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BRF raised monthly fees by 16% for next year

Is this normal? Can I protest?

Mib
post 11.Dec.2012, 01:45 PM
Post #16
Joined: 7.Jul.2006

Well compared to the UK, I think the Swedish system works and is fare in most cases. No-one forces anyone to buy an apartment and everyone has the right to see the accounts before they choose to buy or not. Of course you can't forsee the future, but the accounts, the state of the buidling etc etc will help. Just after we moved in, the Government changed the property tax which reduced our monthly fee, but is now back up again as there have been some structural issues with the garage, generator replacement and refurbishment of the lift etc etc, so we pay a little more than when we arrived. Thankfully, we have a Chairman who knows how to run a business and he has managed the BRF very well financially and is more communicative. We even have our own basic web site for info.!!

In the UK, the aprtments buildings maintenance tend to be run by a private company which surprise, surprise charges a lot per month or year and do the minimum. The law was changed so if the majority of the owners in the maintained area wanted to take over the maintenance then they could setup their own company and in theory reduce the costs. But you still need people to manage it and the cost didn't inlcude the heating etc.

As a man smile.gif, I tend to like the temperature to be lower than 23C, whereas my Wife prefers it a little higher!! Like someone mentioned, just put on a jumper or extra layer. Easy for me to say while walking around in my T-shirt.
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oddsock
post 11.Dec.2012, 05:01 PM
Post #17
Joined: 19.Dec.2008

I would keep the temp at about 17 degrees in the winter. That's a full six degrees below what my neighbours prefer. As heating is included in the rent, I am essentially subsidising their excess. My neighbours are in their twenties, so they are hardly old.

I really don't understand why the avgift is so high in Sweden. I see amounts like 6000 SEK on small apartments and I wonder where all the money is going. A similar apartment block in Holland would have a monthly fee of 60-80 euros and max 100 euros. Anything more would be considered a rip-off. And each apartment has its own meter for water, gas and electricity.
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Pursuivant
post 11.Dec.2012, 05:18 PM
Post #18
Joined: 12.Aug.2008

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

If you want to live in a block of flats - can you? I thought BRF's were the only option???

Then again, how do places you "fully own" work in other countries... only the people living on the top floor take maintenance of the roof? And what about the elevator? Someone pisses into the stairwell, as it wasn't you, you don't pay? Smells like that in Russia. laugh.gif
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Localer
post 11.Dec.2012, 05:28 PM
Post #19
Location: Stockholm
Joined: 27.Oct.2006

QUOTE (Localer @ 11.Dec.2012, 11:23 AM) *
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 !

guess what, came home today and they increased it again to 7300 SEK !!!! this is so bloody unacceptable !
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PDX
post 11.Dec.2012, 05:30 PM
Post #20
Location: Stockholm
Joined: 2.Aug.2011

QUOTE (oddsock @ 11.Dec.2012, 05:01 PM) *
I really don't understand why the avgift is so high in Sweden. I see amounts like 6000 SEK on small apartments and I wonder where all the money is going. A similar apartme ... (show full quote)

Don't worry, this is what most people don't understand rolleyes.gif . The reason is that the monthly fee is not only maintenance, heating etc, but often includes capital costs as well, i.e. interest and repayment of loans. You can ask the BRF to give you the annual report or even to see the accounts - these should have everything itemized in sufficient detail.

~~~PDX~~~
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PDX
post 11.Dec.2012, 05:31 PM
Post #21
Location: Stockholm
Joined: 2.Aug.2011

QUOTE (Localer @ 11.Dec.2012, 05:28 PM) *
guess what, came home today and they increased it again to 7300 SEK !!!! this is so bloody unacceptable !

This must have been decided at a general meeting - why don't you go and find out what the actual reason is?

~~~PDX~~~
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Bender B Rodriquez
post 11.Dec.2012, 06:37 PM
Post #22
Joined: 25.Mar.2006

QUOTE (oddsock @ 11.Dec.2012, 06:01 PM) *
I would keep the temp at about 17 degrees in the winter. That's a full six degrees below what my neighbours prefer. As heating is included in the rent, I am essentially su ... (show full quote)

As, PDX says. New apartments have high fees because they have loans on the house. The monthly fee is not for maintenance only.

When a new apartment building is built, the construction company forms a BRF which owns the house through bank loans. Tenants then pay market price to become members of the BRF, but the members' shares may not cover the outstanding loans of the BRF, and the remaining loans plus maintenance are then financed by the monthly fee.

Being a member does not mean that you own the apartment, you are just a member of the BRF, with corresponding rights and duties.

