Reserve Fund and Building Manager: What to Check Before Buying an Apartment

· · Tips for Buyers

When choosing an apartment, most of us look at the price, the floor area and the location. We less often ask how the building is managed and how much money is set aside for its maintenance. Yet the reserve fund and the building manager often determine how much living there will cost you month after month, and what condition the building will be in when you come to sell one day.

Below are the checks worth carrying out before signing a preliminary contract or a sales contract.

What is the reserve fund and why does it matter to a buyer?

The common reserve fund (pričuva) is money set aside for the maintenance of the building's common areas and installations and for the management of the building. It is calculated according to the value area of the individual units in the building or according to the co-ownership shares registered in the land registry (zemljišna knjiga). Co-owners pay it into a separate common reserve fund account.

The Act on the Management and Maintenance of Buildings (Official Gazette 152/2024) has been in force since 1 January 2025. The Act sets the minimum reserve fund contribution per square metre of an apartment's value area, and this amount is linked to the standard construction cost price published by the competent ministry. Therefore, check the current amount in the Official Gazette (Narodne novine) or with the building manager.

A high reserve fund contribution is not necessarily bad news. It often means the building is regularly saving for major works. A very low contribution can be a warning sign that repairs are being postponed, with the cost later passed on to new owners.

Questions for the building manager and the co-owners' representative

Before buying, ask to speak with the building manager or the co-owners' representative. The seller can and should help you with this. It is useful to ask the following questions:

  • What is the monthly reserve fund contribution for this apartment, and is an increase planned?
  • Is there an annual or multi-year maintenance programme, and what does it include?
  • How much money is currently in the common reserve fund account?
  • Which major works are planned (façade, roof, lift, installations), and how will they be financed?
  • Are there any debts owed by co-owners or any open disputes concerning the building?
  • Who manages the building, and is there a management agreement?

Among other things, the building manager is obliged to provide co-owners with an annual report on the management of the building, including an overview of reserve fund income and expenses. Ask to see the most recent report. It quickly shows whether money is being spent according to a plan or only to put out fires.

Red flags: debts, postponed repairs and an empty account

An empty reserve fund account combined with an outdated façade, damp in the common areas or a lift that is often out of order is a sign that additional costs are coming your way. The same applies if co-owners cannot reach a decision on a necessary repair for a long time.

Also ask for the minutes of the most recent co-owners' meetings. They show what is being discussed in the building, how many co-owners are active and whether there are conflicts holding up maintenance.

The question of reserve fund arrears is also important. Before signing, ask the seller for confirmation that all obligations to the building have been settled, and have this written into the contract. For the exact legal liability for any debts, consult a lawyer or a notary public, as every case is different.

House rules, co-ownership agreement and short-term rentals

By buying an apartment you become part of a community of co-owners, so the building's rules are binding on you as well. The community regulates its relations through a co-ownership agreement and house rules. Ask to see both documents before buying. The owner is responsible for compliance with the house rules even when guests or tenants use the apartment.

Be especially careful if you are buying an apartment for tourist rental, which is common in Split, Zadar and Pula. Under the law, short-term rental requires the prior written consent of a two-thirds majority of co-owners. In addition, all co-owners whose walls, floors or ceilings border your apartment must agree. Without this, you expose yourself to liability for a misdemeanour.

The co-ownership agreement may also stipulate that parts of the building used for short-term rental pay a higher reserve fund contribution, up to double that of residential apartments. Such a provision directly changes your investment profitability calculation.

A practical plan before signing

So that you don't forget anything, follow a simple order of checks:

  • Ask the seller or the building manager for the reserve fund amount and confirmation that all obligations have been settled.
  • Review the annual maintenance programme and the latest annual report.
  • Read the co-owners' minutes and the co-ownership agreement.
  • Walk through the common areas: staircase, roof, basement, lift, façade.
  • If you plan to rent out or renovate, check whether this is permitted and which consents are required.
  • Anything promised to you verbally should also be put in writing.

These checks take a few days and can spare you unpleasant surprises. They complement the checks on ownership and the occupancy permit (uporabna dozvola), but deal with a different question: how the building functions once you move in.

Conclusion

An apartment is not only what lies within your four walls. The value and comfort of living there also depend on the building, its finances and the people who manage it. Questions about the reserve fund and the building manager are not awkward; they are a sign that you are buying with care.

If you need help checking documentation or preparing questions for the building manager, the Imperium Immobiliare agents in Zagreb, Split, Zadar and Pula will be glad to assist you.

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