Condominium owners’ association – If you own a condominium or are thinking about buying one, sooner or later you will come into contact with the concept of a condominium owners’ association. But what exactly is behind it and what rights and obligations do you have as an owner? In this article, we will give you all the important information about condominium associations in Germany. From the rights to use the apartment to the organization of an owners’ meeting – here you will learn everything you need to know to be a successful part of a homeowners’ association.
Homeowners’ association at a glance
A condominium owners’ association (WEG) is an association of owners of apartments in a common building.
The community of owners can be described like this:
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Community of all owners of a property.
As the owner of your apartment, you are a member of the WEG and have joint responsibility with the other owners for managing the common property, e.g. the staircase, the roof, the facade and the common utilities.
You also decide jointly on maintenance and repairs and on the financing of these measures. It is important to note that every decision in the WEG is made jointly and that you, as a member of the WEG, are also obliged to participate in the decisions and bear the costs.
The WEG at a glance:
- Each owner can represent his right to vote at the meeting of owners
- Each owner has a certain co-ownership share in the common property
- Each member of a WEG must bear costs for the common property
- Each owner is responsible for his or her own special property
- Each owner has to fulfill certain rights and obligations
- Each COA must have certain documents that set out rules and boundaries
The legal basis for a WEG is provided by the Condominium Act. It provides the owners with guidelines and regulations for the proper administration of the WEG. Let’s take a closer look at the Condominium Act (WEG for short).
Condominium Act (WEG)
The German Condominium Act (Wohnungseigentumsgesetz ) is of great importance to all condominium owners in Germany, as it lays down the legal foundations for the organization and management of condominium associations.
The WEG regulates, among other things, the distribution of rights and obligations between the individual owners and the community as well as the management and maintenance of the common property.
There are clear specifications for holding owners’ meetings, passing resolutions and managing funds. The establishment and duties of the management advisory board and the administrator are also regulated in the WEG.
The WEG regulates:
- The distribution of rights and obligations
- The management and maintenance of the common property
- The conduct of the meeting of owners
- The decision making
- The management of funds
The owners’ meeting is guided by the laws of the WEG:
In a WEG, every member is involved and must fulfill certain rights and obligations. In the next section, we will explain what you have to do as an owner.
Rights and obligations of the owners
As an owner in a homeowners’ association, you have certain rights and obligations. You have the right to use and manage your apartment, but you must also consider the common interests. This means that you must abide by jointly agreed rules and regulations that apply to the building and its residents.
Furthermore, as an owner in the homeowners’ association, you are obligated to participate in the management and maintenance of the common areas and facilities.
Rights of use to one’s own home
As the owner of your apartment in a homeowners’ association, you have the right to use and manage your apartment. It is up to you whether you live in the apartment yourself or rent it out. For example, you can renovate your apartment or buy new furniture, as long as you do not interfere with other owners.
The own apartment may be managed and designed by the owner, as long as the common property is not affected.
However, you must also consider the interests of the other owners and the community when using your apartment. For example, you may not make any structural changes to your apartment that could affect the appearance of the building or cause problems with other apartments.
Rights of use to common property
As an owner in a homeowners’ association, you are responsible for managing and maintaining the common areas and facilities together with the other owners. This includes, for example, the staircase, the elevator, the roof, the facade, the outdoor facilities and, if necessary, the heating system.
These rights and obligations accrue to owners on the common property:
- Management and maintenance of common areas
How these costs are financed and distributed is explained in the next section.
Financing common costs
As an owner in a homeowners’ association, you are obliged to contribute to the common costs of the association. This includes, for example, the costs for the management and maintenance of the common areas and facilities, but also the costs for the operation of the elevator, the waste disposal or the water supply.
The costs are usually calculated according to the ratio of your share in the common property. For this purpose, the declaration of division specifies which share you have in the homeowners’ association. This distribution of costs is also called the cost distribution key.
In addition to the running costs, larger maintenance or renovation measures may also be required, which are associated with a higher financial outlay. For this purpose, a reserve is usually formed, which is regularly replenished by the owners with a certain amount. This reserve is used to finance larger repairs and maintenance measures without the need for additional funds to be raised by the owners.
These costs are incurred in a WEG:
- Costs for the management and maintenance of common areas
- Costs for the operation of the elevator, waste disposal or water supply
- Maintenance reserves
The costs incurred are discussed at the owners’ meeting:
Organization of a homeowners association
The organization of a homeowners’ association is an important part of living together. There are various committees and bodies that are responsible for managing the community.
The most important body is the owners’ meeting. Here, all owners meet once a year to make important decisions and to discuss the concerns of the community.
Another important body is the management advisory board. This is elected by the owners’ meeting and supports the administrator in the management of the community.
The administrator is the executive body of the condominium owners’ association. He or she takes care of the administration of the community and ensures that all necessary work is carried out.
The most important instances of the WEG at a glance:
- WEG administrator
- Management Advisory Board
- Owners’ meeting
Now let’s take a closer look at the individual instances.
Administrator of the WEG
The administrator is the executive body of a condominium owners’ association and is responsible for the administration of the community. This includes, among other things, the organization and monitoring of maintenance measures, the preparation of accounts and communication with the owners and the various committees of the community.
The duties of the administrator include:
- Organization and monitoring of maintenance measures
- Preparation of accounts
- Communication with the owners and the various committees
The choice of a suitable administrator is therefore of great importance. As a rule, a professional management company is commissioned that has the necessary knowledge and experience. However, voluntary management by an owner is also possible.
Management Advisory Board
In addition to the administrator, there is also the management advisory board. The management advisory board consists of at least three owners. This body is elected by the owners’ meeting and has the task of supporting and monitoring the manager. However, the management advisory board has no decision-making authority and can only make recommendations.
The Management Advisory Board at a glance:
- Composed of at least three owners
- Elected by the owners’ meeting
- Supports and controls the administrator
The owners’ meeting is the highest decision-making body and meets at least once a year. Its task is to discuss and decide on important matters concerning the community.
The owners’ meeting is convened by the administrator or by an owner. Certain deadlines and formal requirements must be observed. As a rule, invitations must be issued in writing at least two weeks before the meeting. The invitation must state the items on the agenda as well as the place, date and time of the meeting.
The typical topics of an owners’ meeting include the adoption of the business plan, the election of the manager, the vote on maintenance measures or the definition of house rules. The owners’ meeting also decides on the amount of the monthly house fees.
The community of owners at a glance:
- Meets at least once a year
- Advises on important matters of the community
- Convening takes place through the administrator