Andelsbolig – between renting and buying

Hyggeligt soveværelse med lænestol og solstråler

Andelsbolig is a form of using an apartment that belongs to the cooperative that owns and runs the whole building or premises in which the apartment or a house is located. In order to use the apartment you have to buy a share in the premises and the right to live and use the property which is not the same as buying or renting a property. You do not become the owner of the property but a member of the cooperative.

Andelsbolig is less complex than buying a property and is based on the purchase of a share from the cooperative. You pay the amount due to the bank account of the cooperative and through this you obtain andelsbevis – a kind of a certificate that confirms your membership in the cooperative and your right to use the property. The former owner of the andelsbolig receives the amount agreed upon, following the deduction of all charges and some possible arrears for the benefit of the cooperative. The new purchaser is to pay some small fees and administrative charges as specified in the agreement.

From then on, the purchaser who becomes the member of the cooperative may decide along with other members on the issues connected with the cooperative as a whole. The members meet to decide on the most important issues such as maintenance, renovations and taking out loans to finance the works and materials, the level of the houserent, the choice of the real estate pricing, the type and level of the insurance of the building and the additional guarantees to be provided by the members.

Apart from the rights, the members have duties and obligations. When it comes to the cooperative as a whole, every member has a joint and several liability. It may be limited to the amount of the share or personal liability, including personal assets. The range of the liability depends on the individual cooperative.
Houserent collection, drawing the budget scheme and reporting on the execution of the budget are the responsibilities of the administration that is the executive body of the cooperative.

The statute – vedtægter

The statute is the collection of all rights and duties of the members of the cooperative. It outlines the rules governing the cooperative and the administration, gives instructions how to run the meetings, determines the decision making rules, regulates the rules of inheritance or the division in the case of divorce of the spouses etc. The statute is the most important point of reference for all members of the cooperative who are the authors of its provisions.

The price

The price of the property is not set by its owner freely. There are three methods of setting the value of the property to be sold. First of all, when it comes to giving a quote for a single apartment, the economy of the whole cooperative is taken into account, the value of all buildings, current liabilities and savings. You can add value to the property by renovating the apartment, thus, raising its standard.
To sum up, the pricing of a single apartment is strictly connected with the value of the whole building it is located in.

Purchaser’s rights and responsibilities

The rights and responsibilities of the owners are listed in the statute. It is worth noting, that with andelsbolig you may encounter certain limitations on using the property. Subrenting or keeping a pet among others, may be forbidden.
On the other hand, the owner is allowed to make small amendments, renovations and repairs when necessary, but major changes in the layout or the construction of the apartment are forbidden following the provisions of the statute.
The purchaser has the right to decide on the issues of the cooperative through the participation in the meetings of the community and by giving a vote. The purchaser has also the right to review the administrations’ documentation and may demand the reports and accounts.
The purchaser is obliged to make a one-time contribution that is returned in the case the apartment is sold, and to pay a houserent.

The essence of the andelsbolig is the fact that an apartment cannot be viewed as a single entity, but as a building block of a whole, an element of the community of the residents which bears consequences when it comes to the financial situation of a single owner depending on the decisions made by the community of the cooperative. It is, therefore, worth remembering that every loan taken out, every insurance agreement and other liabilities will have a direct impact on the level of the houserent and the responsibilities of every member of the cooperative individually because all costs of maintenance, taxes and insurances are divided proportionally among the members.

The main advantage of the andelsbolig over typical buying or renting an apartment is that it is economically better option in big cities, where the prices of real estate are generally higher. The costs of the andelsbolig may sometimes be several times lower.
There are obviously pros and cons of this form of possessing a place to live. The advantages are, apart from the lower price of the apartment itself, lower taxes and costs of insurance among others, which are divided among all members of the cooperative. The disadvantage is that the owner of the andelsbolig cannot freely dispose of the apartment as it is in the case of traditional ownership and must co-decide with other members on the issues of the cooperative.

Having considered all the above mentioned tenets of the andelsbolig, it is worth hiring a professional, who will lead us through the process of checking and preparing the documentation, who will evaluate the condition of the cooperative and its policy.

Our responsibility is to take care of the correctness of the buy-sell agreement, the technical report of the cooperative with regard to the condition of the building and the probable future renovation works and the account of the renovations already carried out, a yearly financial report of the cooperative, the policy and the management of the cooperative and the number and type of the bank loans taken out by the cooperative.

If you finally find a well-prospering cooperative with a transparent policy, it may be a longtime good option for a living between renting and buying.


Advokat Thomas Refning Poulsen

lawyer in Herning
Tel. 97 12 20 10