What is the repair fund and why does it exist
The repair fund consists of money that apartment owners regularly set aside into a common pool to ensure the building is prepared for both planned and unplanned repairs. In the event of an emergency or when roof replacement becomes necessary, costs are covered from the fund: not through extraordinary levies that would leave residents financially crippled.
The repair fund is managed by the building's owners' association on a separate bank account, and the administrator manages it according to the instructions of the general meeting. The money in the fund remains the property of the building's owners' association, not the administrator. This is an important assurance for the owners.
According to §1189 of the Civil Code The creation of the fund is mandatory, but the law does not specify a particular amount. This is determined based on the building's technical condition and the long-term repair plan.
How the fund is calculated
Method 1: Percentage of the total management contribution
Typical amount: 30-50 % of the owner's total monthly contribution goes to the repair fund. The remainder covers routine operations, management, cleaning, energy for common areas, and the manager's fees.
Method 2: Calculation based on apartment area (CZK/m²/month)
A fairer method, as larger flats cause greater wear on shared areas. Typical values in Prague:
- New build: 15-25 Kč/m²/month
- Panel building from the 1980s: 25-35 Kč/m²/month
- Historic tenement building from the early 20th century: 35-55 Kč/m²/month
Method 3: Calculation based on the long-term maintenance plan
The most accurate method. A list of all planned repairs over 20 years is compiled, the total is divided by the number of months and areas, resulting in an exact monthly rate. We use this method for all the building's owners' associations in Heritum.
Typical contributions: table by age of building
Estimated monthly contributions to the repair fund for a 65 m² flat in Prague:
- New build 2020+ 1 300-1 600 Kč (20-25 Kč/m²)
- Apartment building from the 1990s: 1 500-2 000 Kč (23-30 Kč/m²)
- Panelák from the 1980s after revitalisation: 1 600-2 200 Kč (25-34 Kč/m²)
- Rental building from 1950-1970: 2 000-2 800 Kč (30-43 Kč/m²)
- Historic tenement building 1880-1930: 2 300-3 500 Kč (35-54 Kč/m²)
For buildings with a lift, underground garage or private gas boiler room, add another 5-10 Kč/m² per month.
How the fund is used: practical examples
Example 1: Window replacement in stages
Building: 40 flats, a historic tenement in Prague 2. Replacement of 200 windows on the street-facing façade. Price per sash window to heritage standards: 45 000 Kč. Total: 9 000 000 Kč spread over two phases five years apart.
Example 2: Roof repair
Building: 30 flats, Prague 1. Complete roof repair including sheet metal elements and insulation: 2 500 000 Kč. With a properly set reserve fund, this is covered by the annual increase without the need for extraordinary payments.
Example 3: Lift modernisation
Replacement of the elevator car and control electronics: 1 200 000 Kč. Lifespan 25 years. Monthly burden on the fund for 30 flats: 133 Kč/flat/month for the elevator only.
Long-term plan: example for 20 years
Building: Rental house from 1920, Prague 1, 30 flats, average area 70 m²
Total area: 2 100 m². At a rate of 45 Kč/m²/month, the annual income into the fund is: 1 134 000 Kč. Over 20 years, just under 23 million crowns will be saved (without revaluation or interest).
Scheduling of planned investments:
- Year 1-2: Building passport, energy audit, structural assessment: 300 thousand Kč
- Year 3-5: Replacement of windows in the street-facing façade (80 windows × 45 thousand) - 3.6 million Kč
- Year 6-8: Roof and sheet metal repair: 2.5 million Kč
- Year 9-12: Facade remediation and restoration including stucco work - 4.5 million Kč
- Year 13-15: Renovation of water and sewage risers: 3.5 million Kč
- Year 16-18: Modernisation of electrical distribution and low-voltage systems: 2.8 million Kč
- Year 19-20: Restoration of common areas: staircase, entrance hall, lift: 3.2 million Kč
A total of 20.4 million Kč. The remaining reserve of 2.5 million will cover unplanned emergencies and the reserve for the next period.
Frequently Asked Questions
What if the fund is insufficient and the building requires major repairs?
The building's owners' association approves an extraordinary contribution (one-off or spread over several instalments), or takes out a short-term bank loan. Banks today lend to the building's owners' association on reasonable terms, provided the building has a stable flow of payments.
What fund is required by law?
The law does not specify the exact amount; it only states that the fund must exist and be appropriate. In practice, it should be calculated based on the building's technical diagnostics and a long-term repair plan. The manager should update the plan annually.
Can I choose my share from the repair fund when selling a flat?
No. The fund is the property of the building's owners' association and transfers to the new owner upon sale of the flat. However, the current state of the fund and planned investments are usually taken into account in the purchase agreement: a well-funded fund increases the flat's price.