Working fund set up in condominiums
Verified 01 January 2024 - Legal and Administrative Information Directorate (Prime Minister)
Condominiums must set up a work fund to finance future work expenses. This fund is financed by a compulsory annual contribution paid by each co-owner. The trustee must open a specific bank account to pay the contributions. The use of the sums must be voted by a majority of all co-owners. The amounts paid cannot be recovered by a co-owner who sells his lot.
The work fund is a financial reserve for the joint owners' union.
It shall be used to finance expenditure arising from:
- Preparation of the draft multiannual work plan (MWP) and, where appropriate, the global technical diagnosis (GTD)
- Completion of the work provided for in the TPP adopted by the General Assembly of the Co-owners
- Work decided by the condominium trustee in case of emergency
- Work necessary to safeguard the building, to preserve the health and safety of the occupants and to achieve energy savings, not provided for in the TPP
The general meeting may decide to allocate all or part of the sums deposited on the work fund to the financing of these expenses. The vote shall be by the same majority as that applicable to the expenditure concerned. This allocation must take account of the existence of special common areas or load distribution keys.
The joint owners' union must establish a building fund when the building is intended for total or partial residential use.
This fund must be set up at the end of a 10-year period from the date of reception construction work on the building.
The obligation to set up a work fund concerns:
- Since 1er january 2023, the syndicate of co-owners comprising more than 200 lots for use in dwellings, offices or shops
- Since 1er january 2024, the syndicate of co-owners comprising a number of lots included between 51 and 200 lots for use in dwellings, offices or shops
Warning
The creation of a work fund will become an obligation for the union of co-owners including 50 lots maximum from 1er January 2025.
The working capital shall be financed by a compulsory annual contribution from each co-owner.
Minimum annual contribution amount
The minimum contribution amount varies depending on whether or not a TPP exists.
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Existence of a TPP
Where the General Meeting has adopted a TPP, the annual contribution may not be less than:
- 2.5% the amount of work foreseen in the adopted TPP
- and 5% of the provisional budget
However, the general meeting may decide on a higher amount. The decision must be taken by a majority vote of all the co-owners.
Absence of a TPP
Where the general meeting has not adopted a TPP, the annual contribution shall not be less than 5% of the provisional budget.
However, the general meeting may decide on a higher amount. The decision must be taken by a majority of the votes of all the co-owners (absolute majority).
Possibility of suspending contributions
The general meeting may decide to suspend contributions in 2 cases:
- Where the amount of contributions to the works fund exceeds the amount of the estimated budget
- And where the amount of the work fund exceeds 50% the amount of work foreseen in the adopted TPP
Create a separate bank account
The condominium trustee must open a separate bank account, paid in the name of the condominium syndicate, into which contributions to the work fund are paid without delay.
The bank account may be opened in a bank chosen by the liquidator or by the general meeting of the co-owners.
The interest generated by this account is definitively acquired by the syndicate of the co-owners.
No. Amounts paid into the work fund may not be recovered by a co-owner who sells his condominium lot.
Indeed, the sums paid are attached to the lots and, as soon as they are paid, enter definitively into the assets of the syndicate of the co-owners.
However, the buyer may decide to pay the seller an amount equivalent to these sums in addition to the sale price of the lot.
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