Flats under pressure from debts

The country's homeowners' associations are becoming increasingly indebted and bankruptcies are rising. It's quite clear that it's a tougher situation. Especially for the associations that are renegotiating their loans now to a completely different interest rate, says Therese af Jochnick at Sweden's Homeowners' Centre (SBC).

» Updated:

» Published:

Flats under pressure from debts
Photo: Janerik Henriksson/TT

Share this article

Country's homeowners' associations are becoming increasingly indebted and bankruptcies are increasing.

Rising fees and delayed renovations have become the norm – and many homeowners' associations are under intense pressure.

By the turn of the year, 370 associations had debts with the Enforcement Authority, according to a compilation from SBC. This represents a 298% increase since 2013, when 93 associations had debts at the end of the year.

Furthermore, 116 associations have been noted as having debts with the Enforcement Authority during the first quarter of the year.

Similarly, the number of bankruptcies among homeowners' associations has risen. In 2022, the number was 71, and last year it was 40. The average over the years 2013-2021 was 18 bankruptcies per year.

At the same time, there may be more reasons than just soaring costs leading to bankruptcy.

She stresses that it is important for homeowners' associations to increase their fees in line with costs. Her recommendation is to draw up a multi-year budget and an updated maintenance plan for the association.

To minimize risks, flat owners should look at the association's indebtedness and savings, explains Therese af Jochnick.

Checking whether the association owns the land is another important thing. Associations that hold the property with a lease are more economically exposed as the local authority can increase the lease fee. Liabilities, interest rates and terms and conditions are other things to keep an eye on.

Tags

Author

TTT
By TTEnglish edition by Sweden Herald, adapted for local and international readers

More news

ECB Officials Divided on Future Interest Rate Decisions

ECB Officials Divided on Future Interest Rate Decisions

Klarna CEO Increases Ownership Amid New York Stock Exchange Listing

Klarna CEO Increases Ownership Amid New York Stock Exchange Listing

Six Suspects in Consultant Scandal Face Charges After Spain Raid

Six Suspects in Consultant Scandal Face Charges After Spain Raid

Microsoft to Remove Teams from Office Package in EU Agreement

Microsoft to Remove Teams from Office Package in EU Agreement

UK Economy Growth Stagnant in July as GDP Remains Unchanged

UK Economy Growth Stagnant in July as GDP Remains Unchanged

German Inflation Rises to 2.2 Percent in August

German Inflation Rises to 2.2 Percent in August

Global Stock Markets Rise Ahead of Expected US Rate Cut

Global Stock Markets Rise Ahead of Expected US Rate Cut

Insurance Guide: What to Know After Västernorrland Floods

Insurance Guide: What to Know After Västernorrland Floods

Asian Stock Markets Rise on Week's Last Trading Day

Asian Stock Markets Rise on Week's Last Trading Day

Trump Seeks Court Approval to Dismiss Fed Member Before Rate Decision

Trump Seeks Court Approval to Dismiss Fed Member Before Rate Decision

Warner Bros Discovery Surges on Wall Street Amid Paramount Bid Rumors

Warner Bros Discovery Surges on Wall Street Amid Paramount Bid Rumors

US Inflation Matches August Expectations

US Inflation Matches August Expectations

ECB Keeps Interest Rates Steady

ECB Keeps Interest Rates Steady

Novo Nordisk to End Remote Work in 2024

Novo Nordisk to End Remote Work in 2024

Switzerland Suggests Moving Gold Refineries to USA to Lower Tariffs

Switzerland Suggests Moving Gold Refineries to USA to Lower Tariffs

Klarna's Stock Market Debut Attracts Swedish Small Investors

Klarna's Stock Market Debut Attracts Swedish Small Investors

Oil Demand Surpasses Expectations for 2026, Says IEA

Oil Demand Surpasses Expectations for 2026, Says IEA

Stockholm Stock Market Rises Slightly as Rusta Drops 13 Percent

Stockholm Stock Market Rises Slightly as Rusta Drops 13 Percent

Swedish Dockworkers' Union and Employers Reach Agreement Ending Dispute

Swedish Dockworkers' Union and Employers Reach Agreement Ending Dispute

Technology Industry Faces Weak Growth, Says Teknikföretagen Report

Technology Industry Faces Weak Growth, Says Teknikföretagen Report