subsidies and premiums. In Brussels and Flanders there is a renovation premium and in Wallonia an energy and renovation premium.
A loan taken out by the syndic, a solution for all co-owners?
The biggest advantage of the co-ownership credit is that it is taken out by the syndic and not by the co-owners. The participating co-owners are therefore not involved in the repayment of the individual contribution to the joint credit.
In addition, such a centralized loan in the hands of the syndic has other benefits:
- only the interested co-owners participate in the credit
- the repayment period is flexible and can go up to 10 years
- the credit can go up to an amount of € 500,000
- the interest rate is cheaper than the usual market rates
- this credit is not registered with the National Bank, which does not jeopardize the borrowing capacity of the co-owners.
Good Finance proposes the co-ownership credit . That is a flexible solution for financing from 30,000 euros. And without the obligation to take out insurance. Some banks impose mandatory insurance to protect co-owners against defaults from other co-owners. Inform yourself!