VvE is short for Vereniging van Eigenaren (Association of Owners) and is an umbrella body that represents the common interests of all owners in a residential building. But what does a VvE do exactly? What is the difference between an apartment and a house? And what should you look out for when buying a home? We answer your questions in this article. Learn more about important documents relating to the VvE and the importance of a ‘sleeping’ or healthy VvE on your mortgage application.
- What is the difference between a house and an apartment?
Did you know that 88% of all homes in Amsterdam are apartments? This means that only 12% of homes are single-family homes. When you buy a single-family home, you become the owner of the whole. In other words: from the foundation to the roof, including the contents and (possibly) the garden. Are you buying an apartment? Then you buy a share in the building. Everything in the apartment is yours, but the outside – also called the casco or hull – belongs to the VvE.
- What does a VvE entail?
When buy an apartment, you automatically become a member of the VvE. This association is responsible for the management and maintenance of the building and common areas, such as stairwells, elevators or communal roof terraces. It thus promotes the common interests of the owners living in the building. In addition, the VvE – its board or a committee appointed by the board – draws up internal regulations or rules of life. The board is elected from amongst the owners during a meeting of all members (AGM). Has a decision been made? Then all residents of the building must abide by this.
- Which documents are required when buying an apartment within a VvE?
Do you live in a multi-owner building? Then the building is split up and all owners are registered separately at the Land Registry. Your rights and obligations as the owner of the apartment can be found in the division deed (splitsingsakte) and the division regulations. Before you buy an apartment, you can ask for these documents at the selling agent or the Land Registry. There are other important VvE documents you should check when buying an apartment, such as:
- Recent annual financial reports and AGM minutes of the VvE
- Long-term maintenance plan (MJOP)
- Insurance policies House rules (Huishoudelijk reglement or HHR)
- Please note: not all of the above documents are drawn up by every VvE. Some are mandatory, such as a deed of division and home insurance. Other documents are not, such as house rules or an MJOP.
- What do I have to look out for regarding the VvE?
There is a lot to consider when buying a new home. Take the time to read all documents carefully, in particular the VvE documents. For example, it is wise to check who manages the VvE and to go through minutes of the last meetings. It is also a good idea to check whether there are funds set aside for future maintenance and how it much. A sizeable reserve means that you do not have to deposit extra money in the event of (unforeseen) maintenance issues. Look carefully at the ratio between reserved funds and expected costs. For example, a VvE may have € 100,000 set aside for future maintenance. That sounds like a lot of money, but when there are a hundred apartments in the building, the amount per home is relatively low. Also take a good look at the maintenance plan and house rules. The maintenance plan states what maintenance will be carried out in the near future. The house rules provide more clarity about, for example, whether renting out the house is allowed.
- What about the mortgage application?
Are you going to buy or sell an apartment? Then check whether the VvE is healthy and active. If that is not the case, this can create challenges when applying for your mortgage financing. Since January 2018, a VvE must have an up-to-date maintenance plan. No plan? Then the owners must save 0.5% of the rebuilding value per year. A healthy VvE must also meet at least once very few years and keep a (financial) administration.
When selling, this is part of a good preparation: make sure that the above documents are immediately available so that a buyer can go through the financing process more easily – which will make it easier for you as a seller to conclude the sale.
In practice, it appears that not all owners are aware of the rights and obligations that a VvE entails. At Von Poll Real Estate, all brokers know the latest developments and will – of course – point these out to you when buying or selling your home.
Personal adviceAre you thinking of buying or selling a house? Want to know more about matters such as the VvE?