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Agreement on shareholdings in community facilities in accordance with section 43 of the Facilities Act
Here is help with agreeing on new percentages in a community facility and various compensation rules for this, as well as what information we need to get and information about our handling.
Agreement on new percentages
Changes in participation in a community facility can take place through an agreement between the owner of the property concerned and other partners. If the community facility is managed by a community association, the agreement is reached between the owner of the property in question and the association's board. Participation changes mean entry of a new property, exit of participating property or increase or decrease of existing share.
No surveying service is required, but the agreement must be tested and approved by the surveying authority to be valid. The basic provision can be found in Section 43 of the Civil Engineering Act (new window) (the law is abbreviated AL).
To Lantmäteriet to be able to handle the case, the agreement needs to contain clear information about, among other things, new percentages and compensation amounts. Information on how, for example, compensation amounts have been calculated also needs to be submitted. The compensation rules contained in 36-39 §§ AL (new window) will form the basis for our review. Please read our explanatory summary of this below as well as our glossary regarding terms used on this page.
Forms
Lantmäteriet has produced a special form for the agreement. It lists all the categories of information that are necessary for us to be able to handle the case.
Compensation rules
A community facility has an economic value - often a If investments have been made recently, or there are funded funds, the surplus can then be large. In exceptional cases, the economic value can be negative, with a deficit as a result. on the current participation change.
Upon entry or increased percentage
Upon entry, the owner of the entering property shall pay compensation to the other shareholders for the share in the surplus that he or she receives through the entry (Section 37, first paragraph AL).
The corresponding principle of compensation applies if a the share of the already participating property is increased (Section 37, second paragraph AL).
The calculation of the surplus depends on the form of administration (the provision is in section 39 AL).
Co-ownership management
In the case of the surplus is considered to correspond to the value of the facility.
No other items should be added or deducted. Here, it will normally be a positive value, which will be used as a basis for the property's liability for compensation. The compensation, in the form of the property's share of the surplus, is divided and paid to other shareholders based on their respective shares.
Association management
In the case of association management, the surplus is calculated as the difference between, on the one hand, the value of the facility and the association's assets and, on the other hand, the association's liabilities. (In mathematical terms, it can be expressed as follows: the value of the facility + assets - liabilities = surplus.)
The result in this case will normally be a positive value, which will be used as a basis for the liability of the existing property. The compensation, in the form of the property's share of the surplus, is suitably paid as a total sum to the community association, which in turn is responsible for the payment to each of the shareholders based on their respective shares. If the result were to be a negative value, it would instead be a deficit. In that case, the question of compensation will not be relevant.
Upon withdrawal or reduced percentage
Upon withdrawal, the owner of the withdrawing property shall receive compensation from other shareholders for the share in the surplus that he or she loses through the withdrawal. If there is instead a financial deficit, the property owner must pay compensation to other shareholders corresponding to his share of the deficit. (Section 38, first paragraph AL).
The corresponding principle of compensation applies if the share of an already participating property is reduced (Section 38, second paragraph AL).
The calculation of the surplus or deficit depends on the form of administration (the provision is found in § 39 AL).
Co-ownership management
In the case of co-ownership management, the surplus is considered to correspond to the value of the facility.
No other items shall be added or deducted from. Here, it will normally be a positive value, which will be used as a basis for the retiring property's right to compensation. The compensation, in the form of the property's share of the surplus, is paid by all other shareholders based on their respective shares.
Association management
In association management , the surplus or deficit is counted as the difference between, on the one hand, the value of the facility and the association's assets and, on the other hand, the association's liabilities. (In mathematical terms, it can be expressed as follows: the value of the plant + assets - liabilities = surplus or deficit.)
The result is about a surplus when it is a positive value. This shall form the basis for the exiting property's right to compensation. The compensation, in the form of the property's share of the surplus, is suitably paid by the community association, which in turn is responsible for requesting payments from each of the shareholders based on their respective share.
The result is a deficit when is a negative value. This shall form the basis for the retiring property's liability for compensation. The compensation, in the form of the property's share of the deficit, is suitably paid as a total sum to the community association, which in turn is responsible for the payment to each of the shareholders based on their respective share.
Important to know
The compensation rules in the Civil Engineering Act are indispositive. They are therefore binding and can not be agreed upon by the parties to the agreement.
