Useful advice for the association's finances

On this page, we have gathered everything that you, as the board, should know about the finances in your housing cooperative. This includes your budget and annual financial statements, operations and maintenance, as well as costly construction projects.

In this section, you will find information about the budget and annual financial statements, which set the financial framework for your housing cooperative.

Budget

Every year, in connection with the annual financial statements, your administrator prepares a proposal for the housing cooperative's budget for the following accounting year. The board recommends the budget for approval at the general assembly. At the same time as approving the budget, the general assembly decides on the common expenses for the upcoming year. During the approval of the financial statements, the framework for the expenses that the board can incur during the financial year without further consultation from the general assembly is also determined.

Annual Report

The annual report contains four main elements:

• The income statement (Resultatopgørelsen)

• The balance sheet (Balancen)

• The calculation of the share value (Andelsværdiberegningen)

• Key information (Nøgleoplysninger)

The income statement shows how the year went. It is a detailed specification of the revenues and expenses that the cooperative incurred during the year. The income statement also shows how much the cooperative has paid off on its mortgage loans. The balance sheet shows how the cooperative's assets looked at the end of the fiscal year. It is divided into assets, showing the values the cooperative owns, and liabilities, showing the debts and equity in the cooperative's finances. The calculation of the share value determines the value of the shares and indicates the price at which the shareholders can sell their shares at the maximum for the upcoming year. The share value is binding from one general assembly to another. The key information is included according to the notice on disclosure requirements for the sale of cooperative apartments and contains essential information about the housing cooperative, its operations, including rental activities, information about building techniques, maintenance, and finally, information about its financial situation.

The property is the housing association's most significant asset. The value of the property, in the long term, depends on how the association manages and maintains it. In the typical board, members may not necessarily possess the knowledge, experience, or expertise required to handle the planning and decisions necessary to ensure that the association's buildings always remain well-maintained. Our recommendation for housing associations is to create a maintenance plan and have a dedicated operational and construction advisor to assist with its implementation.

Get an overview of the maintenance

Gaining an overview of maintenance involves four fundamental elements essential for sustainable and effective property maintenance:

• A maintenance plan that provides an overview of the property's condition and outlines the maintenance strategy for a 5 or 10-year period.

• A yearly operational budget containing specific maintenance tasks from the maintenance plan, broken down into detailed and targeted activities along with a detailed budget.

• Timely renovation projects to replace worn-out building components.

• Targeted financial management to ensure that the housing association can finance both maintenance and renovations without unexpected and unnecessary increases in owner expenses.

The maintenance plan and operational budget are interconnected

The maintenance plan and operational budget are updated annually and subsequently approved by the general assembly. Before formulating the operational budget, it is advisable to assess the property's condition with the caretaker and/or operational advisor. This evaluation helps in planning next year's operations effectively. Adjustments to the maintenance plan may be necessary throughout the year. To ensure timely decisions regarding these adjustments, maintaining a continuous dialogue with the caretaker and/or operational advisor is vital. This way, you can ensure that maintenance is carried out as planned and account for unforeseen changes.

Seek the assistance that makes sense for you

As a board, you are responsible for maintaining the property in the housing association, and we recommend seeking the appropriate assistance. Collaborating with an operational advisor to plan and manage ongoing operations could be a good idea. The daily operations and maintenance can be handled by a caretaker or a property service company according to an agreement. The caretaker or company will work under the guidance of the board or operational advisor, within the framework of the association's maintenance plan and budget. At DEAS, we can assist you in managing the maintenance of your association's buildings, including both daily and long-term planning.

Construction projects can be broadly divided into two main categories:

• Renovation projects involve maintaining and replacing worn-out building components as needed.

• Improvement projects involve adding something new to the property (e.g., balconies, elevators, etc.).

Below, we present the typical process for construction projects:

1. Idea and preliminary planning: Formulation of the initial project and preliminary budget.

2. Initial decision at the general assembly: Authorization for the board to incur expenses for planning, obtaining quotes, and obtaining public approvals.

3. Planning and obtaining quotes: Preparation of proposals for the general assembly on project execution, including calculating financial consequences (project cost and financing).

4. Implementation of the construction project: Construction credit, construction insurance, supervision, notification to tenants, financial follow-up.

5. Handling the unforeseen: Addressing damages or changes that occur during the project. This may involve insurance claims, revised requirements, or updated recommendations as more information becomes available.

6. Completion: Final accounts, financial settlement, final financing, calculation of contributions or shares of common loans, quality assurance.

Finance and funding

It is essential that decisions regarding construction projects consider the housing cooperative's overall financial situation. Coordination with the cooperative's bank and mortgage institution is also vital. A construction project often provides an opportunity to assess the cooperative's financing (loans). In many cases, a construction project can be partially funded through timely and targeted refinancing of the cooperative's mortgage. Proper management of the cooperative's loans can also impact the development of the housing charges (rents).

There are many things to keep track of when an association is carrying out a building project. We're here to help you through the entire process and make it as seamless as possible.

Building project management

We know that a building project can be a daunting task. We have many years of experience in construction management and can help you with all aspects of the process and ensure the successful realisation of your construction project.

You can leave the building administration to us, so that you can focus on your association and the important work.

Examples of tasks we solve:

• Impact calculations for the association's finances.

• Information about financing options.

• Preparation of final building accounting.

• Organising construction insurance.

• Payment of invoices.

• Securing financing.

• Handling payments from the association's members.

An in-depth planning with us ensures that your organisation is better prepared in the event of unforeseen financial surprises.

DEAS also offers building technical consulting services to associations. We have a large team of building technical experts ready to advise you on all aspects of your construction project. 

Whether you are planning a major renovation, replacing installations, or ensuring that your buildings meet the latest standards, we have the necessary expertise. Our building technical consulting includes assessing building conditions, inspections, identifying potential issues, and developing action plans.

Our goal is to ensure that your properties are safe, durable, and meet the highest quality standards.