What is a homeowners’ association (VvE)?
An apartment building intended to be lived in by different people is always divided by notarial deed into separate apartment rights. An apartment right is the legal right to exclusive use of a specific private section within a larger apartment building, combined with joint ownership of the building as a whole.
When a building is divided into apartment rights, the residents are legally required to establish a homeowners’ association (VvE), whose task is to manage and maintain the communal parts of the apartment complex (think of the roof, facade, lift and so on).
The VvE also manages the joint finances, such as collecting the periodic contributions from the apartment owners and building up a legally required reserve fund for maintenance of the building.
The latter is usually done on the basis of a long-term maintenance plan (MJOP). This plan sets out which maintenance work is needed in the short and long term, and what financial resources must be reserved for it through part of the periodic contribution. If there is no MJOP, a VvE is legally required to reserve at least 0.5% of the rebuild value of the apartment building each year for repairs and maintenance.
The VvE must also arrange a number of insurance policies for the building, including, for example, buildings insurance and glass insurance.
Based on the above, the VvE is responsible for processing all financial flows and for reliable financial reporting on them through annual accounts and an annual budget. These financial activities are often outsourced to an external administrative manager, but they can also be handled in-house.
As an apartment owner, you are automatically and compulsorily a member of the VvE.