New maintenance schedule guidelines for rental properties

A number of new rules in the Danish law of landlord and tenant came into force on 1 July 2015, including the rules for drawing up a so-called rolling 10-year maintenance schedule. The Danish Ministry of Immigration, Integration and Housing has just published guidelines and a statutory order specifying the detailed maintenance schedule rules. Landlords should note that the maintenance schedule is to be drawn up before 1 July 2016.

The maintenance schedule rules apply to landlords of private rental properties subject to parts II-IV of the Danish Residential Rent Regulation Act, so-called "large properties", meaning private rental properties that as per 1 January 1995 contained more than six residential flats situated in municipalities to which parts II-IV of the Danish Residential Rent Regulation Act apply.

Properties subject to parts II-IV of the Danish Residential Rent Regulation Act and which have been broken up into owner-occupied flats where the owner of the owner-occupied flats that have been let does not have a controlling interest in the owners' association are exempt from the maintenance schedule rules.

The contents of the maintenance schedule

The plan must include major planned and periodical repairs, including renewals, for a period of ten years onwards. The schedule can cover a longer period than ten years but not a shorter period.

The schedule must contain a specification of:
  1. The major repairs that are necessary in order for the property to be in a reasonable state of repair and condition
  2. The dates of the repairs
  3. An estimate of the costs necessary to comply with the schedule.

The landlord is under an obligation to revise and update the schedule every year before 1 July. The update is to cover the works included in the current plan as well as the works in the subsequent 10-year period.

In addition to the requirement that the maintenance schedule must be in writing, the law does not specify any requirements as to form when drawing up the maintenance schedule. The landlord is free to choose whether the landlord itself or an advisor is to draw up and revise the schedule. But the landlord should note that both in properties with and without tenant representation the tenants are entitled to be informed of the maintenance schedule if a request to such effect is made.

In particular, the landlords of properties with tenant representation must note that the maintenance schedule is to be drawn up and revised in collaboration with the tenant representatives. The landlord must also invite the tenant representatives to draw up the maintenance schedule and to the annual revision of the maintenance schedule.

Costs

The costs relating to drawing up the maintenance schedule can be included as a separate entry in the property operating budget. The cost can be calculated to be the repayments on a normal 20-year mortgage loan. The cost relating to the annual revision of the maintenance schedule can also be included, the first time in 2017, when the maintenance schedule is to be revised and updated for the first time.

Compliance

In order to ensure compliance with the rules it is stipulated in the Danish Residential Rent Regulation Act that the landlord can lose the right to charge amounts for the exterior maintenance under sections 18 and 18b of the Act if a maintenance schedule is not drawn up and the tenants bring an action before the Danish Rent Tribunal.

The landlord must exercise care if it decides not to carry out the work as it is written in the comments on the Danish Residential Rent Regulation Act that it is for the landlords to prove that it has not been necessary to carry out the repairs in the maintenance schedule. If the landlord cannot discharge such burden of proof, the Danish Rent Tribunal may order the landlord to do the necessary repairs in question. A landlord is therefore well advised not to be too optimistic when specifying and describing the future repairs.

It is important that the landlord studies the maintenance schedule rules and makes sure that such schedule can be drafted in compliance with the current rules including before the deadline of 1 July 2016.

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