Renovation fund in a housing cooperative

Members of homeowners' associations can set up a renovation fund in a housing cooperative. It is a shared pool of money collected from all the people who use the flats that make up a given association. These funds are collected in order to carry out the necessary work to maintain the condition of the property.

Renovation fund in a housing cooperative – changes in the law

When considering the issue of money set aside for the renovation fund, it should be noted that the rules on this matter changed in 2018. First of all, under the new regulations the minimum floor area of a residential unit is now 25 square metres. This is a new provision that did not exist before. There were no limits on the floor area of a flat. In addition, under the new rules it became possible to install washing machines in the kitchen or kitchenette. Under the old provisions this equipment could be located only in the bathroom. Another provision introduced in 2018 concerns the possibility of having a kitchenette in a one-room flat. It can now be located in the living space, but certain specified conditions must be met. Changes were also made regarding parking spaces located in front of the building. The width of a parking space must be at least 2.5 metres. In addition, limits were introduced on the distance from pillars and walls. Let us add that these are only a few of the changes in Polish law.

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Cosmetic changes to some articles

The modifications to Polish law are seemingly small, but it is worth learning about them and understanding them. In the Act on Housing Cooperatives, the wording of paragraph 4 point 2 of the Cooperative Law Act was changed. In line with these modifications, a housing cooperative must account for the income and expenditure of the renovation fund. Previously only a record of this income and expenditure was required.

The renovation fund and taxes on commercial premises

It is also worth noting that the renovation fund serves only residential stock and does not apply to commercial premises forming part of the given property. This is because commercial premises such as shops are not necessary for the proper functioning of the residential premises and from this perspective are unnecessary for the homeowners' association. Their users cannot benefit from tax exemptions under Article 17, paragraph 1, point 44 of the Corporate Income Tax Act (CIT). This is because these payments do not constitute income from the management of residential stock and must be taxed.

The rules governing the renovation fund in a housing cooperative are complicated. They have also been modified, and it is easy to make a mistake when interpreting these rules. That is why it is worth using the services of professionals from REMAX Gold. They follow all the most important legal changes and will clarify these complexities.