The working capital is an amount of money in the current account and serves as a “safety mattress” for the current expenses of the co-ownership. This capital ensures sufficient liquidity to meet payments while waiting for co-owners to pay their provisions.
⚠️ It is legally obligatory for a co-ownership to constitute a working capital.
✋ The increase or decrease of the working capital is voted in the General Assembly by an absolute majority (50% + 1).
⚖️ If no increase or decrease in the working capital is voted, the amount of the working capital at the end of the financial year should be the same as it was at the beginning of the financial year.
For example: In the first week of the current financial year, my co-ownership received three invoices: a provision for running water, fire insurance and cleaning of the common areas.
These costs have of course been foreseen in the annual budget, and therefore in the amounts that will be requested via the provision requests.
However, as we are at the very beginning of the financial year, the first provision request has just been sent out and we have not yet received any payments from the co-owners.
In order to pay these 3 invoices on time, the building manager will use the “safety mattress” of the co-ownership: the working capital money. When the provisions for charges are paid into the co-ownership account, this will replenish the working capital.
Attention: Covering an expense with money from the working capital does not lead to a decrease in the capital! In fact, the working capital will be replenished afterwards and the amount that constitutes it at the end of the financial year will be the same as it was at the beginning of the financial year.