Three things you need to start doing to maintain the value of your real estate

Three things you need to start doing to maintain the value of your real estate

Almost 60% of all Lithuanians live in apartment buildings and the apartment is usually the only real estate they own. Its value depends not only on the condition of the apartment, but also on the technical condition of the apartment building. Kamilė Raustytė, Senior Building Administration Manager at Civinity Namai, a multi-family administration and maintenance company, explains what every apartment owner needs to do to maintain the value of their home.

Most of the apartment blocks are thirty years old and older

The majority of apartment blocks in Lithuania were built before 1990. According to the Lithuanian Department of Statistics, the majority of apartment blocks were built between 1961 and 1980 and even 20% of apartment blocks in Lithuania are older than 60 years.

The vast majority of apartment buildings in Lithuania are thirty years old or older and require constant maintenance to keep them in a proper technical condition. Older blocks of flats eventually suffer from a wide range of disasters: leaking roofs, crumbling facades, blocked sewage pipes, and renovation issues are essential to keep the building in good condition.

Although the law requires maintenance of apartment buildings to be carried out by technicians with specific expertise, the condition of the building and, in the long run, its value, depends to a large extent on the apartment owners themselves.

Take an interest in the technical aspects of your apartment building

Although the maintenance of an apartment building is a job that requires a lot of special expertise, everyone can know what condition the building is in and what work is being and needs to be done.

According to Civinity Namai, being aware of the condition of a block of flats can be compared to the knowledge we have about our car: although we usually do not have the knowledge to determine the technical condition of a car ourselves and we leave it to specialists, we know when it is due for an MOT and what maintenance work has been done or is due to be done in the near future.

“Unfortunately, only a few apartment dwellers can boast such knowledge about their property. Many do not know what works are being carried out or what should be carried out in their building. However, information such as the condition of utilities and the roof is very important for assessing how long we will be able to use the building and when it will start to cause major inconveniences and require additional investments,” says Raustytė.

All information on the technical condition of a block of flats is collected by a technical supervisor authorised by the building administrator, who is obliged to carry out regular inspections of the building and draw up inspection reports. All owners of the apartment building have the right to see these documents. The best way to do this is to attend the meetings where the results of the inspections are presented. These meetings not only provide access to all relevant information in a timely manner, but also allow people to ask the experts any questions they may have.

Attend the administrator’s house meetings

If certain deficiencies are identified during the regular maintenance inspection, a list of these deficiencies is provided together with recommendations on how these deficiencies should be addressed. However, the approval of more than half of the owners of the block of flats is required to carry out such work.

The approval of the owners of the flats is expressed by voting. This is usually done by organising a meeting. According to Ms Raustytė, the biggest challenge faced by all apartment building management companies is the low level of participation by residents.

“On average, 30% of apartment owners turn up for the meeting. Obviously, with this number of votes, it is not possible to make decisions on the work to be done. In this case, issues are not resolved in time, time is wasted organising additional meetings, and attempts are made to collect residents’ written approvals. Often, there are situations where decisions are never taken,” says a representative of Civinity Namai.

Plan the work and save the money

To avoid such situations, it is advisable to consider and approve a long-term plan for the renovation of the apartment building in advance. This should include the work that needs to be done to avoid unwanted breakdowns in water, electricity or other utilities. The plan should also include works and improvements to keep the building in good technical condition, such as renovation of the building or upgrading of the networks.

“To preserve the value of real estate, we need to think first of all about its proper maintenance. Reacting only to emergencies is not the same as proper maintenance. Unfortunately, if residents are not interested in preserving the value of their property, it is very difficult to agree and stick to a maintenance plan with them. It may seem like an additional cost, but consistently following the plan and maintaining the house means that residents pay less than they would pay for emergency response and remediation,” says a Civinity Namai representative.

According to Raustytė, creating a long-term plan can be likened to a strategy for apartment building owners to maintain, and maybe even increase, the value of their property. Having a plan does not have a surprise effect, and there is no need to discuss whether such works are necessary every time a deadline for certain works comes. Moreover, the plan also provides for indicative investments, and knowing these can help to plan in advance the sources of financing.

One of these is accrued funds. The law sets the rate of accumulation, which, depending on the size of the apartment block, varies between €0.03 and €0.05 per square metre, and must be paid monthly by the owners of all the apartments. “It is important to understand that this statutory rate is a minimum and the residents can agree by consensus to an increase. In this case, the owners of the flats pay a slightly higher amount each month, but in the long run they accumulate much more money which they can use for renovation works without having to face the problem that some residents are not able to pay the higher amount immediately for the necessary works,” says Raustytė.