Running Costs of Living in a New Build: Service Charges, Repair Fund and Building Management

Besides the purchase price and the mortgage repayment, the owner of a new-build flat pays regular advances for services, a contribution to the repair fund and a fee for managing the building. Their amounts vary with the size of the building, its facilities and the way it is managed, so it is necessary to find them out before signing the contract and include them in your monthly budget.

What makes up the monthly costs of living

The monthly payments connected with a flat are usually divided into several groups. Each has a different purpose and is settled differently.

• Advances for services – water, heating, lighting of common areas, cleaning, the lift, waste collection and the like. At the end of the period they are settled according to actual consumption.
• Contribution to the repair fund – a regular payment towards future repairs and investment in the common parts of the building.
• Fee for the manager or committee – payment for administration, accounting and technical supervision.
• Building insurance – the premium for the common parts is usually paid by the owners' association and is reflected in the payments.
• Your own expenses – energy in the flat outside the shared metering, internet, home contents insurance and, where applicable, a parking space.

When comparing offers, it is not enough to compare purchase prices alone. Two flats of the same size can have different running costs, for example because of the type of heating or the extent of the common areas. You can find an indicative overview of prices on the page new-build prices.

Advances for services: what to ask

A new-build often has not yet completed even one full year of operation. The amount of the advances is therefore based on an estimate and can change noticeably after the first settlement, both upwards and downwards.

• How the advances were calculated and what they are based on (the design, comparable buildings, the energy performance calculation).
• Which services are included in the advances and which you pay for yourself.
• How water and heat consumption is measured – by sub-meters, by cost allocators, or by floor area.
• What heat source the building uses and how its operation and servicing are arranged.

Keep a financial reserve for the first year. The initial estimate may not match reality, and it is better to have any shortfall covered in advance.

The repair fund: what it is for and how it is built up

The repair fund is a shared reserve of the owners. It pays for larger repairs and the renewal of common parts, for example the roof, façade, lift, utility distribution or entrance areas. The better funded it is, the less often extraordinary one-off payments or loans have to be considered.

In a new-build, the need for repairs is usually low at the beginning, because most parts are new and covered by a warranty. This is exactly why contributions are sometimes set low, which can be a disadvantage in the future. The reserve then has to be made up later, often through a sudden increase in payments.

Before buying, check:

• who proposed the amount of the contributions and how, and whether an outline of future repairs was drawn up,
• whether the contribution is calculated from floor area, from the share in the building, or in another way,
• who decides on the amount of the contribution and how it can be changed,
• whether the money paid in is settled in any way when the flat is sold (it usually stays in the building's fund).

Building management: the owners' association, the manager and responsibilities

Once the building is completed and divided into units, the owners take over its management. Usually an owners' association is formed, or management is entrusted to a professional company. At the beginning, management is often provided by a company chosen by the developer, which is common, but the owners have the right to decide on how to proceed afterwards.

• Management contract – find out how long it is concluded for, under what conditions it can be terminated and what exactly it covers.
• Manager's fee – check whether the price covers only basic activities, or also technical management, supervision of warranty defects or regular inspections.
• Voting and decision-making – familiarise yourself with the rules set out in the articles of association or the owner's declaration, and with how larger expenses are voted on.
• Accounts and transparency – how often you will receive a summary of the finances and who checks the building's accounts.

Have a lawyer assess the legal side of building management and the contractual documents before you sign. The general purchasing process is described in the buying guide.

Warranties, defects and how they affect costs

In the first years of operation, claims may arise concerning both common and individual parts. A properly handled claim can save considerable money, so it is worth knowing who records warranty defects and raises them with the developer.

• Ask who monitors the warranty periods for common parts and technologies.
• Keep the handover protocol and photographs of the condition of the flat.
• Find out how the developer handles the servicing of technologies (lift, ventilation, heat pump) after construction is finished.

Information on how particular companies behave after handing over buildings can be found in the overview of developers. You can compare specific buildings and their parameters in the project catalogue.

How to include the costs in your budget

When assessing a mortgage, the bank looks at the household's income and obligations, but the real burden is higher than the repayment. Add the regular payments for the building, energy and insurance, and keep a reserve for unexpected expenses.

1. Ask the seller for an overview of the expected monthly payments for the specific flat.
2. Compare them with similar buildings in the same location.
3. Calculate the repayment in the calculator and add the running costs to it.
4. Consult a mortgage specialist about the method of financing and the loan options.
5. Final step: align your monthly budget with what you are willing to pay even if costs turn out higher than expected.

If you are looking for a flat that matches your budget and requirements, you can use the housing inquiry form.

Frequently asked questions

Can the repair fund change after I move in?

Yes. The amount of the contributions is determined by the owners according to the rules of the building and changes with maintenance needs. For a new building, it is advisable to expect gradual increases.

What if the service settlement is higher than the advances?

The difference is paid in addition. That is why it is recommended to have a reserve in the first year and to adjust the advances after the settlement according to actual consumption.

Should I choose the building manager myself?

The owners decide on management together. Before choosing, compare the scope of services, the length of the contract and the conditions of termination, and have a lawyer assess the contract.