Service charge – what does it consist of?

Why are cooperative charges not rent?

The service charge (opłata administracyjna), also known as the housing fee (opłata mieszkaniowa), is often called administrative "rent" (czynsz administracyjny). Putting the word "rent" in quotation marks is no accident, because… cooperative charges are not rent. Under Polish law, rent is a payment made to the owner of a property for the right to use it. It is therefore paid, for example, by the tenant of a rented flat, and not by someone who is its full owner. The housing fee is of a completely different nature - it is a kind of "membership contribution" that we pay towards the smooth running of the cooperative and of the whole block.

The housing fee - what are we really paying for?

Fine, but which specific costs make up the mysterious service charge? And why can it be higher than it might first seem?

The housing fee covers two kinds of costs - those beyond the control of the block's manager, namely the building's operating costs, and those within it - paid directly to the building's administration and related to its work.

Operating costs

Neither the building's administration nor its residents have much influence on the cost of some of the services connected with running the building. These include above all:

• water and sewage costs - yes, all of us affect water consumption in our homes (it is worth saving water!), but the costs of supplying it and maintaining the connection are beyond our control and are shared by the whole block;

• heating costs - these work on the same principle as above; we pay for heating our own flat ourselves, but for delivering heat to the building and maintaining the heating system - together with our neighbours;

• electricity supply charges - besides the costs of supplying and servicing the electricity network, we must remember the charges for energy used in the common areas of the block - mainly the lighting of staircases and cellars;

• charges for waste collection and removal - their amount is usually fixed, imposed by a resolution of the administrative body responsible for waste disposal;

• property tax - paid to the local municipal office.

Charges for the building's administration

The housing fee also pays for the work of the administration and management board of the cooperative. And no - our money will not go directly into the pocket of the chairman of the board, but will be spent on:

• maintenance services - that is, among other things, minor repair work, cleaning of staircases, servicing of the lift;

• legal and financial administration of the building and of the cooperative that manages it - keeping the accounts, running the bank account and paying for insurance;

• upkeep and management of green areas.