#Accounting management #Reserve capital

According to the law, the reserve capital must be increased annually by an amount that cannot be less than 5% of the total amount of the previous year’s ordinary common expenses.

The General Assembly, which votes for this annual increase, may also decide to raise the increase to more than 5% of the total amount of the previous year’s ordinary common expenses.  

✋ The increase must be voted by an absolute majority (50% + 1) in the General Assembly.

 

For example: In 2 years, the roof of the co-ownership will have to be replaced. However, the annual increase provided for by the law (minimum 5% of the total amount of the previous year’s ordinary common expenses) will not provide enough money to cover the work.

The General Assembly then decides to increase the reserve capital with a larger amount than required by law for the next two years.

In this way, the co-ownership will have the necessary amount to pay for the works, without the co-owners having to pay a large sum at the time of the works. Indeed, the necessary amount of money will have been collected over the last two years in small regular instalments.