Bought an apartment? What about renovation costs?
Anyone who buys an apartment in a building of a certain age should bear in mind that it is best to keep an extra budget for possible renovation and/or maintenance work.
Are renovations needed in your building? And how will those renovations evolve over the years?
RENOVATIONS TO BUILDINGS MANAGED BY PROPERTY ADMINISTRATOR SYNCURA
We have seen a lot of investment in old buildings in recent years: roof insulation, double glazing, modernisation of lifts, etc.. However despite all that investment, there are still buildings where these crucial renovations have not been carried out yet.
But it is remarkable how that figure has dropped. According to the figures for renovation work carried out in the more than 900 residential buildings in Flanders and Brussels under the management of professional property administrator Syncura, there has been a drop in the total costs per annum spent on renovation work. For example, the renovation costs per building fell by more than 50% in 2017 compared with 2016. Also, the number of renovations dropped by 50%.
PLANNING TO BUY AN APARTMENT?
If you are considering buying an apartment, you should pay particular attention to the following points: has the roof been renovated? How old is the lift? Does the building have double glazing? What type of heating system does the apartment have? That way, you will be able to establish whether there will be a need to carry out major renovation or maintenance works in the near future.
Tip: Are many of the apartments in an old residential building for sale? If so, that may indicate an urgent need to carry out renovations. If the reserve fund does not cover all the costs involved, then that may mean the various co-owners having to provide the extra funding required.
RESERVE FUND
It is laid down by law that an association of co-owners (ACO) must have two bank accounts: one containing working capital to pay for day-to-day costs and the other as a “savings account” containing reserve capital. The reserve capital is earmarked to cover non-recurring expenses for jobs such as lift repairs or the renovation of the façade. As such it is the co-owners’ savings account for covering unexpected or major maintenance and repair costs.
GENERAL SITUATION IN FLANDERS
We have also seen a drop in the number of renovation projects carried out on the apartment buildings in Flanders and the budget spent on them. There are two reasons for that:
- A lot of renovations have already been carried out in Flanders. That is due to grants, technologies and energy standards. For example by 2020, all the roofs of both owner-occupied and rental properties must be insulated. In addition, from 2020 it will be mandatory for every home to have double glazing. We are generally getting on well but we must take into account that, for example, the roof, windows, balcony and suchlike only have a finite service life. After x number of years, extensive works will probably need to be carried out: replacing the roof, replacing windows, upgrading heating systems… Although we don’t know how long technologies are going to keep going. Naturally, maintenance costs will be ongoing.
- The demolition of old existing residential buildings and redevelopment projects has led to a lot of new construction projects in Flanders and Brussels.
CONCLUSION
We can generally conclude that Flanders is on the right track. We have already carried out many renovation projects and modernised many buildings in accordance with the new 2020 standards. However, you should always watch out when buying an apartment in an old residential building. That is why it is important to find out about any reserve fund held and future renovations. You will be able to obtain an overview of that information from the property administrator for the building.
If the building is managed by an efficient property administrator, then you can be sure that any mandatory renovations required will be scheduled and arranged in good time.
