The draft budget is prepared by the syndic and then voted by the meeting. It is used to anticipate day-to-day expenditure. Calls for funds cannot, however, be made in just any way: the grand-ducal regulation lays down rules for advances at the start of the financial year, quarterly advances and special advances. Since 2023, the works fund is in addition a separate compulsory annual contribution.
Who prepares and who votes the budget?
The syndic prepares the draft budget. The general meeting votes it. (RGD du 13 juin 1975, art. 24)
The budget vote requires a majority of the votes of the co-owners present or represented, since no different special majority is laid down for that decision. (loi du 16 mai 1975, art. 15)
How do you get from the budget to the calls for funds?
The regulation distinguishes several mechanisms.
At the start of the financial year, the advance requested may in principle not exceed one quarter of the voted draft budget. Where the co-ownership rules make no provision for a permanent cash advance, that advance may reach half the budget. During the year, quarterly advances may be requested, each up to one quarter of the draft budget. Special advances may also fund particular decisions, in particular works. (RGD du 13 juin 1975, art. 25)
These ceilings give a concrete framework to a co-owner trying to make sense of an unusual call for funds.
Does the budget match the final expenditure?
No.
The budget is a forecast. The accounts then show what was actually spent.
That difference is why a co-owner may receive a balance after the accounts are closed, depending on the actual charges and the advances already paid.
How are the charges allocated?
The law provides that the charges for preserving, maintaining and administering the common parts are allocated according to the relative value of the private parts. For certain items of common equipment, a criterion linked to usefulness may apply. (loi du 16 mai 1975, art. 7)
Changing the allocation rules is not a mere budget vote. Save in the cases provided for by law, any change requires unanimity. (loi du 16 mai 1975, art. 8)
And the works fund?
Since 1 August 2023, the law provides for a works fund financed by a compulsory annual contribution.
The amount is decided by the meeting, and may not fall below the minimum set by the statutory annex according, in particular, to floor area and energy class. The contributions attach to the units and remain vested in the association: they are not refunded to the seller on a sale. (loi du 30 juin 2022 introduisant l’art. 11bis dans la loi de 1975)
The minimum amount appears in an annex to the law, which may be amended. It is therefore the version in force at the time of the vote that governs, and not a figure noted somewhere else a few years earlier.
Can interest run on an unpaid sum?
The regulation provides that sums due bear interest at the statutory civil rate from the formal notice onwards. (RGD du 13 juin 1975, art. 26)
Where are the sums paid held?
In an account opened in the association's name. (RGD du 13 juin 1975, art. 28)