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BRF raised monthly fees by 16% for next year

Is this normal? Can I protest?

wondering
post 10.Dec.2012, 08:05 AM
Post #1
Joined: 3.Oct.2011

Hi,

So I bought my apartment this year around April. So I have no historical data.

What has happened is that I received the notice yesterday that the Styrelsen or Board has decided to raise the monthly fees by 16% for the next year.

I am actually quite surprised by this sudden raise.

Is it possible that I can protest against this ?

Also on average how much does the BRF raise their avgifts every year ? Does anyone have any data ?
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Yorkshireman
post 10.Dec.2012, 08:34 AM
Post #2
Joined: 22.Nov.2011

The board of the BRF have the right to increase the monthly fee by however much they want. It is not uncommon there are significant increases. There is not that much You can do about it apart from move, talk with the other non-board members to find their opinion etc...

There can be a number of reasons for the increase, maybe they have rennovations to pay for, increased costs due to inflation, changed interest rates, increased loans etc... Or even just that they are bad at managing the finances ...a sign of that is a period of high loans/interest payments but low monthly fees ...sooner or later one must pay the piper.

Get your hands on the past years annual accounts, and AGM minutes, that will give you an indication of if they know what they are doing!

I can give My BRF as an example. We manage finances ok, have a policy of no new lending, not too low monthly fee, rennovations/improvements are paid for from the monthly fee excess according to a plan, existing loans are amortised according to plan ... last 2 years due to uncertainty with interest rate changes and improvement programs we kept the monthly fee the same (technically a reduction if inflation taken into account), and reduced it a total of 20% over the prior 5 years. Our AGM accepts each year proposals for the following year, improvements/wishes etc... and we also tell the residents the intention with regards the monthly fee. Everything is commented and voted on.
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Bender B Rodriquez
post 10.Dec.2012, 08:35 AM
Post #3
Joined: 25.Mar.2006

Didn't you check the yearly economic reports before buying?

The BRF can increase the fees as much as it need in order to not go bankrupt. It could be that they did some major work on the building this year, or that they had to renegotiate their loans.

You are a member of the BRF and thus have the right the vote at the board meetings. Didn't you attend the board meetings? That's where the economy of the BRF is decided.
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wondering
post 10.Dec.2012, 08:49 AM
Post #4
Joined: 3.Oct.2011

Hi guys,

Thanks for the feedback.

I did take a look at the finances before I bought. What had happened is that the BRF has bought all the apartments from Akelius in 2010.

So the balance sheets were all negative as the BRF of course had to take on all the loans from the bank. I know big red flag.

Also there was major work done on a garage which had a fire incident.

Actually I did not attend the Board Meeting this year as it was in May and I had just moved in.

But thank you for the advice everyone and I guess all I have to do right now is to talk with the Board and ask them about the finances and how they plan to handle it in the future.
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Yorkshireman
post 10.Dec.2012, 12:18 PM
Post #5
Joined: 22.Nov.2011

QUOTE (wondering @ 10.Dec.2012, 08:49 AM) *
I did take a look at the finances before I bought. What had happened is that the BRF has bought all the apartments from Akelius in 2010. So the balance sheets were all negativ ... (show full quote)

This is not a red flag in itself, since every BRF normally takes on a loan, and the rest is funded by the initial capital injection from each member (apartment). One red flag though can be the difference between how much the BRF loaned in comparison to the capital from the tenants. If their portion was low, then there was an intention to buy cheap and sell for large profit, leaving future tenants to foot the bill sad.gif

The red flag is the difference between income from monthly fee and/or buildings around and the outgoings in terms of interest, running costs etc... Since it is a relatively new BRF they may have under-estimated the running costs and maybe fixed the interest rate a little higher than is possible today. Maybe they also planned rennovations that require additional capital from monthly fees?

Being a new BRF, there is little data to judge the management skills of the board sad.gif

QUOTE (wondering @ 10.Dec.2012, 08:49 AM) *
Also there was major work done on a garage which had a fire incident.

Don't they have insurance!?

QUOTE (wondering @ 10.Dec.2012, 08:49 AM) *
Actually I did not attend the Board Meeting this year as it was in May and I had just moved in.

