Owning an apartment in The Netherlands

There are important things when you consider to buy an apartment in The Netherlands. These relate to the value of the apartment and to monthly charges you will have to pay once you own it. Any questions relating to this article? Drop me an email at rob[at]vvewiki[dot].nl.

In The Netherlands you own the right to privately use a designated part of an apartment building, instead of the actual space itself. This is important, since this right is accompanied by some special obligations. For clarity’s sake, we refer to the right to use the apartment simply as ‘the apartment’ throughout this article.

Owner’s association (VvE)

Dutch law prescribes that those who own an apartment in the same building, are automatically unified in an owner’s association. It is impossible to exclude yourself from membership if you own an apartment, and it is impossible to be a member of the association without owning an apartment. The Dutch term for such association is ‘Vereniging van Eigenaren’, loosely translated as ‘Association of Owners’. The Dutch abbreviation is VvE, which we use in this article.

The VvE looks after the joint interests of the owners of the apartments, like making sure the building is maintained, cleaned, and insured. Decisions in the VvE are taken in a democratic fashion: the ‘meeting of owners’ is organized periodically, and every owner holds one vote for each apartment he or she owns. Most regular decisions require majority consent, more radical decisions often super majority (more than 75% or a higher percentage) of the votes.

Potential risk

The VvE funds its expenses by contributions it receives from the owners. Owners are obliged to pay these expenses, no matter what. Defaulting on this payments can eventually trigger a foreclosure on the apartment. Next to the ongoing expenses, the contributions are also applied to fund and maintain a reserve that holds the owners’ collective savings for large scale maintenance. This is where the most tricky part of buying an apartment is: if savings are too low, and maintenance is urgent, the trouble usually starts.

A little sidestep. The VvE is organized in a democratic fashion, jointly by the owners whereby each owner holds one vote. Decisions are taken on the ‘owners’ assembly’, a meeting that can be held recurring or ad hoc. Decisions are made democratically, and on most topics by majority vote. The board of the VvE in turn has the task to carry out the decisions made by the assembly.

Back to the trouble of absent funds to pay for urgent maintenance. In such situations, the board will usually call for an assembly. Given the urgency and the amount of money involved, most owners are likely to show up. Although the meeting that follow differ among each other, the usually heavy debates evolve around differences of opinion about whether the maintenance really is urgent in the first place, what the maintenance should cost, and so on. Finally, the assembly will vote on the topic and if most owners vote that the maintenance has to be carried out, the owners are demanded to jointly make an additional capital contribution to the VvE to pay for the maintenance.

In such situations, it boils down to the situation in which you as an owner are obliged to pay a (sometimes very substantial) amount to the VvE. Obviously this is an unfavorable situation. Other outcome might be that the maintenance is indeed urgent but that the other owners are all out of funds, and the vote disapproves the maintenance. The latter can have a substantial detrimental effect on the value of your property.

Final note

Long story short: if you consider buying an apartment in the Netherlands, make sure you are informed on the affairs within the VvE and ask your broker or a specialist for help if needed. Most VvEs are well funded and are in a good shape; prevent yourself from buying into a rotten one.