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PROPERTY

Your essential guide to housing cooperative general meetings in Norway

In Norway, purchasing a home in a housing cooperative (borettslag) is quite common. If you're a co-owner in a borettslag, there are some things you should know before the cooperative's annual meeting.

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If you're a co-owner in a housing cooperative in Norway, it's important to be aware of the cooperative's annual general meeting. Photo by Tom Vanhoof on Unsplash

Generally speaking, there are two types of home ownership in Norway – self-owned homes and co-owner homes.

Self-owned homes involve private ownership of the apartment or house. In contrast, co-owned homes are owned by a housing cooperative, with several co-owners or unit holders owning the property together. Despite this shared ownership, each co-owner has exclusive rights to use their individual home.

While the self-owned model is quite standard in Europe, some people might be less familiar with the housing cooperative one, called borettslag in Norwegian.

Fret not – this is a very common and widespread way of buying property in Norway, and buyers often don’t discriminate between these two types of ownership.

You can learn more about Norwegian housing associations in The Local’s detailed explainer on housing associations with a cooperative ownership structure.

In this article, however, we will focus on a particular aspect of living in a borettslag – the annual general meeting (årsmøtet in Norwegian).

The basics of the housing cooperative’s general meeting

From a legal standpoint, the general meeting is the highest governing body of the housing cooperative.

As a unit holder in the borettslag, you have the right to appear at the meeting and voice any concerns or comments you might have.

Housing cooperatives in Norway have to keep an ordinary general meeting by the end of June each year, and you’ll generally be notified via email or another digital platform a week or two in advance.

During this general meeting, co-owners usually go through the accounts and financials of the housing cooperative in the previous year (meaning that a meeting in 2023 would involve discussions on 2022 financial results and reports), as well as any open topics that need to be discussed.

You can also expect a representative from OBOS – Norway’s largest property developer – to be present at the meeting. Many cooperatives are affiliated with OBOS, which provides business management, bookkeeping and other services for cooperatives.

How to prepare for the meeting

You will usually receive the materials that will be discussed at the general meeting in advance. These days, cooperatives often communicate via digital platforms such as Vibbo, which makes it easy for boards and residents to communicate with each other in housing associations.

Once you get the materials, it’s important to do your due diligence and prepare. Go through the key financials of the housing cooperative so that you can raise questions if you need anything clarified during the actual meeting.

READ MORE: How to analyse a Norwegian housing association’s finances before you buy an apartment

It’s also a good idea to go through all the proposals and items that other co-owners have sent to the borettslag’s board – each of these proposals will be voted on after the general meeting ends (if your cooperative uses Vibbo, you and other co-owners will be able to vote on each proposal separately via the online platform’s voting system).

This is also a good opportunity to send any proposals you might have to the cooperative (fixing the fence around your building or getting flowers for the shared areas are examples of items that often make their way onto a proposal list) so that they can be voted on at a later time.

The meeting agenda

While general meetings by different housing cooperatives can be different in some aspects, you can usually expect the meeting agenda to look like this:

1. Selection and voting on a meeting leader/head, who is tasked with ensuring that the meeting is conducted in accordance with Norwegian law and that meeting minutes are prepared.

2. Selection and voting on witnesses who will sign the meeting proceedings once these are finalised.

3. Voting on the manner in which the annual meeting has been convened (mostly a formality).

4. Swiftly going through the key figures related to the borettslag’s annual report and accounts. The general meeting will not go into detailed explanations – you are expected to familiarise yourself with the materials in advance.

5. Discussing borettslag board (styre) members and their compensation.

6. Discussing any open items that have been submitted to the general meeting for discussion by co-owners.

Expect the meeting to last anywhere from one to two hours for smaller cooperatives. Larger ones might need more time.

What to do once it’s over

Once all items have been discussed and the attendees have gone through the meeting agenda, the meeting head will declare the general meeting completed.

After that, all that will be left to do is to vote on each of the items that have been sent in by the co-owners.

