Co-ownership on the Riviera: charges, managing agent, what to examine before purchasing

One visits a flat, one purchases a building

One visits a flat. One purchases a building, or rather a fraction of a building, with its neighbours, its history, its accounts and its possible disputes. This is the part of the profession that photographs never show, and yet it is the one that determines, for years to come, what a property costs and what it is worth. Our family manages Nice buildings on a daily basis through Régie Promenade; what follows is what I examine myself before recommending a purchase.

What is a co-ownership, in concrete terms?

A building in co-ownership is divided into lots: each lot comprises a private part (the flat, the cellar, the garage) and a share of the common parts, hall, staircase, roof, façade, lift, garden. This share is expressed in thousandths, fixed by the co-ownership regulations. They determine two things: your weight in votes, and your share of expenses.

This point seems abstract until the day the meeting votes for exterior renovation. Then the thousandths become very concrete.

The co-ownership regulations are the founding document: they describe the lots, distribute the charges, and establish the rules of life of the building, including, sometimes, clauses that directly concern a purchaser, such as restrictions on short-term letting or professional use. On the Riviera, where holiday letting is a permanent subject, I advise reading these clauses before anything else.

What does a managing agent do, and what does it not do?

The managing agent administers the co-ownership: it keeps the accounts, calls for charges, takes out insurance for the building, has maintenance contracts executed, convenes the general meeting and implements its decisions. It represents the syndicate of co-owners, that is to say the community, not one particular owner.

What it does not do: decide in place of the co-owners. Works, budget, choice of significant contractors, all this is voted at general meeting, at least once a year. The managing agent proposes, the meeting disposes. The majority rules vary according to the nature of the decision; the managing agent or your solicitor will specify which applies to the envisaged project.

A good managing agent is recognised by simple things: legible accounts, regular calls for charges, clear minutes, and works that get done rather than being deferred year after year. A well-maintained building is visible from the entrance hall.

What do co-ownership charges cover?

One classically distinguishes general charges, maintenance and administration of common parts, managing agent's fees, building insurance, distributed according to thousandths, and charges linked to services and equipment, lift, collective heating, caretaker, distributed according to usefulness for each lot. A ground floor does not pay for the lift like a fifth floor.

On the Côte d'Azur, certain items weigh more than elsewhere. A building on the seafront suffers salt and wind: ironwork, joinery, façades age more quickly. A swimming pool, a garden planted with palms, a resident caretaker, frequent in residences of the Promenade des Anglais and its surroundings, appear each quarter in the calls for funds. This is neither good nor bad; it is a way of life for a building, which one must know before committing to it.

The vendor must indicate the amount of charges in the advertisement and the sale file. I recommend going further: ask for the calls for charges from the last two years and compare them to the voted budget. The gap between the two often tells something.

What is the works fund?

The law now requires co-ownerships, under the conditions it defines, to establish a works fund: a collective saving, funded by the co-owners, intended to finance major projects to come, roof, façade, water columns, bringing the lift up to standards. The exact scope and level of contribution are verified with the managing agent or the solicitor.

Two points concern the purchaser. First, the fund is attached to the lot: the sums paid by the vendor remain acquired by the co-ownership, they are not reimbursed on sale. Second, the level of the fund tells much. A well-endowed fund in an old building signals a co-ownership that anticipates. A skeletal fund facing a tired façade heralds exceptional calls for funds, which the new owner will pay.

Which documents to read before purchasing?

The law organises the information of the purchaser: article L.721-2 of the Code de la construction et de l'habitation provides for the delivery of a set of documents before the sale of a co-ownership lot, co-ownership regulations and descriptive statement of division, minutes of general meetings of recent years, amounts of charges, maintenance record of the building, in particular. Added to this is the statement of condition, established by the managing agent before signing, which photographs the accounting situation of the lot: sums owed, sums to be owed, possible proceedings.

These documents sometimes arrive late, and thick. Here is the order in which I read them: first the minutes of general meetings, three years if possible, it is the living memory of the building; then the maintenance record, what has been done, when, and what has not been done; then the co-ownership regulations, at least the usage clauses and the distribution of charges; finally the statement of condition and the latest calls for charges, the figures, without comment.

A solicitor will help you legally qualify what you find there. But the first reading, the one that forms an opinion on the building, no one will do in your place.

How to read minutes of a general meeting?

Minutes are read like a family council report. One looks first for works voted and not yet called for, it is the point that costs. Exterior renovation voted in January will be paid by the owner in place at the time of calls for funds; who pays what between vendor and purchaser is negotiated in the deed, your solicitor will see to it.

Then come works discussed and deferred, three meetings in succession where one 'defers the study of roof repair', and you know what awaits you.

Then arrears: the amount of charges not recovered appears in the accounting annexes. Lasting arrears weaken everyone, what some do not pay, the others end up advancing.

Finally the climate: systematic challenges, repeated changes of managing agent, resolutions rejected en bloc. A building is governed; some are ungovernable.

What to examine in the fabric itself?

The Nice heritage has a charm that must be earned. The Belle Époque buildings of the Promenade des Anglais, boulevard Victor-Hugo or the Musiciens quarter are often more than a century old: cornices, continuous balconies, original stairwells. Pleasant to live in, demanding to maintain.

Three looks suffice during the visit. The façade and balconies: cracks, concrete spalling, ironwork corroded by sea air. The stairwell and common areas: cleanliness, paintwork, condition of the lift if there is one, and its age. The roof and attics, when one can access them: it is the heaviest item of an old building. What your eyes tell you, the maintenance record must confirm. When the two diverge, dig deeper.

And proceedings in progress?

A co-ownership may be in litigation, with a contractor, a co-owner, a neighbour, or, more serious, in financial difficulty; legal support mechanisms then exist, which your solicitor will be able to qualify. The statement of condition and the minutes mention proceedings; put the question to the managing agent in writing if doubt remains. Proceedings in progress are not always prohibitive, some protect the co-ownership. But one wants to know before, not after.

This is where the profession of managing agent meets that of adviser. Managing buildings daily, as we do at Régie Promenade, teaches one thing: the value of a Nice flat depends as much on the health of its co-ownership as on its view of the sea. Both can be verified. Only the second is visible from the balcony.