This is the most far-reaching reform of recent years for Luxembourg condominiums. Article 11 bis of the Law of 16 May 1975, introduced by the Law of 30 June 2022, requires a fonds de travaux (a works fund) to be built up. The Ministry of Housing confirms that it has been compulsory since 1 August 2023, including for new buildings.
What it is for
The provision is direct: “The co-owners shall build up a works fund in order to meet the cost of works decided upon by the general meeting.” The stated aim of the Ministry of Housing is to encourage the general and energy-efficiency renovation of existing buildings. This is therefore collective saving set aside in advance, not an ordinary cash-flow advance.
How it is funded
The fund is financed by a compulsory annual contribution paid by the co-owners. The amount of the contribution is decided by the general meeting voting by the simple majority of article 15, and may not be lower than the amount per square metre set out in the annex to the Law, pro rata to each co-owner’s share (article 11 bis).
That minimum is not uniform: according to the Ministry of Housing, the minimum annual contribution varies with the thermal insulation class shown on the building’s Energiepass (its energy performance certificate). The logic is to create an incentive: the less efficient the building, the higher the minimum saving required. The meeting may vote more than the minimum, never less.
The contributions are called in by the syndic (the managing agent) on the same footing as the other payments provided for in article 25 of the Grand Ducal Regulation, of which they have formed point 5° since the Grand Ducal Regulation of 30 June 2022.
“Contributions paid into the works fund attach to the units and are definitively acquired by the co-owners’ association. They give rise to no refund by the association on the transfer of a unit.” (article 11 bis). When you sell, therefore, you do not recover your saving from the condominium: it stays attached to the unit. This is something to factor into the price negotiation, and to raise with your notary.
The prospective buyer’s right to information
The Law draws the consequence: a person who has declared an interest in acquiring a unit, whether for value or by gift, after the owner has declared an intention to transfer it, and a person who has accepted an estate subject to inventory that includes a condominium unit, must be able to consult the current balance of works-fund contributions acquired by that unit (article 11 bis). If you are buying, ask for that balance: it forms part of the unit’s real value.
A point for landlords
The holdings of the works fund do not form part of the invested capital within the meaning of article 3 of the amended Law of 21 September 2006 on residential leases (article 11 bis). That has consequences for how the rent is calculated: have it checked against your own letting arrangements.
Three pots not to be confused
- The fonds de travaux: compulsory annual saving, attached to the unit, definitively acquired by the association, and not refunded on a sale.
- The permanent cash advance (working-capital fund): provided for by the règlement de copropriété (the condominium regulations), it stays to the credit of your co-owner account.
- Special advances voted for a particular project: called in to carry out a specific decision of the meeting (article 25, 4°, of the Grand Ducal Regulation).
For your own building
The applicable minimum scale depends on your building’s energy performance certificate class and on the floor areas taken into account: we will give you the figure for your condominium, together with the calculation of your contribution pro rata to your share. Write to us stating your building and your unit.
General information on Luxembourg condominium law (the amended Law of 16 May 1975 and the Grand Ducal Regulation of 13 June 1975, in their consolidated version applicable as at 1 August 2023). Your own règlement de copropriété may lay down specific rules, which prevail within the limits set by the law. This content is not legal advice.