In recent years, it has become quite popular to carry out such votes digitally after the general meetings are carried out, as is the case with borettslags that use Vibbo.

You won’t have to vote right away; most cooperatives will set a deadline a couple of days after the ordinary general meeting so that people have some more time to think about how they will vote.

Just be aware that accepted proposals – especially those with high price tags, such as major renovation and infrastructure projects – could directly affect your monthly payments and shared debt (felleskostnader). 

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PROPERTY

What you need to know if you want to rent out a room or annexe in Norway

If you’ve got a spare room or annexe you might want to put it to good use, especially as the earnings could be tax-free. Still, there are several rules in Norway you’ll need to be aware of.

What you need to know if you want to rent out a room or annexe in Norway

Plenty of homes in Norway, especially those that are more expensive, come with an independent annexe, and ad listings will typically list how much you can earn if you were to rent this out.

You may also have a spare room or basement you want to put to good use. Many see renting out annexes and basements as a great way to boost their income or offset the cost of their mortgage.

Long-term or short-term?

Before putting a room, annexe, or basement on the market for rent, you must have a rough idea of how long you want to rent it out.

The length of the tenancy will affect things like taxes and where you would want to list the property.

For example, Airbnb makes more sense for those wanting to rent a room or their property for a few weeks.

In Norway, rental income up to 10,000 kroner from short-term rentals is tax-free, provided each rental period is less than 30 days. After this limit has been reached, 85 percent of income is taxable at a rate of 22 percent.

READ MORE: The rules for renting out your home on Airbnb in Norway

If you have a dormitory, annexe or studio on your property that you wish to rent out for longer, then you will need to check that it meets the legal requirements to be rented out.

One of the most important distinctions is often made between whether the area you wish to rent out is an “independent unit” or part of the existing housing.

Whether the home has a separate entrance is typically one of the key distinguishers. Spaces that are considered independent units have stricter requirements, such as a private bathroom and fire safety measures.

Spaces must also have ceilings of at least two metres, with slightly different rules for sloping roofs. Certain rooms will also need to have windows and escape windows and a fire separation between the apartments.

Dormitories (hybel) are not considered independent housing, but the tenant must still have access to a bathroom and toilet, even if it isn’t their own private bathroom. The other rooms must be suitable for permanent residence under the rules of your local authority.

You can rent out a room in your home. However, the tenant must have access to a toilet in the home.

Should you choose to rent out a space, be that a room or dormitory, that doesn’t meet requirements, you could be legally liable for any incidents, or the tenant may have the right to terminate the tenancy or demand a reduction in rent.

Most Norwegians turn to Hybel.no or Finn.no to rent out a room or annexe. 

The tax rules

Renting out rooms or dormitories is so popular because the income can be tax-free in many cases.

A few requirements must be met for the income to be tax-free. You can rent out several dormitories tax-free on the same property, but there cannot be more than one “family flat/ familieleilighet” on the property. These are self-contained apartments suited for two adults and a child.

You must also collect less than half the rental value of the entire property. Alternatively, rental income is tax-free if all or part of the home is rented out for less than 20,000 kroner in the income year.

Norway’s tax administration has an online wizard that will give you an overview of whether your rental income will be tax-free.

Your responsibility as a landlord

As you will all be aware, renting out a room isn’t as easy as posting an ad and waiting for the tax-free income to roll in.

For example, you will need to have a proper contract in place, and the deposit must be paid into a separate account from the tenant or landlord.

There are also rules on when a landlord can access the property, and they will typically always need the permission of the tenant to access their space.

In addition, there are rules on when a landlord can raise the rent and how much by.

All this is as well as being aware of the rules and responsibilities for who covers what in Norway when things go wrong.

Luckily, there are plenty of organisations and resources, such as Husleie.no, that can offer landlords advice. These resources help with things like rent collection, contacts, and deposit accounts.

READ ALSO: The most common disputes between tenants and landlords

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