If you want to actually own your place you have to buy a house or an "ägarlägenhet", the latter is however a new thing and there does not exist many on the market.
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oddsock
post 11.Dec.2012, 11:00 PM
Post #23
Joined: 19.Dec.2008

Yes, I understand all that. But it still mystifies me why they choose such a construction. I don't see the advantage. If each first time owner of the apartment block pays their full share of the costs up front then you get higher house prices and almost no avgift. Then each person can choose to finance their share of the costs however they want. Loan, cash, mixed loan+cash, variable interest, fixed interest, 15 year loan, 30 year loan, whatever. In a BRF system I am stuck with whatever type of loan the entire building agreed to. So not only do I have to pay for my neighbour's heating, but also their love of interest only variable rate mortgages.

What is it about Sweden and people not wanting to make independent decisions?

I suspect this whole system plays into the hands of the banks.
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Willy
post 12.Dec.2012, 12:16 AM
Post #24
Joined: 10.Jul.2005

It's your independent decision to buy a bostadsrätt in a BRF with a lot of debt and high fees. Nobody is forcing you.
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wendist
post 12.Dec.2012, 12:21 AM
Post #25
Joined: 14.Feb.2010

According to this Wikipedia article the concept of brf seem to be pretty widespread, even the individualistic americans knows of it.

http://en.wikipedia.org/wiki/Housing_cooperative

As for the banks, might it not actually be an advantage to approach them as a brf representing f.ex. 150 apartments rather than having 150 individuals trying to secure the best deal possible?
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Bender B Rodriquez
post 12.Dec.2012, 03:35 AM
Post #26
Joined: 25.Mar.2006

QUOTE (oddsock @ 12.Dec.2012, 12:00 AM) *
Yes, I understand all that. But it still mystifies me why they choose such a construction. I don't see the advantage. If each first time owner of the apartment block pays ... (show full quote)

It is a balance. A BRF is less of a credit risk than an individual, but at the same time an individual gets a 30% tax deduction on interest payments, which a BRF does not get. No loans on the BRF would mean high prices for the shares, which leads to less potential buyers since it is harder for an individual to secure a loan than a for a BRF.

Virtually all houses in Sweden use water based central heating, so it would be difficult to split it up.
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Yorkshireman
post 12.Dec.2012, 08:27 AM
Post #27
Joined: 22.Nov.2011

QUOTE (oddsock @ 11.Dec.2012, 11:00 PM) *
But it still mystifies me why they choose such a construction. I don't see the advantage. If each first time owner of the apartment block pays their full share of the cost ... (show full quote)

For a well managed BRF, it is cheaper for the tenants to use the non-profit making company model than being directly owned by all the tenants.

If everyone at the start paid off the total loan, each apartment, on average, would be double the value. Whilst there would no interest/capital payments for the BRF, there would still be the annual running costs + maintenance. However, each tenant, unless they had everything in cash, would have a mortgage that is double the current size, which means it is less likely to pay off and more likely to leave on interest only.
The BRF, if run correctly, over time is amotising the loans, so the monthly fees come down, which means it should become cheaper over time to live there.

In addition to this, many BRF's have on their ground floors commercial properties that are let out, further reducing the fees etc... if the income is managed correctly.

Plus, many of the existing BRF's, Stockholm for example, were created by the conversion of existing rental buildings. Under the law that governs the conversion to a BRF, any existing tenants that do not want to buy their property have the right to stay as renting tenants, they are protected, which means that it isn't always fact that everyone in a BRF actually holds shares in the BRF, they may be renting from the BRF only.
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oddsock
post 12.Dec.2012, 10:11 PM
Post #28
Joined: 19.Dec.2008

QUOTE
No loans on the BRF would mean high prices for the shares, which leads to less potential buyers since it is harder for an individual to secure a loan than a for a BRF.

Exactly, and if people can't get the loans to pay such high prices, then the prices would have to come down to an affordable level for an individual to be able to pay. That's why I think the banks are the ones who like the BRF.

QUOTE
It's your independent decision to buy a bostadsrätt in a BRF with a lot of debt and high fees. Nobody is forcing you.

Up until very recently the BRF was the only legal way to sell apartments in Sweden. The full ownership model wasn't even allowed...

QUOTE
However, each tenant, unless they had everything in cash, would have a mortgage that is double the current size, which means it is less likely to pay off and more likely to leave on interest only.
The BRF, if run correctly, over time is amotising the loans, so the monthly fees come down, which means it should become cheaper over time to live there.

So what if somebody has a lot of cash and wants to buy a place? They can't buy their share outright, they must pay interest into the BRF. Bank wins.
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Bender B Rodriquez
post 12.Dec.2012, 10:25 PM
Post #29
Joined: 25.Mar.2006

QUOTE (oddsock @ 12.Dec.2012, 11:11 PM) *
Exactly, and if people can't get the loans to pay such high prices, then the prices would have to come down to an affordable level for an individual to be able to pay. Tha ... (show full quote)

There are plenty of BRFs that have paid all their loans. It is mostly the new ones that have high fees.
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oddsock
post 13.Dec.2012, 12:24 AM
Post #30
Joined: 19.Dec.2008

Even those ones still have fees north of 2000 SEK.
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