The financial plan
Before the properties can be leased under cooperative agreements, the board needs to draw up a budget for the cooperative, which is called a financial plan. The financial plan is then scrutinised by approved outside parties, authorised by Boverket [the National Board of Housing, Building and Planning], to makes sure the plan is reliable.
Income and costs
The financial plan shows the cooperative’s income and costs for the first year. It should also include a sensitivity analysis showing what impact variations in inflation and interest rates could have on the cooperative’s finances, as well as an economic forecast. If there are any major changes before all the tenant-owner properties have been leased, it is the board’s responsibility to draft a new financial plan.
Cost of the cooperative’s properties
The financial plan estimates the acquisition cost for the cooperative’s properties. The final acquisition cost can only be established once construction is complete. The acquisition cost is financed partly by loans taken out by the cooperative, and partly by the investment stakes paid by tenant-owners to the cooperative.
Cost of loans and running
Capital expenditure (interest rates and loan repayments), depreciation and annual running costs are also estimated. Some cooperatives assume that the tenant-owners will carry out some work themselves, such as snow clearing and basic gardening, to keep their housing costs down.
The size of the initial stake you invest in a home varies. It is determined, for example, by the size of the home and how attractive the location is. The stakes payable for each property is specified in the financial plan. Only you, as the first tenant-owner, pay an initial investment stake to the cooperative. If you later want to sell (or ‘transfer’ as the formal term is) your tenant-owner property, your buyer pays you a purchase sum – but no investment stake to the cooperative.
The annual fee has to cover the cooperative’s annual costs, i.e. running costs, capital expenditure, and a provision or ‘prudent reserve’ for future maintenance. The charges are determined by the board, which also assesses the cooperative’s long-term cost development. The annual fee is divided according to the principles defined in the statutes. Property size is a common factor in deciding how the annual fee is divided between the various properties, but there may be other division (or ‘share’) parameters as well. Here at OBOS, for example, we often calculate the share parameter as 80% property area and 20% fixed amount, which is determined by how many properties the cooperative has.
NB: Even if your property has a higher share parameter than someone else’s, you normally have the same voting rights in the cooperative.
If the statutes allow, the housing cooperative may levy a transfer fee for additional costs and administration when a tenant-owner property is transferred to someone else. This fee may not exceed 2.5% of the price base amount, which is recalculated every year. The price base amount is set by the Swedish government. The cooperative’s statutes specify whether the transfer fee should be paid by the buyer or vendor. Not all cooperatives levy a transfer fee
If you take out a home loan with your tenant-owner property as collateral, your home becomes pledged. As soon as the cooperative is informed of the pledge, the board is obliged to record this in the property list. Where the statutes allow, the cooperative is then entitled to charge a pledge fee for its administrative work relating to the pledge. This fee may not exceed 1% of the price base amount. Not all cooperatives levy a pledge fee.
If you wish to sublet your tenant-owner property, you must have the housing cooperative’s permission. If the statutes allow, the cooperative may also be entitled to levy an additional charge for subletting. The cooperative may charge a maximum of 10% of a price base amount per year.