Facade renovation, energy renovation, replacement of an elevator, repair of a roof… Co-owners are sometimes faced with particularly high capital demands. With the acceleration of energy renovation work and the aging of the real estate stock, bills can quickly reach several tens of thousands of euros per accommodation. A sum that some owners struggle to raise, particularly when they are retired, already in debt or have insufficient income to convince their bank.
However, once the work has been voted on at the general meeting, it is impossible to avoid payment. Even co-owners who voted against must pay their share. Faced with this constraint, certain households find themselves in a delicate situation: too rich to benefit from certain public aid but unable to obtain bank credit. It is precisely to respond to this problem that new players have developed financing mechanisms based on sharing the real estate value, a formula which makes it possible to finance the work without resorting to a traditional loan.
Financing your work in exchange for a share of your housing: how does it work?
Still little known in France, real estate value sharing is attracting the attention of a growing number of owners. Several companies, such as Vasco or Neoproprio, offer this type of financing to households who have real estate assets but are no longer able to borrow under traditional conditions.
The principle is simple. Instead of granting a loan with monthly payments to be repaid, the investor provides the necessary funds directly to the owner. In exchange, he will later recover part of the value of the property.
Depending on the contracts, several mechanisms coexist. The investor can become the owner of a share of the housing or receive a fraction of the capital gain upon resale. In all cases, the owner retains use of his property and continues to occupy it normally.
These solutions mainly target retirees, households already heavily in debt or owners whose income no longer allows them to obtain a bank loan despite sometimes having significant property assets.
The advantage is immediate: no monthly repayment, no additional deadline and no use of a traditional loan. In return, the real cost of the operation depends on the future development of the real estate market. The more the home increases in value, the more the investor’s remuneration increases.
An owner from Yvelines financed 29,000 euros of work
This solution notably enabled a resident of Plaisir, in Yvelines, to finance her share of energy renovation work. Confronted with a fundraising appeal of 29,000 euros and unable to obtain a traditional bank loan, she turned to Vasco to release the necessary sums. The operation allowed him to keep his home while financing the work imposed by his co-ownership.
This case illustrates an increasingly common problem. Many owners own property valued at several hundred thousand euros but find themselves excluded from bank credit due to their agetheir level of debt or income deemed insufficient by lending institutions.
Co-owners can first negotiate a payment schedule
Before considering this type of assembly, several more traditional solutions exist. The first consists of spread out fundraising calls over time. When work is voted on, the co-owners generally also decide on the payment schedule. “When important work is voted on, the general assembly also decides on a timetable and calls for funds”explains Romain Bonny, legal studies officer at ANIL (National Agency for Housing Information). The amounts due are then spread over several installments. “It still remains quite rare for us to demand, for example, for work costing 30,000 euros, payment of their share in one go”he adds.
Some work can be financed over a period of ten years
The law also provides for a specific system for certain improvement works. Under article 33 of the law of July 10, 1965, co-owners opposing certain works may, under conditions, spread their financial participation over a period of up to ten years. “They have the option of spreading their payment over 10 years. They can pay per annuity over 10 years”underlines Cécile Can, also in charge of legal studies at ANIL. This possibility does not, however, concern all the work carried out in co-ownerships, in particular that necessary for the maintenance or conservation of the building.
Collective borrowing and public aid: systems that are still little known
Other solutions can also be used. Co-owners can benefit in particular from MaPrimeRénov’ Copropriété, certain local aid or even the zero-rate eco-loan (EPTZ) depending on the nature of the work. Another lever that is often underused: collective borrowing. “The co-ownership also has the possibility of voting at a general meeting the implementation of a collective loan »recalls Romain Bonny. Subscribed on behalf of the co-owners’ association, this financing can allow certain owners to access a solution that they would not have obtained individually from a bank.
Until the seizure of the accommodation in the event of unpaid debts
Refusing to pay, however, is not an option. “Those who voted against, or someone who was absent, find themselves bound by this resolution”recalls Cécile Can. In the event of persistent unpaid debts, the trustee may initiate various recovery procedures. And when the situation gets bogged down, the consequences can be particularly serious. “If the debt is really not repaid by a co-owner, yes, in the long term, this can go as far as seizure of your property »warns Romain Bonny.
For the most financially fragile owners, the challenge therefore consists of quickly identify the most suitable financing solutionwhether it is a payment schedule, a collective loan, public aid or, more recently, a sharing of the value of their housing.
These elements and feedback demonstrate the importance, for co-owners, of take part in the life of the co-ownership. Staying informed of the progress of work projects, which most often take a long time, and getting involved in the operation of the co-ownership, particularly during general meetings, is indeed essential. And throughout the projects, it can be useful to contact your Departmental Housing Information Agency (ADIL), which can provide neutral and free legal information.
