The rise in maintenance charges: what homebuyers need to calculate before signing

The maintenance charge is the cost you pay every month, whether or not you still have a loan balance. Yet it’s often sidelined in home purchases. Attention tends to focus on the debt-free price, the square meters, and the kitchen finishes. The charge gets a quick glance in the listing, is deemed reasonable, and the deal moves forward.

That’s a mistake – especially now, when rising maintenance charges have become a real burden in home purchases.

What the maintenance charge actually covers

The maintenance charge covers the housing company’s running costs: property tax, insurance, cleaning, property management, maintenance work, and so on. It isn’t fixed. The housing company decides the size of the charge at the shareholders’ meeting. The board of directors can only raise the charge if the shareholders’ meeting has specifically authorized it. In practice, the board often has authorization to collect or waive up to two months’ worth of charges, but the charge itself cannot be changed without a decision from the shareholders’ meeting.

Rising energy prices, growing repair debt, and more expensive property management services have all pushed maintenance charge levels upward. This isn’t a temporary spike. The building stock is aging, and the need for repairs is growing.

Loan repayments on a housing company loan are paid through the financing charge, not the maintenance charge. These two are often confused with each other. In housing companies located on leased land, you also need to factor in the land charge, which covers the ground rent. When discussing a rise in charges at the time of purchase, the direction of all of these needs to be checked separately.

What documents you should request before making an offer

The property manager’s certificate is a mandatory starting point. It outlines the housing company’s financial situation in broad strokes: loans, charges, any arrears. However, KVKL has pointed out that the information content of the property manager’s certificate is currently not sufficient for a buyer’s decision-making, and the regulation is being revised.

The property manager’s certificate shows the current situation. It doesn’t tell you what’s coming.

In practice, the documents actually available are more limited than people often assume. Here’s what’s realistic to aim for:

• The most recently approved financial statements. As a complete set, only the previous closed financial period is available. However, it also shows the key figures from the period before that, so you can compare the development over two years. Check whether the maintenance charge has gone up, and by how much.
• The budget for the current year. Is an increase to the charge coming? Is the budget running a deficit?
• The long-term maintenance plan (PTS). This shows what the housing company plans to repair over the next five to ten years. Major projects drive up the charge or create additional loan debt.
• The shareholders’ meeting minutes. It’s usually possible to get the minutes from the previous period by requesting them. Minutes from several years back typically aren’t available. Even a single set of minutes can reveal what’s been decided recently and whether there’s been any dispute over the charge or renovations.

These documents aren’t always offered automatically. You have to ask for them.

The monthly cost isn’t the figure in the listing

The actual monthly cost of a home is calculated by adding together the loan repayment and interest, the maintenance charge, the financing charge, and any other possible payments such as a water charge, if it isn’t included in the maintenance charge.

Let’s run through an example. A home costs €200,000. The maintenance charge is currently €4.50 per square meter, and the home is 60 square meters – so €270 a month. If the charge rises to €6 per square meter over the next three years, that means €360 a month. On an annual basis, the difference is €1,080.

This won’t necessarily break your ability to service the loan. But it does change the calculation. And it needs to appear in the calculation the bank looks at – and the one you look at – before you make an offer.

The bank’s stress test for interest rates is an established practice. Stress-testing the charge isn’t done automatically anywhere. That’s the buyer’s own job.

What deserves particular attention

An old apartment building outside a growth center carries a different risk than a comparable building in Helsinki. In Hypo’s housing loan risk classification, more than 60 municipalities fall into the higher-risk C category, and the number of A-category municipalities has dropped from 13 to ten in the latest update. The area’s price trend affects how a rise in the charge is reflected in the home’s value over the long term.

A housing company with substantial repair debt and weak financial reserves is more likely to raise its charge than a well-managed one. You won’t find that in the listing. You’ll find it in the documents.

A housing company on leased land also carries its own risk. The ground rent can rise, and that feeds directly into the land charge and, in turn, into the overall cost of living there. KVKL has specifically pointed out that buyers don’t always receive sufficient information about a property’s real costs and upcoming financial obligations, especially on so-called optional leased plots.

What you should take away from this

The maintenance charge isn’t fixed. It’s a variable cost, and its trajectory can be read from the documents before you commit to the purchase.

Ask for the financial statements, the budget, and the long-term maintenance plan. Calculate the impact of a charge increase on the monthly cost yourself. Don’t assume the current level will stay the same in the future.

That’s not pessimism. That’s just doing the math.