What is a maintenance reserve?
The maintenance reserve, also known as the repair fund, maintenance reserve or maintenance provision, refers to a financial buffer for owner associations. This results from monthly payments by all owners and is used for major repairs or renovations to the common property. The reserve is usually included in the house fees that you, as the owner, pay to the property management company.
What are the reserves used for?
The maintenance reserve may only be used for measures on the common property that serve maintenance or repair purposes. This includes modernization and insulation of the facade, roof repairs, a renewal of the heating system or replacement of the windows. Also, repairs in the basement or staircase and inspections of the elevator are paid from the reserve.
The residential building insurance, bills for heating oil or other costs that belong to the special property, however, are not paid with the reserve.
The amount of the reserve
Legal requirements regarding the amount of the reserve exist only for social housing. As a rule, the property manager calculates them and proposes them to the community of owners. In most cases, the location, condition, amenities, size, as well as susceptibility to repair of the property affect the amount. How the costs are ultimately distributed among the owners is decided individually by the community. For example, it is possible that everyone pays the same share or the amount is based on the square meters of each owner.
Good to know: If you rent out your condominium, you cannot pass the payment on to your tenants, but you can claim the maintenance reserve against tax.
Consequences of a reserve that is too high or too low
If the owners determine that the maintenance reserve was set too high, it is either reduced or they finance cosmetic repairs with the remaining money. It is not possible to reclaim the money – not even if you sell the apartment.
If the reserve is too low, a so-called special allocation is made. This means that each owner transfers a separate payment. Depending on the amount, the community may grant you an installment payment.
Your real estate experts in Hamburg and the surrounding area
If you belong to a community of owners, you have to consider a few things. We at WEISS IMMOBILIEN are at your side in Hamburg and the region and provide you with comprehensive advice. Please feel free to contact us with your request.