Common costs are the tenant's share of the operating costs of the property, and the settlement of these costs is not only a legal obligation, but also crucial to maintaining a well-functioning real estate community. For both owners and tenants, it is crucial that this settlement is carried out in a fair and transparent manner.
Common expense settlement refers to the annual process of allocating and adjusting the costs incurred during the year among the property owners or residents. This often includes expenses such as renovation, electricity, caretaker services, elevator maintenance, cleaning and maintenance of common areas etc. A correct settlement of common costs ensures that all tenants pay for their respective share of the common areas, while ensuring the building's operation and maintenance. This promotes a sense of fairness and equality among tenants and reduces potential conflicts or dissatisfaction.
How to succeed with settlement?
1. Accurate registration of costs
First and foremost, it's essential to have a thorough overview of all costs incurred during the year. This can include invoices, receipts and contracts with suppliers. Accurate recording will form the basis for a fair distribution of costs. In Fazile, the balances recorded in the ERP system are automatically imported monthly via API or via import templates. This means that you will be able to keep a close eye on costs against shared costs invoiced on account, and effectively settle this at the end of the period.
2. Review of articles of association and contracts
Carefully review your property's bylaws and tenants' contracts to understand how common costs will be allocated. Some bylaws/contracts may require a percentage allocation based on the size of each unit, while others may have a fixed annual cost. If, when entering the contract in Fazile, you also register any skewed allocations and other weightings on the contract, the settlement will in practice be completed at the end of the period.
3. Communication with tenants provides predictability and transparency
Open communication is key. For both owners and tenants, predictable costs are essential for budget planning and financial stability. Accurate billing of common costs enables all parties to reliably anticipate and plan their financial obligations. Fazile, of course, enables you to both budget for common costs and distribute them equitably to your tenants, as well as make the settlement accurate and give tenants insight into the distribution.
4. Use of Technology
Modern technological tools can be invaluable when it comes to simplifying and automating the billing process. Fazile is specifically designed for this task and can help to both reduce errors and increase accuracy, as well as simplify the billing process.
Conclusion
A thorough and fair settlement of common costs is essential for the effective management of commercial properties. By following best practices and using modern tools and technology such as Fazile, owners and property managers can ensure that this important process is carried out in a transparent, fair and efficient manner. Not only will this minimize the chance of conflict and tenant dissatisfaction, but it will also ensure that the value and profitability of the property is maintained in the long term.
With Fazile, you get a seamless billing process - it's that simple!