You should have received a copy of the minutes, if you did not, then request them.
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wondering
post 10.Dec.2012, 10:00 PM
Post #6
Joined: 3.Oct.2011

Thanks again guys for the feedback.

I have gotten a copy of their results and now will pore through them . dry.gif
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Willy
post 10.Dec.2012, 11:38 PM
Post #7
Joined: 10.Jul.2005

QUOTE (Bender B Rodriquez @ 10.Dec.2012, 08:35 AM) *
You are a member of the BRF and thus have the right the vote at the board meetings. Didn't you attend the board meetings? That's where the economy of the BRF is decided.

I think you are confusing the board (styrelsen) with the AGM (stämma). As a member you are entitled to attend and vote at the AGM, which elects the board, but you are not necessarily allowed to be present at the board meetings or read the board minutes.
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Bender B Rodriquez
post 10.Dec.2012, 11:49 PM
Post #8
Joined: 25.Mar.2006

Yes, you are correct. You have the right to vote at the annual general meeting and have the right to see the economic plan/report.
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oddsock
post 11.Dec.2012, 01:26 AM
Post #9
Joined: 19.Dec.2008

Such drama, am I better off buying a place I fully own?

At least then I wouldn't be paying the heating bills for my Swedish neighbours who live in denial in the middle of winter and keep their apartments at sub-tropical temperature. Haven't these people ever heard of a jumper or a thick pair of socks... I don't even have to turn on the radiators in my place, the heat coming from the neighbouring apartments does the trick.

Tell me, why do they do it this way? Why aren't the full costs of the build included in the selling price when the apartment is constructed? Why do they choose this BRF construction? Is it the Swedish syndrome of not wanting to take full responsibility for anything?

And in this day and age of energy efficiency, surely each apartment should be billed separately for their own heat and water use?
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Yorkshireman
post 11.Dec.2012, 08:44 AM
Post #10
Joined: 22.Nov.2011

QUOTE (oddsock @ 11.Dec.2012, 01:26 AM) *
Why do they choose this BRF construction? Is it the Swedish syndrome of not wanting to take full responsibility for anything?

BRFs are not just found in Sweden, even though it has been around here for a couple of hundred years in one form or another. The same concept is found in use in UK, USA, Canada, Germany, India ...

As for sub-tropical temperatures, that is just bad management. You are judging all by a few visits. In our BRF we have a policy that the max temp inside during winter is 23C, measured in the middle of a room. If the tenant wants it higher, then they have to fix/pay for that themselves, it certainly does not come via the shared central heating/bill.
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Localer
post 11.Dec.2012, 10:21 AM
Post #11
Location: Stockholm
Joined: 27.Oct.2006

same happened to us, bought the apartment 3 years ago. The fees was around 4800 for 88 sqm flat, after 3 years the avgift is 6900 SEK per month !! bloody h*ll !
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Localer
post 11.Dec.2012, 10:23 AM
Post #12
Location: Stockholm
Joined: 27.Oct.2006

same happened to us, bought the apartment 3 years ago. The fees was around 4800 for 88 sqm flat, after 3 years the avgift is 6900 SEK per month !! bloody h*ll !
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oddsock
post 11.Dec.2012, 11:41 AM
Post #13
Joined: 19.Dec.2008

QUOTE
You are judging all by a few visits. In our BRF we have a policy that the max temp inside during winter is 23C, measured in the middle of a room.

This is what I am talking about! 23 degrees!
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Yorkshireman
post 11.Dec.2012, 12:13 PM
Post #14
Joined: 22.Nov.2011

Yes. The guidelines from Socialstyrelsen for building owners are:
20-23C for normal tenants
22-24C for old and sick tenants

We have a number of older tenants so we have a maximum of 23C.
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Willy
post 11.Dec.2012, 01:14 PM
Post #15
Joined: 10.Jul.2005

I think we can summarize the situation thus:

The Swedes want the temperature of their houses to be like in the sub-tropics and insulate and heat their houses accordingly.

The British think they live in the sub-tropics and insulate and heat their houses accordingly. laugh.gif
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