117 homeowners' associations were declared bankrupt last year. It is almost three times more than 2023. It is also the clearly highest number in the past decade, according to figures compiled by the Swedish Enforcement Authority (Kronofogden) by the Swedish Association of Building Societies (SBC).
At the same time, it is still unusual. In the country, there are approximately 30,000 homeowners' associations.
The reason for the increase is partly the changed interest rate environment. As interest rates rise, it has become increasingly difficult for many associations that have not taken this into account, notes Therese af Jochnick, business area manager at SBC.
A nightmare
For someone who has borrowed several million kronor, however, such a situation can become an absolute nightmare. When the homeowners' association cannot pay its debts, the business is instead taken over by a bankruptcy administrator. The homeowners can be converted into rental apartments, in the worst case, the owners can see the entire investment go lost.
Therese af Jochnick highlights certain factors to consider when looking for a new home:
How large is the debt per square meter?
It is often newly formed associations that have a high debt. One should at least be aware that it can become significant fee increases if the interest rate environment changes again, she says.
We also see how associations begin to use their saved capital. We believe that an association should meet the savings needs according to the maintenance plan, normally it is around 300-400 kronor per square meter and year.
Large or small association
Does the homeowners' association own the land or rent from the municipality (so-called leasehold)?
It is also a very important aspect to look at whether the association owns the property with a deed or leasehold. We now see that leasehold fees are increasing sharply in the Stockholm area, which can mean fee increases.
If it is a smaller association, it means that expenses are distributed among fewer households, or it can be more difficult to get bank loans.
Something that the board can consider is whether it is possible to achieve a merger with a neighboring association, in order to create economies of scale to secure the economy.
2025. 33 (as of May 2) 2024. 117 2023. 40 2022. 71 2021. 19 2020. 4 2019. 17 2018. 17 2017. 3 2016. 20 2015. 41 2014. 29 2013. 9.
