CONDOMINIUM EXPENSES: HOW THEY ARE DIVIDED

In order to live in a condominium that guarantees good living conditions, all the owners have to contribute financially to achieving this goal.

However, there are many doubts about how condominium expenses are divided.

The first thing to understand is that there are common condominium expenses, which cover services of interest to all the owners. Then there are expenses that only apply to some owners, others for the upkeep of common areas for the exclusive use of one owner and the contribution to the condominium's common reserve fund.

In other words, in some condominiums, not all the owners pay all the condominium expenses. It is only after the budget has been approved at the meeting that the administrator informs each owner of the amount they have to pay in dues. The condominium fees take into account the value of each fraction and the share of the building's expenses.


The three categories of condominium expenses

Common condominium expenses

The common expenses of the condominium cover all charges for the upkeep and proper functioning/use of the common areas of the building. These expenses include

The common expenses of the condominium cover all the charges for the upkeep and proper functioning/use of the common areas of the building. These expenses include

Expenses applied only to some condominium owners

According to the Civil Code, article 1424, there are condominium expenses that are only the responsibility of certain owners. In other words, when it comes to setting the budget, owners who don't take advantage of certain facilities don't have to pay for them in their condominium fee.

These expenses include, for example

Access ramps and lifting platforms for residents with reduced mobility. This cost is borne only by the tenants who use them.

If there are stores in the building that have independent water and electricity meters, they may not share in the condominium's water and electricity costs.


Maintenance costs for common areas used exclusively by one owner

In some buildings, there are common areas for the exclusive use of a single owner. To understand this better, imagine that on the top floor of the building there is a terrace that serves as a roof for the units of other owners in the building, but which is used exclusively by one owner.
In a case like this, when work has to be done to ensure the state of repair of this common part, it has to be ascertained whether or not the damage is attributable to the condominium owner who has exclusive use of it.

If the damage is proven to be caused by the wear and tear of the materials over time, the cost of repair is the responsibility of all the owners, in proportion to the value of the unit. However, if the damage was caused by the owner who has exclusive use of that part of the building, it is up to him to bear the cost of repair.


Contribution to the condominium's common reserve fund

Apart from the expenses listed above, all owners must contribute to the condominium's common reserve fund, in accordance with Article 4 of Decree-Law no. 268/94 of October 25 (taking into account the updated Law no. 8/2022 - Diário da República no. 6/2022, Series I of 2022-01-10).

The condominium's common reserve fund is a kind of savings account that is intended to finance essential maintenance work to keep the building in good repair. These works can include aesthetic, safety and health interventions.

In terms of charges, the amount to be paid into this fund is already included in the condominium fees, regardless of the frequency of payment. However, according to the law, each condominium owner must contribute at least 10% of their share of the remaining condominium expenses. This is the only way to build up and feed the reserve fund that guarantees the most expensive maintenance of the building you live in.

However, the contribution to this fund can vary depending on what is stipulated in the condominium's internal regulations.

As a general rule, the mandatory minimum is 10% of the budget, multiplied by the permillage of your autonomous fraction.

In an annual budget of 8,000 euros, if the contribution to the fund is 10% (800 euros) and the permillage of your unit is 30%, the contribution would be 240 euros.

However, if approved by a majority of the owners at the meeting, the internal regulations can stipulate that the owners contribute equally to this fund.


How are condominium fees calculated?

For each condominium owner to know how much they are going to pay in condominium fees, they need to identify all their expenses and income in order to create the annual budget map. In other words, the budget map should include interest income from savings accounts, rents from common areas, common expenses for the condominium and other expenses that are only the responsibility of some owners. At the end of these calculations, the contribution to the condominium's common reserve fund must be added.

Once the budget has been approved by the meeting, it is then up to the administrator to inform the owners of the amount of their condominium fees, based on the value of each fraction's share and the expenses for which they are responsible.


The formula for calculating condominium fees is usually as follows:

Condominium fee = Annual budget x (fraction's permillage / 1000) 


Assuming that the annual budget is 35,000 euros and your share is 30 per thousand. To find out how much you will pay, you need to do the following calculation:
35,000 euros x (30/1000) = 1,050 euros - This is the annual fee. If you're paying monthly, divide this figure by 12, and you'll find that your quota is 87.50 euros per month.



Source: https://www.doutorfinancas.pt/