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And here it comes again: AGM

The (annual) general meeting of a housing company is important. It is simply not worth ignoring. I have already previously written on its importance. And its importance has continued to grow.

So have the standards for the boards and management of housing companies in general. Hesari published an article on 21.3.2024 on the subject article (for subscribers), which discussed, for example, the requirements of management in changed circumstances. Perhaps the biggest increase in the need for change and in the speed and sensitivity of response has been the shocks caused by the sharp rise in costs in various areas. Shock is a strong term, but not overused in this context. On the same date, YLE also raises the issue in an article.

At the moment, housing companies are facing upward pressure of 5-10% on their management fees. The upward pressure is driven by heating, but equally by water and property taxes. Annoyingly often you hear owner-occupiers in a housing companies saying that it’s not them, but the company that has the problem. Forgetting that he is one of the owners of that company. It should go without saying that every owner of a housing company should be entitled to a share of the costs in proportion to his or her shares.

In practice, housing companies have one Annual General Meeting per year. Among other things, this meeting is legally required to discuss fee levels. So the levels are reviewed annually. The cycle is too slow to help. If the company does not want to change the meeting arrangements to make them more flexible, it would be a good idea to give the elected board the power to react to changing situations also between general meetings. Failure to react can easily result in a situation where the company’s liquidity collapses as buffers are eaten up by normal maintenance bills. Every housing association should hold on to the recommended buffer of three months’ contribution.

Typically, AGMs grant boards of directors the power to charge or not charge additional fees of one or two months. It does take courage for boards to use the mandate they have been given, even if it is in everyone’s interest. Obviously, it is no fun to impose “extra” charges on your neighbours, but it is even less fun to present an ugly financial statement at the next general meeting.

Anticipation and preparedness are the hard tick boxes. This is evident from the recent rapid rise in inflation, which took pretty much everyone by surprise. It is also clear that a responsible board must seek to avoid unexpected situations and thus provide shareholders with the greatest possible predictability. Uncertainty in the economy is not attractive to anyone. That is why everyone should be able to predict their own costs as accurately as possible, especially those related to housing. Because they are unavoidable and typically top the list of household expenses. That’s why – even for myself – I would rather pay a little more on a steady basis than suddenly have to pay two extra fees.

Times are tough and understanding and humanity are needed in many areas. However, pity is a disease, and should not be left untreated. If the company starts to experience growing fee debt, it must be addressed as early as possible. It is usually easier to find a solution before the situation escalates. And if it has already escalated, more radical action must be taken to take control of the apartments that have accumulated fee debt. This is another issue where both managers and boards need to take the bull by the horns. Otherwise, the problems of one will fall on all of us, and it won’t be any easier to manage the situation.

Why do I, as OUN, want to raise these issues? That’s why we continue to stress to every home buyer the importance of finding out as much as possible about the housing company under consideration. This applies to finances, governance in general and the physical condition of the company. In particular, banks have also started to pay more attention to the repair history and potential repair debt. If the company has managed to accumulate renovation debt and there are several major renovations on the horizon, the bank will have little interest in lending not only to a poorly managed housing company, but also to someone planning to buy a home from one. The old adage “better safe than sorry” applies here too, so if you don’t think you can sort it all out yourself, visit our shop and buy yourself some knowledge and peace of mind!

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Forced to bang your brains out, ...

…because we have a history of delivering ordered services quickly, often talking about hours. We understand that the pressure to buy once you find the home of your dreams is intense, which is why we promise delivery within 24 hours of your order. At the latest. This way, you don’t have to hold your breath in your shopping pants for an unnecessarily long time.

One report

There are quite a lot of different documents involved in a housing transaction, ranging from a sales brochure to a floor plan to an audit report. All are necessary for the evaluation, but it is still possible to summarise the essentials in plain language in a single report. Good riddance to the legalese and welcome the core facts with one (1) single report!

Trade documents

Even if the deed of sale of a residential property is a free-form deed, it should still contain all the essential information. We will check that this is the case. We will also check all the annexes that go on the side of the deed, i.e. the entire bundle of documents. You can then breathe a little easier as you sign the deed to your new home.

Negotiated bidding

We are here to help you negotiate your offer. We tell you what to look out for, what to ask the seller/agent and how to interpret the answers. And what conclusions can be drawn from the situation

Making a takeover bid

There is more to a takeover bid than just the price offered. We will help you to identify critical issues and check that all the agreed issues are properly recorded in the offer. And only the agreed things. So that you can sign it with confidence.

Sales price

And by that we mean the final price. We also take into account any company debt and the plot share. We compare the price to other comparable realised transaction prices in the area, not to asking prices. Apartments are always individual, and their equipment and condition vary greatly. However, we will find out if the price area is reasonable and acceptable.

Level of care

We estimate the level of the management fee charged by the company compared to other comparable housing companies in the area. We also look at whether the level has been right for the costs and whether there are clear upward pressures.

Zoning of the area

We’ll find out if there are any zoning changes afoot, or if that sea view you bought at great cost is about to disappear behind a new tower block in a year’s time. Or whether there are some less radical things happening around the place you are considering.

Management of the housing company

We look at how the management of the company has performed, including both the management and the board. Has the management been concerned only with making savings at every point or with keeping the company in good shape and maintaining or even increasing its value? 

Future renovation projects

We assess what kind of renovation projects are expected in the near future and the timeframe in which they can be expected to take place.  We might also throw in some guesses as to the expected costs!

Repair history

We look at when and what measures have been taken in the company and mirror them against the technical lifetime of each item. For example, we use the definitions of the Finnish Building Information Foundation RTS and the Central Association of Plumbing and Heating. This allows us to estimate whether the company has a repair debt.

Housing company finances

We carefully read through the company’s balance sheet and annual report, calculate the company’s indebtedness, liquidity and assess the overall financial situation. We compile our findings into a plain-language report that gives you an overview of the company’s situation.