Housing company board duties: what the law requires in practice
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You do not need a background in construction to sit on a housing company board. The Limited Liability Housing Companies Act (asunto-osakeyhtiölaki) asks a lot of the board, but many of its duties can be handed to the property manager and the maintenance company, as long as the board stays informed about the condition of the building.
What the law requires of the board
The board’s basic duty is set out in chapter 7, section 2 of the Limited Liability Housing Companies Act (opens in a new tab) (in Finnish). The board is responsible for the company’s administration and for the proper organisation of the upkeep of the property and buildings and the company’s other activities. It is also responsible for ensuring that the supervision of the accounts and financial management is properly organised.
The key word in the provision is organising. The board does not repair the building, keep the accounts or pay the bills itself. Its task is to make sure that this work has been assigned to someone, that those doing it get the instructions they need and that the board is kept informed of how the work is going. If, for example, there has been no information on the condition of the roof for years, property maintenance is not properly organised, even if a maintenance contract is in force.
The duty is complemented by chapter 1, section 11 of the Act: the board and the property manager must act with due care to promote the company’s interests. Due care does not require technical competence. It requires that sufficient information, and where necessary an expert assessment, is obtained as the basis for decisions. Neglecting the duty of care can lead to personal liability for damages, which is covered in more detail in the article the responsibilities of a board member.
The Act also gives the board an annual task. The annual general meeting must be presented with a written report on maintenance needs over the next five years that will significantly affect living in the building, the maintenance charge or other housing costs, together with a report on significant maintenance and alteration work carried out in the company (chapter 6, section 3). Read more about the maintenance needs report.
The board’s authority has a limit. Measures that are unusual or far-reaching in view of the company’s size and activities, or that substantially affect the use of the apartments or the charges, belong to the general meeting. The board prepares them, but the shareholders decide.
What can be left to others and what cannot
The property manager looks after property maintenance and day-to-day administration according to the board’s instructions (chapter 7, section 17), and the maintenance company does what has been agreed in the maintenance contract. So tasks can, and should, be given to professionals. Keeping track of the whole, however, remains the board’s job.
In practice, a property manager usually looks after several housing companies, and maintenance staff go round many properties every day dealing with fault reports and work orders. Anything nobody has ordered is easily left unchecked. This is not anyone’s negligence; it is simply that work is done according to contracts and orders. The board’s task is to notice which things are not covered by anyone’s contract. The division of work between the property manager and the board is explained in the article the housing company property manager.
Things that easily go unmonitored
A few examples of building components whose condition can remain unknown for years, even when maintenance is working well:
- Electrical panels. According to Tukes (the Finnish Safety and Chemicals Agency), loose connections and dust building up in electrical equipment can create a risk of electric shock or fire. Find out when the panels were last inspected and who carried out the inspection. Inspections and repairs are a job for an electrical professional. More in the article electrical safety in a housing company.
- Pipe supports. Supports can work loose, be damaged or be missing after earlier renovations. If the supports fail, the strain on the joints increases and a leak may follow. Read about checking pipe supports.
- Balcony doors. They are exposed to moisture, frost and sun. One door that does not close properly is a small thing, but the same fault in ten apartments is already a project. See balcony doors.
- Roof and rainwater. Roof penetrations, roof drains and gutters. Even a small leak can let moisture into the structures long before it shows inside.
- Yard and perimeter drains. The ground should slope away from the building, and there should be information on how the perimeter drains are working. Many basement moisture problems start outside.
The interiors of the apartments are especially hard to monitor, because the board cannot see into them. Floor drains, pipe supports and smoke alarms can be checked in every apartment at once on an apartment round, so that the results are comparable from one apartment to the next.
Four questions for every system
A good way to start is to go through the same four questions for every key building component and system:
- When was this last inspected?
- Who carried out the inspection?
- What was found?
- What has been done about the findings?
If there is no answer to one of the questions, that is a finding in itself. Often the very things nobody knows anything about are the ones to check first.
The maintenance history also tells you a lot. If the same fault comes back year after year, for example damp in the same staircase or lock faults on the same door, there is often an underlying cause that has not been fixed. Ask the maintenance company for a summary report of the work done and look at it over periods of at least a year. Monitoring indicators and the board’s annual calendar are covered in the article managing a housing company.
The question determines the answer you get
An expert answers the question they are asked. If the board only asks a contractor how much a new roof costs, it gets a price. A better basis for a decision comes from also asking whether the roof’s service life can still be safely extended, what postponing would cost, whether a partial repair would be enough, and how the solution would affect maintenance in the years to come.
For the property manager
- What are the company’s biggest risks right now?
- Which repairs can still be planned without haste, and which cannot wait?
- Is the maintenance needs report up to date, and what information is it based on?
For the maintenance company
- Which faults recur year after year?
- Which parts of the building show the most wear?
- Which observations should be investigated more closely?
For a contractor or designer
- Why do you recommend this particular solution, and what other options are there?
- How long is the solution’s service life and what are its life-cycle costs?
- What happens if the repair is postponed?
For the board itself
- What has changed since the last inspection?
- Which item needs monitoring, even if it does not need repairing yet?
- What do we not yet know, and should we find out before deciding?
Many good questions only come up on site: why does water collect here, where did that mark on the facade come from, why does the technical room smell? That is why the board should walk round the building at least once a year. You will find tips for the walk-through in the article the building walk-through.
Practices that make the work easier
The following are practical recommendations, not legal obligations.
Make the state of the building a standing item. Go through open observations at every board meeting and always after an inspection or walk-through.
Record observations and reasons. Boards change; the building stays. When inspections, repairs and the reasons for decisions are gathered in one place, for example in the maintenance log (huoltokirja), the next board can quickly get to grips with the situation.
Assess decisions over the long term. A building’s life cycle spans decades. The cheapest option in this year’s budget is not always the most economical over ten years.
Keep the threshold for asking questions low. A simple question from a new member, such as “What is this estimate based on?”, can prevent an expensive mistake. A forward-looking board cannot eliminate every surprise, but it will spot most problems while there is still time to respond calmly.
This article provides general information and does not replace case-specific legal or technical advice.
