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Expenses without brakes: They already average $100,000 per month and delinquencies increased - Infobae
Source:
April 3, 2024
The impact is the high monthly inflation that increases the costs of services and the sharp rise in rates. Maintenance of common areas is complicated
By José Luis Cieri
The increase in the maintenance of elevators, the costs of cleaning common areas and security are among the items that increased the expenses of the Buenos Aires consortiums the most.
Consortium expenses increased almost 200% year-on-year, according to industry sources. The continuous increase in expenses responds mainly to high monthly inflation, generating increases in the costs of services such as disinfection, elevator maintenance, cleaning and security, usually contracted by the consortium.
In addition, staff increases and labor lawsuits also contribute to the increase in expenses, to which are added increases in electricity, gas and water rates.
According to data provided by the ConsorcioAbierto platform among more than 10,000 consortiums, they confirmed that the average expense for buildings (not including debts) in the city of Buenos Aires averages $100,794 per month.
“Given the growing increases, hundreds of neighbors who previously did not carefully review the liquidation now question its origin. The new regulation, which requires a QR code in expense settlements to access the application of consortium funds, seeks to guarantee transparency in expenses and facilitate the review of receipts,” Albano Laiuppa, director of this software company, told Infobae. management.
Digitalization allows residents to easily understand the composition of their expenses and make quick decisions to reduce increases. Administrations that have management systems simplify the process by automatically recognizing and uploading supplier invoices, which saves time, avoids manual errors and promotes transparency.
David Loisi , president of the Horizontal Property Consortium League Foundation, noted that “measures can be implemented to reduce the consumption of services, such as electricity and water, by adopting efficient use practices and negotiating contracts with cheaper suppliers. "You can also explore options such as renting common areas (such as the porter's office, party walls or terrace), or renegotiating existing contracts to obtain better rates, such as changing suppliers, such as security, maintenance of elevators and fire extinguishers."
To contain spending, greater budget control by residents is required, along with the search for competitive budgets, especially for expensive jobs. Overtime can be removed.
Stressed man looks at the costs he must pay to maintain the home. It is crucial that the consortium members take care of his family finances and understand that non-payment of expenses has repercussions on the rest of the community (Photo: Shutterstock)
Jorge Resqui Pizarro , a lawyer specialized in condominium and real estate law, said: “Consortiums usually pay up to 40% more than market values, underscoring the importance of those who pay the expenses to carefully review the amounts. Although some expenses, such as staff salaries and services, are inflexible, efforts are made to reduce non-essential expenses to avoid significant increases in expenses. However, these measures may result in a deterioration in maintenance and repairs, as well as the reduction of services such as building security, if owners so choose.”
Delinquency on the rise
Delinquency not only increases expenses, but can also lead to increases above inflation in many consortia.“Delinquency is a constant concern, reaching an average of 35% when a year ago it was close to 20 percent. It is important to remember that the owner is responsible for the expenses, while the tenant is not obliged to pay them directly to the consortium. The consortium may apply penalties, such as late payment interest, but must also consider flexible payment plans for owners facing temporary financial difficulties, such as work or health problems,” Loisi explained.
This situation generates concern, since the lack of funds affects the operation of the consortium and has repercussions on all the consortium members. Given this scenario, it is crucial that the administrator takes measures to recover outstanding payments.
Eduardo Awad , president of the Association of Owners, Consortiums and Consortiums of the Argentine Republic (Apccra), advised starting a process of intimation to those owners who owe expenses, seeking to reach an agreement that satisfies both the consortium and the debtor. “Before resorting to legal action, it is preferable to dialogue and seek solutions that avoid unnecessary conflicts. An unfavorable agreement is preferable to prolonging costly and exhausting litigation for both parties,” he said.
As for tenants, it is important to remember that they have the obligation to pay the expenses, as established in the rental contract.
The constant increases in basic services such as electricity, gas and water are exponentially raising the cost of expenses, making many practically unpayable. “In this sense, we are working in collaboration with associations to seek financial solutions that alleviate the economic burden of the consortia and allow the necessary repairs to be made to the buildings,” Awad said.
In hundreds of buildings, due to the lower collection of expenses, only urgent repairs are made (Photo: Getty)
The elimination of subsidies for electricity and gas will affect consortia, especially those with central services.
Loisi added: “Although increases can be significant in percentage terms, energy expenditure usually represents a relatively small fraction of total expenses. “Consortia must review their electrical categorization and look for ways to reduce consumption to mitigate the impact of increases.”
The debtor of the expenses is always the owner or possessor of the functional unit. “If the owner faces financial difficulties, the consortium can consider a payment plan, which must be approved at the assembly,” Laiuppa clarified.
Only essential tasks
Resqui Pizarro highlighted the implementation of various saving measures in buildings, such as the change to LED lamps and the installation of solar panels. “However, increases in central hot water and heating services are causing concern for homeowners. Additionally, the lack of individual water meters complicates billing and could aggravate the impact with upcoming announced increases.”On the other hand, the lack of maintenance in central areas of the building is another point to take into account. Although essential tasks are being carried out, the situation is difficult and emergencies are prioritized. Even in buildings with higher-net-worth owners, the impact on common costs is carefully assessed.
Awad concluded: “We are arranging for banks to grant soft loans to consortia to urgently address problems such as balconies, leaking roofs and party walls with serious leaks, whose repairs are hampered by lack of funds.”
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