What is the ALUR works fund in a co-ownership?
The works fund, introduced by the ALUR Act, is a mandatory financial reserve in most co-ownerships. It is fed by an annual contribution voted at the general meeting, the amount of which cannot be less than 5% of the provisional budget. It serves to finance future works on the common areas and equipment.
A mandatory savings reserve to anticipate works
The works fund was created by the ALUR Act of 24 March 2014, with entry into force on 1 January 2017. Its aim is to progressively build up a reserve enabling the co-ownership to cope with major works without excessively heavy exceptional calls for funds.
It is now governed by Article 14-2-1 of the Act of 10 July 1965, rewritten by the Climate and Resilience Act of 22 August 2021. The fund is mandatory in every co-ownership intended wholly or partly for residential use, whatever the number of lots, once ten years have elapsed since the acceptance of the building works. The former exemption for small co-ownerships is gone; the obligation came into force in stages between 2023 and 2025 depending on the number of lots, the largest co-ownerships first.
The amount and operation of the contribution
The annual contribution to the works fund is voted by the general meeting. Its amount cannot be less than 5% of the annual provisional budget. Where a multi-year works plan has been adopted, it cannot be less than 2.5% of the cost of the works planned either. The meeting may decide on a higher amount.
The sums paid into the works fund are attached to the lots, and not to the co-owners. They are definitively acquired by the co-owners' association: in the event of the sale of a lot, the seller cannot claim reimbursement of the sums they have paid into this fund. This point is essential during a transaction.
- Minimum annual contribution of 5% of the provisional budget, and 2.5% of the works in the multi-year plan once adopted
- Mandatory in every residential building more than ten years old, with no condition on the number of lots
- Fund deposited in a separate bank account in the name of the association
- Sums attached to the lot and not reimbursable to the seller in the event of a sale
- Use decided at the general meeting to finance works
The link with the multi-year works plan
The Climate and Resilience Act of 22 August 2021 reinforced the logic of planning by requiring, in a staggered manner according to the size of the co-ownerships, the drawing up of a draft multi-year works plan (PPT) in residential buildings more than fifteen years old (Article 14-2 of the 1965 Act). The works fund is intended to finance, as a priority, the works provided for by this plan.
The works fund can only be used to finance works and not the day-to-day management expenses. Its use is decided by the general meeting.
Frequently asked questions
Is the works fund mandatory in all co-ownerships?
It is mandatory in every co-ownership intended wholly or partly for residential use, whatever the number of lots, once ten years have elapsed since the acceptance of the building works (Article 14-2-1 of the Act of 10 July 1965, as amended by the Climate and Resilience Act). Buildings less than ten years old are exempt; the former exception for small co-ownerships no longer exists.
Do you get your works fund back when you sell?
No. The sums paid into the works fund are definitively acquired by the co-owners' association and attached to the lot. The seller cannot request their reimbursement. In practice, however, this reserve can be reflected in the negotiation of the sale price.
What is the minimum amount of the contribution?
The annual contribution to the works fund cannot be less than 5% of the provisional budget voted by the general meeting, nor, where a multi-year works plan has been adopted, than 2.5% of the cost of the works it provides for. The meeting can decide on a higher percentage.
Read next
- The ALUR Act: what it really requires of sellers and landlords
- In a co-ownership sale, who pays the charges: the seller or the buyer?
- Which co-ownership documents must be provided at the point of sale (Article L.721-2 of the CCH)?
- Article 26 of the Act of 10 July 1965: which decisions need the double majority?
- Légifrance : Loi n° 65-557 du 10 juillet 1965, articles 14-2 et 14-2-1
- Légifrance : Loi n° 2014-366 du 24 mars 2014 (loi ALUR)
- Légifrance : Loi n° 2021-1104 du 22 août 2021 (loi Climat et résilience), article 171
- Service-Public.fr : Fonds de travaux de copropriété
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