Lantmäteriet does not make a compensation decision, but only decides to approve (or do not approve) the submitted agreement. Prior to that decision, we make a fairness assessment, so that the agreed compensation does not deviate too much from a compensation calculation according to the rules of the Civil Engineering Act. The purpose is to safeguard the interests of all participating properties. If we consider that the agreed compensation is not reasonable, this may be the basis for not approving the agreement.
Two alternative ways of stating the agreed compensation
The agreed compensation can be stated in two alternative ways . In association administration, there is a choice between these, alternatives 1 and 2. In co-ownership administration, only alternative 2 is possible.
Option 1 - calculation in two steps
The compensation is stated as an "adjustable" amount which on the day when the agreement is made refers to the property's share in the sum of the facility's value and the association's non-monetary assets.
When Lantmäteriet s decision on approval of the agreement has gained legal force, an adjustment must be made to arrive at the final amount of compensation.
The association and the property owner concerned then add or subtract the property's share in the association's net assets from the original amount, to arrive at the property's share in the final surplus or deficit.
Option 2 - one-step calculation
The compensation is stated as a "fixed" amount which on the day when the agreement is made refers to the property's share in the surplus or deficit. calculation.
In association management, the calculation must also include the association's non-monetary assets and net assets, which may lead to a deficit.
No adjustment of the compensation shall be made after Lantmäteriet 's decision to approve the agreement has become final.
Information to be submitted to Lantmäteriet
Lantmäteriet must be able to make their assessment of reasonableness, information on the value of the facility needs to be submitted. If the community facility is managed by a community association, information about the association's assets and liabilities also needs to be submitted.
If the circle of participating properties changes, Lantmäteriet check the association's finances in an even broader perspective. If the finances are then not in balance, the association should namely be dissolved and a new association formed before any new property enters or another major adjustment is made to the circle of participants (§ 36 AL). Alternatively, the association's finances can be cleaned up by extra taxation from the members. Lantmäteriet must be able to assess the financial conditions, the association needs to submit a current balance sheet.
If the community facility is divided into sections, value and any assets and liabilities are stated in sections.
Percentages are normally available for both construction (construction) and operation (maintenance). The agreement needs to consider both of these percentages separately.
These and other information concerning the agreement are suitably stated on a separate form. If more space is needed for more signatures, there is a form to complete with.
Lantmäteriets handling
Agreement may not contravene the conditions in the Civil Engineering Act that are mandatory. If there is the slightest doubt about compliance with the law, Lantmäteriet do not submit an approval. An agreement shall not be approved, for example, when the group of shareholders has not been investigated or standards for calculation of shares are obsolete. In order to change participation, the community facility must be reconsidered in those cases, through a surveying service.
Lantmäteriets decision on approval of the agreement is taken in a protocol. The decision can be appealed within four weeks from the decision date. After that, the decision is entered in the Real Estate Register and can no longer be appealed.
Lantmäteriet takes payment through a basic amount and an additional amount in addition to the first property.
Lantmäteriets costs for work performed are always charged. This applies even if the administrator deems that approval cannot be given.
Glossary
Entry : A new property is connected to and thus becomes a participant in a community facility. to this property becomes a co-owner.
Exit : An already connected property leaves and thus ceases to be a participant in a community facility. The owner of this property ceases to be a co-owner.
Forms of administration
Co-owner management: The community facility is managed by the owners of the participating properties (co-owners).
Association management: The community facility is managed by a community association, whose board represents the owners.
The value of the facility is estimated with regard to the cost of execution (built ion), age and usefulness. This normally involves a calculation of the plant's replacement value, ie. what it would cost to build a corresponding new facility, with deductions for wear and tear and reduced usability as a result of the technical development that has taken place since construction. If the plant is new, the actual cost of construction can be used in estimating the value. Costs for land access and surveying for the formation of the community facility must also be included in the calculation of the value of the facility.
Assets are sometimes specified as either monetary or non-monetary.
- Monetary assets are money, e.g. in the form of cash and funded funds.
- Non-monetary assets consist of things that are not or can not easily be converted into money, e.g. real estate, vehicles and equipment.
Sometimes there is talk of net assets, which is an expression of monetary assets less liabilities.
Liabilities (or liabilities, as they are formally called) consists of e.g. bank loans or unpaid bills