The housing company's hidden debt

The debt-free price looks final, but it is only the starting point. The true total burden also includes your share of future repairs, which show neither in the price nor in the monthly charge. Here's how to calculate it.

Three layers of debt

The buyer of a housing company share inherits three different kinds of debt:

• The visible company loan — the share of the company's loans attached to the flat. Included in the debt-free price.
• Your share of future repairs — your share of the renovations listed in the long-term plan. Does not show in the debt-free price.
• The underfunding gap — if the repair fund doesn't cover the coming works, the difference is met with a special charge or a new company loan.

How to calculate the total burden

A rough but illustrative formula:

Example

Debt-free price €120,000. The company's ten-year plan totals €900,000. The flat is 55 m², the company 3,000 m² → a share of 55/3,000, about 1.83 %.

The difference is €16,500 — over 13 % on top of the price. That is what decides whether the deal makes sense.

When a special charge is coming

Compare the repair fund with the coming works. If the fund covers only a small part (as a rule of thumb under 20 %) of the next few years' renovations, the difference will almost certainly be financed with a special charge or a new company loan. It doesn't show in the current charge — but it will fall to you to pay.