Are you considering buying an apartment? Pay attention to the homeowners’ association (VvE). If things run smoothly in the VvE, you can avoid unexpected costs for overdue maintenance. The VvE situation can even influence whether your mortgage application will be approved.

When you buy an apartment, you automatically become a member of the homeowners association (VvE). The VvE looks after the interests of all owners in an apartment complex and takes care of the maintenance of the common parts of your building, such as the roof, window frames, and foundation. While many VvE’s function well, problems can arise. Knowing how the VvE operates before buying an apartment is important. Research by Vereniging Eigen Huis (in Dutch) shows that many apartment owners have an overly optimistic view of the VvE’s functioning beforehand. 8% of buyers stated they would not have bought the apartment if they had known how the VvE operates.

Homeowners association (VvE)

‘Sleeping’ VvE

Ideally, the VvE regularly discusses matters concerning the owners, such as maintenance or rules in the household regulations. For example, can you barbecue on the balcony or not? Sometimes, the VvE is inactive or dormant. In this situation, it’s often unclear what the maintenance status of the apartment complex is, and there may need to be more money set aside for maintenance. Suppose maintenance or a major repair is needed, such as fixing the elevator. In that case, you and the other owners must invest heavily, even if you have just recently become the owner of your apartment. Therefore, the VvE of the apartment you buy should ideally be active and financially healthy.

Read the minutes

Always ask the seller or selling agent how the VvE operates. Read the documents that provide insight into this, such as the annual meeting minutes, the building insurance policy, and the long-term maintenance plan (MJOP). Also, check if the VvE is registered with the Chamber of Commerce, which is mandatory.

Sufficient reserve

The MJOP includes the owners’ plans for long-term maintenance and the financial planning for the investments to be made. Legislation prescribes VvE’s to save at least 0.5% of the rebuilding value of the building annually. You can find the insured rebuilding value of the apartment complex in the building insurance policy. This calculation gives you an idea of whether there is a sufficient financial reserve. However, saving 0,5% of the buildings’value’ value is not guaranteed enough. And most VvE’s don’t even save the legal minimum amount, as research by housing market researcher Matrixian shows. Their data reveals that half of the VvEs save too little, partly due to rising maintenance costs.

Want to know more about buying an apartment? Read our article with even more detailed tips.

Financing problems

If there isn’t enough money for maintenance, you and the other owners will have to pay for maintenance or repairs yourselves. The municipality can even require your VvE to create and implement a maintenance plan in special situations. Make sure to check if the VvE of the apartment you want to buy functions well. This also affects getting a mortgage.

When applying for a mortgage, Viisi includes detailed information about the VvE of your prospective apartment. It’s important for both you and the lender that the apartment you buy is well maintained, now and in the future. For the lender, the apartment is the collateral for the loan. Lenders may reject the mortgage application due to the VvE’s status. Sometimes, additional information or preliminary discussions are enough to approve your mortgage application. Better safe than sorry!

Are you curious about the VvE’s impact on your mortgage application? Review it with us during a free consultation.

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