Reserves when selling a flat: What happens to them?

As a flat owner, you are legally obliged to pay reserves for the maintenance of the building. What happens to these reserves when you sell the flat?

Do they go to the buyer or are you entitled to the money you deposited? I would like to answer this question in this article. First, however, I will explain to you what the reserves are used for.

What do you pay the maintenance reserve for?

As a condominium owner, you are part of the condominium owners' association. Together with the other owners, you have to maintain the building. Apart from the maintenance reserve, as a condominium owner you do not have to pay in any other reserves.

The maintenance reserves serve to cover the costs of:

• Foreseeable, larger costs: If, for example, costs are incurred for a renovation of the roof, these are covered by the maintenance reserves.
• sudden expenses for repairs: if the boiler breaks down, the repair can be paid for with the reserve money.

Expenses for maintenance or repairs can, but do not have to, be paid with the reserves. It can also be used to pay only a part of the bills.

What happens to the reserves when the flat is sold?

When you sell your flat, the reserves are transferred to the buyer. You cannot claim the repayment from the owners' association.

However, you have the option in advance to have the reserve contribution you have made included in the sales price. After all, high reserves mean a certain security for the potential buyer.

You and the buyer can ask the property management how much money is in the reserve account of the owners' association and how high the expected maintenance costs are.

When do the reserves pass to the buyer when selling a flat?

As soon as the property - in this case the flat - has been transferred to the buyer, the maintenance reserve is automatically transferred to the buyer.

In concrete terms, this means that once the purchase contract has been signed by both parties and certified by a notary, it is entered in the land register. Once this has been done and all taxes and fees have been paid, the buyer is the new owner of the flat.

Conclusion: Transfer of reserves to the buyer can be compensated by higher sales price

If you sell your flat, you as the seller are not entitled to the payment of the reserves you have paid. If you already have a large maintenance reserve in the account of the owners' association, this would mean a financial loss for you.

An increase in the selling price is a good idea in such a situation. However, you should in any case make sure that you do not set the selling price too high, because this can lead to you having to sell your flat below value.

You can read how this is meant in the blog article "With and without an estate agent: How not to give away money when selling a house". There you will also find instructions on how to set the right selling price.

If you still have questions about reserves when selling a flat, or need help selling your condominium, my team and I are here to help.

As a real estate agent in Tyrol, we can advise you comprehensively with our specific market knowledge, especially regarding the right selling price. You can reach us by phone(+ 43 512 580 242), by e-mail(immobilien@arealita.at) or via our contact form.

With kind regards

Yours, Bernhard Großruck

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