All you need to know about owner’s association or a VvE in Amsterdam

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All you need to know about owner’s association or a VvE in Amsterdam

What is VvE?

VvE stands for “Vereiniging eigenaars” in Dutch and means literally “association of owners”. It’s very important to inform yourself about the VvE owner’s association when you own or are looking to own an apartment in the Netherlands. All apartment owners throughout the country automatically become members of the VvE upon purchase of their new apartment. This entails collective ownership of the building that the apartment is located within. You must abide by the VvE’s rules and regulations, it’s not possible to opt out, and the only way to cancel your membership is by selling the apartment.

What is managed by a VvE?

Building maintenance and the owners’ communal interests are managed by the VvE, including but not limited to topics such as maintenance, renting out your apartment, rules for renovating, and insurance. Non-compliance (non-payment of the mandatory financial VvE contribution, building or renovating without permission, etc.) can result in the loss of the apartment as the worst case scenario since the rules and regulations set forth are legally binding.

All rules are described in a deed of division and/or household regulations. The most commonly used models within the “splitsingsakte” deed of division are Modelreglement 1973, 1983, 1992, 2006, and 2017, which all continue to apply even when newer versions become available. Different and additional rules are and can be applied to individual VvE’s within the deed of division and “splitsingreglement” property division regulation, so it’s vital that you inform yourself of which regulations apply to your apartment. Do you have any plans for your apartment? Inform your real estate agent before buying a new home in Amsterdam.

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Private vs professional?

VvE’s are governed by a board, meetings are held periodically, and each member (apartment owner) has the right to vote. The number of votes one owner has is described in a deed of division. The VvE can be handled either privately or professionally, each having their advantages and disadvantages. In case of privately handled association apartment owners must take care of all tasks themselves. However, it might be easier, for example, to get permission to renovate since you are only dealing with your neighbours. Small associations are usually handled privately, dividing tasks among members. Professional handling is usually a bit more expensive and it may take longer to get permission to do things such as renovation. However, it requires much less work on your end. Large associations are usually handled professionally.

The new law applicable from January 1st 2018

The municipality of Amsterdam introduced a new law that changes a minimum amount that must be added yearly to the reserves for maintenance of the building. Every association is obligated to save up at least 0.5 % of the rebuilding value of the building every year into their financial reserves. The exact amount should be defined based on a maintenance plan. A maintenance plan defines which part of the building should be maintained, when and what the expected costs will be. The aim is to save up regularly for bigger maintenance and this way prevent large one-off out of pocket expenses.

Is my association of owners “healthy”?

Agents commonly refer to a properly running association as being “healthy”. Following are basic requirements for an association to be running smoothly:

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Investigate the VvE before buying a property
  1. VvE is registered in the Chamber of commerce (kvk).
  2. Members have/save up enough money in reserves for big maintenance
  3. There is a maintenance plan no older than 5 years
  4. The building is properly insured (opstalverzekering in Dutch)
  5. Members meet at least once per year and keep minutes of the meeting
  6. During each meeting, members discuss and update the maintenance plan and make a budget for each year keeping financial situation transparent

The amount that is available in reserves for big maintenance and the way a VvE operates will have an influence on the appraisal report when securing a mortgage on a property.

Do you have any questions or comments about this article, feel free to contact us!

 

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