Country's homeowners' associations are becoming increasingly indebted and bankruptcies are increasing.
Rising fees and delayed renovations have become the norm – and many homeowners' associations are under intense pressure.
By the turn of the year, 370 associations had debts with the Enforcement Authority, according to a compilation from SBC. This represents a 298% increase since 2013, when 93 associations had debts at the end of the year.
Furthermore, 116 associations have been noted as having debts with the Enforcement Authority during the first quarter of the year.
Similarly, the number of bankruptcies among homeowners' associations has risen. In 2022, the number was 71, and last year it was 40. The average over the years 2013-2021 was 18 bankruptcies per year.
At the same time, there may be more reasons than just soaring costs leading to bankruptcy.
She stresses that it is important for homeowners' associations to increase their fees in line with costs. Her recommendation is to draw up a multi-year budget and an updated maintenance plan for the association.
To minimize risks, flat owners should look at the association's indebtedness and savings, explains Therese af Jochnick.
Checking whether the association owns the land is another important thing. Associations that hold the property with a lease are more economically exposed as the local authority can increase the lease fee. Liabilities, interest rates and terms and conditions are other things to keep an eye on.
