Service charges include all the operating costs necessary for the administration and maintenance of the building.
Routine Expenses
Routine Expenses are the essential expenses that the Management Company regularly incurs for the conservation and maintenance of the common areas of the building. These include expenses related to the maintenance of the common areas, insurance premiums, energy costs, staff remuneration, payment of maintenance contracts and management fees.
Exceptional expenses
Exceptional expenses are expenses voted by the co-owners as part of major maintenance and improvement work on the building.
Unlike routine expenses, these are intended to finance exceptional works, for example a roof repair, painting of common areas or a facade renovation (non-exhaustive list). These expenses are not included in the routine budget of the building, since they are not intended to be paid each year, but in an ad hoc manner, on a case-by-case basis, according to the decisions voted in the general meeting.
The ALUR Works Fund
The works fund, governed by the ALUR law of 24 March 2014, is a compulsory contribution for all partially or fully residential buildings, i.e., the majority of co-ownerships. Its purpose is to be funded each year by the co-owners in order to anticipate the financing of future work expenses in the building.
The amount of the budget allocated each year to this fund is decided and voted by the general meeting of co-owners. Please note that this amount cannot be less than 5% of the total annual budget of the building.
There are, however, exceptions to the establishment of such a fund:
- Buildings with less than 10 units and where the residents association has unanimously decided not to establish the fund by a vote in general meeting;
- Buildings completed for less than 5 years from the date of receipt of the work;
- Buildings for which the global technical diagnosis (diagnostic technique global or "DTG") shows no need for work for the next 10 years;
- Buildings for which the work fund, after regular credited payments, had reached or exceeded the amount of the estimated annual budget. Depending on the multi-year work plan put in place to use this work fund, the general meeting may decide to suspend the contributions.
The contributions paid to the ALUR works fund by each co-owner are attached to the units and not to the co-owners: these contributions therefore remain vested in the co-ownership and are not reimbursed by the association in the event of the sale of a lot.
The use of this work fund is strictly regulated by law. The latter can only be used for work not included in the estimated budget and which is decided by the general meeting of co-owners such as:
- Conservation or service work on the building, other than routine maintenance;
- Work on elements of common equipment, other than routine maintenance;
- Improvement works, such as the transformation of one or more existing equipment elements, the addition of new elements, the development of areas for common use or the creation of such areas, the scouring of the ground and the raising of building height;
- Technical studies, such as diagnostics and consultations;
- Work that does not contribute to the maintenance and administration of the common areas or the maintenance and operation of the common equipment of the building.
Also concerned are the works carried out urgently for the safeguarding of the building, ordered by the Management Company without the approval of the general meeting.