Co-ownership accounting in Belgium: keeping and checking the standard chart of accounts

The property manager (syndic) has sent the accounts for the financial year with the notice of the general meeting (GM): a few pages of balances, a balance sheet, an income statement. Or perhaps you have just accepted the mandate and are wondering what form the building's accounts should take. Either way, the answer lies in co-ownership accounting in Belgium under the chart designed specifically for co-ownerships, the Belgian standard chart of accounts (MAR/PCMN)GlossaryChart of accounts that owners' associations with at least twenty units, excluding cellars, garages and parking spaces, must follow. It was laid down for owners' associations by the Royal Decree of 12 July 2012. See the glossary for owners' associations, laid down by the Royal Decree of 12 July 2012.

What is at stake is concrete. An owners' association (VME/ACP) sometimes handles several hundred thousand euros a year: advance payments, reserve fund, maintenance invoices, insurance premiums. Without a common chart, nobody can say who owes what to the building or what each fund contains. The obligation applies to the syndic, volunteer or professional, and the rules are federal, so the same in Flanders and Brussels.

Which law requires co-ownerships to use a Belgian chart of accounts?

Two texts work together. The Civil Code requires the syndic to keep the association's accounts in a clear, precise and detailed manner in accordance with the standard minimum chart of accounts (art. 3.89, § 5, 15°). The Royal Decree of 12 July 2012, published in the Belgian Official Gazette on 3 August 2012, lays down that chart and the rules for keeping it. It applies to financial years starting on or after 1 January 2013.

The Royal Decree was adopted under the former Article 577-8 of the Civil Code. Since the recodification that came into force on 1 September 2021, the same obligation appears in Article 3.89. If you read old house rules (ROI) or a syndic contract citing Article 577-8, it refers to the same rule.

In 2012 the Belgian Accounting Standards Board (CBN/CNC) published an opinion (2012/14) that works through a complete financial year for a fictitious co-ownership of forty units: calls for funds, expenditure, depreciation of a small piece of equipment, interest, year-end closing. It is the best practical reference for a syndic who is starting out.

More or fewer than twenty units: which accounts should you keep?

The threshold is twenty units, excluding cellars, garages and parking spaces. Count only the apartments, offices, shops and other main private units described in the deed of division (acte de base / basisakte).

From twenty units upwards, double-entry bookkeeping under the standard chart is compulsory. In practice, the Royal Decree requires:

• accounts covering all the association's transactions, assets and rights;
• transactions entered without delay, faithfully and completely, in date order, in a single journal or in specialised journals;
• a dated supporting document for every entry;
• an inventory drawn up at least once a year, at the close of the financial year, without offsetting assets against liabilities or expenses against income.

Below twenty units, the Civil Code allows simplified accounts. They must nevertheless show at least:

1. income and expenditure;
2. the cash position and movements in funds, in cash and in accounts;
3. the amount of the working capital fund and the reserve fund;
4. the amounts owed by and to the co-owners.

So ‘simplified’ does not mean ‘a spreadsheet of expenses’. A simple list of invoices paid does not tell you who owes what to the association, or how much each fund holds. Yet that is the information a notary asks for when a unit is sold.

Our view: simplified accounts are an option, not an obligation. In a building close to the threshold, or one that changes syndic regularly, we advise asking for double-entry accounts under the standard chart. They make checking at the general meeting easier, and make it easier for a successor to take over the accounts.

How is the owners' association chart of accounts organised?

The chart for owners' associations is modelled on the one for companies, but it is lighter. It has no class 3 (stocks), which is irrelevant for a building. An unused account does not have to be opened.

In the CBN/CNC worked example, calls for funds are tracked unit by unit in class 4, with one account for reserve fund calls and another for working capital fund calls. In class 5, a bank account is reserved for each fund. Income in class 7 also separates the advance payments and the interest of each fund. This end-to-end separation makes it possible to prove that reserve fund money has not been used to pay for the heating.

Balance sheet and income statement: what to read before the general meeting?

The Royal Decree refers to an annual inventory. In practice, the syndic presents it as a balance sheet, which captures the position at the closing date, and an income statement, which sets out the expenses (class 6) and income (class 7) for the year.

On the balance sheet, four lines deserve your attention:

• amounts owed by co-owners: a high figure, or one rising from year to year, signals unpaid charges. Ask for the list by unit and see the page on a co-owner not paying;
• amounts owed to suppliers: old unpaid invoices can lead to late payment charges or a cancelled contract;
• cash and bank: each balance must match the bank statement at the same date;
• the balance of each fund: it must match what the budget and the GM decisions led you to expect.

On the income statement, compare each item with the budget voted the previous year. A variance is not a fault, but the syndic must be able to explain it. How those costs are split between the units is set out in a separate document, the annual service charge statement.

Who checks the accounts, and with which documents?

Each year, the general meeting appoints an accounts auditorGlossaryPerson, whether or not a co-owner, appointed each year by the general meeting to check the accounts of the owners' association. Their powers and duties are set out in the house rules. See the glossary, who may or may not be a co-owner (art. 3.91 Civil Code). Their powers and duties are set out in the house rules. In a small building, this is often a co-owner who is comfortable with figures; nothing prevents you from giving the job to an accountant.

To carry out a useful check, the accounts auditor asks for:

• the trial balance and the general ledger for the year;
• the bank statements for all the accounts of the owners' associationGlossaryLegal entity that brings the co-owners together and whose sole purpose is the preservation and management of the building. It acquires legal personality as soon as a first unit is transferred, provided the deed of division and the co-ownership regulations have been transcribed. See the glossary on the closing date;
• the invoices, in chronological order, with proof of payment;
• the GM minutes that authorised extraordinary expenditure;
• the record of calls for funds and payments by co-owner.

Each co-owner also keeps their own right of inspection: the syndic must allow access to all documents or information of a non-private nature relating to the co-ownership (art. 3.89, § 5).

What happens to the accounts when the syndic changes?

The outgoing syndic must hand over to their successor the entire management file for the building, accounts included, within thirty days of the end of their mandate (art. 3.89, § 5). Accounts kept under the standard chart, with a signed year-end inventory, make that handover much simpler: the new syndic takes over the opening balances without having to rebuild years of transactions.

If you are preparing a change, ask for an inventory drawn up at the exact date of departure, not the one for the last closed financial year. The full process is set out in the page on changing your syndic. To place the accounts within the building's finances as a whole, go back to the page on co-ownership service charges.