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Anneleen
Anneleen Vancoillie

Business Development Manager

Kris De Wilde
Kris De Wilde

Product Manager Corporate Credit

It's fair to say that more than 50% of all apartment buildings were built before 1970. The building overlooking the Borsbeeksebrug in the Berchem district of Antwerp is no exception. This apartment complex was long outdated and was in urgent need of an upgrade. Renovation projects of this kind, however, tend to be a piecemeal thing. Why is that the case? Not for KBC: the bank found a sustainable solution to get around this in the form of the KBC renovation credit for co-owner associations, a solution provided by the bank in collaboration with CIB Flanders . 

 

Renovation costs 

The cost of renovations for large-scalerenovation projects can quickly ramp up. For a full renovation of the building facades and installation of roof insulation, EUR 100,000 or more per co-owner is the norm. 
 
The high cost price means that co-owners often postpone this kind of renovation work. However, legislation is becoming stricter with regard to energy requirements. Examples include the Renovation Wave Initiative by 2050, the Flemish Housing Code and an obligation to present energy performance certificates (EPC) for communal building areas by the end of 2022. 
 
Suppliers of EPC reports, such as CIB partner BTV, often provide a multi-year maintenance plan detailing the renovation requirements when presenting EPCs for communal building areas. 
 
This allows the trustee to see directly which aspects need to be taken care of most urgently. They can then discuss the need for this and the associated investment during a general meeting. 
 
In practice, however, the most essential investments are often postponed due to the high investment costs involved. 
  

Alarm bells 

Property management agencies are ringing the alarm bells and want to encourage the Association of Co-owners (VME) to take a more thorough approach. 
 
The accumulation of different investment files makes it difficult to coordinate the tenders for the work involved and means it is more technically complex in terms of feasibility. 

By combining multiple projects, it can sometimes be possible to save money in the long term, e.g. when paying for the one-time use of site installations such as scaffolding. 
 
Co-owners have more of an advantage when implementing quality structural solutions than patchwork repairs done in the short term. This is definitely the case if the property management agency can ensure that the payments are spread over several years. As a result, the costs don't have as much of an influence over the decisions being made. 
 
This type of investment also increases the value of the plot due to greater comfort. If the owner decides to lease the property, there is less of a risk of incurring penalty points related to the Flemish Housing Code. 
  

Deciding together, at home together 

When it comes to renovation projects and performing upgrades to communal spaces in apartment buildings, co-owners have to make decisions together. In practice, the decision-making process tends to take time. 
 
Co-owners do not always see the benefits that renovation work will provide. On a technical level, projects of this kind are often complex and expensive.  

The reserve fund saved by the co-owners usually turns out to be insufficient, and the individual owners will also sometimes have insufficient funds. 

In addition, each co-owner has to fulfil their financial responsibility, which in many cases means going to the bank themselves – and dealing with all the costs associated with this. In other words, the process is inhibitive, which is why it is often only urgent renovations which are actually performed. 
  

Working with property management agencies 

KBC has provided renovation credit to co-owner associations since 2015. The credit is assigned to the association, with each owner deciding for themselves whether to take the credit or not. The property management agency responsible for the building represents the co-owner association, and monitors all administrative processes and checks that the payments are being made. 
 
As the funds are taken out by the co-owner association, the threshold for large-scale renovation work is lower and can be done in one go. The risk of non-payment is covered by a credit insurance policy. 
 
Interested parties can submit a communal renovation credit application via kbc.be
 
The Greenpark apartment building in Berchem, for example, was financed using renovation credit for co-owner associations by KBC. The professional property management agency Solvia manages the file. Renotec completed the renovation work. Starting in summer 2020, property management associations affiliated with the trade organisation CIB Flanders have been able to submit their requests using their tools with KBC. 

 

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