apartment (condominium?) accounting

[DaveC49]

HI Bram,
This website
(http://www.expatica.com/nl/housing/Buying-a-house-in-the-Netherlands_100633.html)
had  a section on buying an apartment in the netherlands as follows

Concerns when choosing an apartment in the Netherlands

When you buy an apartment, although you own the flat itself outright, you
only own a share or a leasehold in the building and/or the land it stands
on. As a result, buying an apartment can be more complex than buying a
freehold property.

In the Netherlands, each apartment building is managed by an owner's
association called a Vereniging van Eigenaren (VvE). These are responsible
for general repairs and maintenance and may be well or poorly run, or even
go into debt. As a member, you will be responsible for your share of that
debt, so it is important to check into the status of the VvE before
purchase.

Further terms and conditions relating to the shared spaces will be laid out
in the property division regulations (splitsingsreglement) which should be
included with your documentation at the time of transfer.

Further information on the HOA is given at
http://www.verenigingvaneigenaren.nl/. 

As Liz pointed out above, how to record this depends to a large extent upon
the legal status of the HOA under Netherlands law. From the above site, it
would appear that this is at least similar to Australia in that the HOA
collects fees from the owners on a periodical basis and appears to be a
separate legal entity. I would check with a solicitor/lawyer about that and
your rights with regard to the HOA. 

I have encountered situations with self managed Body Corporates in Australia
which are run to the rules of whoever has the biggest mouth and some of
those rules are sometimes illegal under the Body Corporate Act which
regulates strata ownership here.

In Australia, once collected those fees become the property of the Body
Corporate (our name for a HOA) as a separate legal entity and it would
appear to be similar to the Dutch case in that you only remain a member
while you own an apartment and you have voting rights in the HOA with regard
to decisions by it. Those fees would normally only be returnable to the
owners if the Body Corporate is dissolved legally and ceases to exist and
then only to the owners at that time. This again will be dependent upon the
local laws.

I normally record my BodyCoprate Fees (which are an aggregate of funds to
cover operations of the body corporate, insurance etc and a fund for
maintenance and long term repairs) as an Expense (i.e. a debit to my bank
account for the amount of the Fees and credit an appropriate Expense account
for the same amount.  

You would normally only have to account for the individual components and
their expenditure if you were doing the accounting for the HOA as its
financial officer. 

You should receive a copy of the financial statements (or at least request
them) during the sale process and whenever they are required to be provided
under the local law in the Netherlands. 

David Cousens



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