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New rules for apartment owners in Germany

Veröffentlicht von Dr. Andreas Kaiser am 05.12.2020

Major provisions of the WEG reform 2020

  • Extension of separate ownership, § 3 (2).
  • Renovation and modernization are becoming easier, §§ 20, 21.
  • Owner meetings and decision making are simplified, §§ 23, 24, 25.
  • Right to inspect administrative documents, § 18 (4).
  • More flexible decision making on how to pay the costs, § 16 (2).
  • Administrative Advisory Board will be made more flexible, § 29.
  • Entitlement to a certified administrator, §§ 19  (2) no.6, 26a (1).
  • More managing powers for administrators, § 27.
  • Administrator’s power of attorney, § 9b (1).
  • Easier removal of the administrator, § 26 (3).
  • Land register entry of resolutions amending the agreement, § 10 (3).
  • Early recognition of future apartment owners community, § 8 (3).
  • Subject and content of the annual statement, § 28 (2).
  • Deprivation of property, § 17 (2).
  • Residential tenants have to tolerate construction work, § 15.

Commentary on selected new WEG provisions 

  Text of provision (unofficial translation)

§ 3 

(1) Co-ownership (Section 1008 of the Civil Code) of a plot of land may be restricted by way of a contract between the co-owners such that, in deviation from Section 93 of the Civil Code, each co-owners is granted ownership of a specified apartment or of specified non-residential areas of a building erected or to be erected on the plot of land (separate ownership). Parking spaces are considered areas within the meaning of sentence 1. 
(2) The separate ownership can be extended to a part of the plot of land located outside the building, unless the apartment or the non-residential areas do not remain economically the main thing. 
(3) Separate ownership should only be granted where the apartments or other areas are self-contained and parking spaces and parts of the plot of land outside the building are determined by dimensions in the partition plan.
The reform of the WEG extends the ability to own property to open areas on the plot of land such as parking spaces in the courtyard, gardens and terraces. Previously it was only possible for apartment owners to own separate property in the apartment and in specified non-residential areas of a building (for example office or shop space).
The previous practice of establishing special use rights in open areas that are similar to separate ownership led to legal uncertainty.
In fact, it usually helps if special use rights are entered in the land register. But a distinction is made between right of use and right of ownership. In comparison to a special use right, separate ownership confers a stronger legal position.
§ 8 (3)
(3) Anyone who has a claim to the transfer of separate ownership against the sharing owner, which is secured by a reservation in the land register, is considered towards the community of apartment owners and the other apartment owners to be the owner of the apartment instead of the sharing owner, as soon as possession to areas belonging to the separate ownership was handed over to him. 
In order to eliminate legal uncertainties in connection with the legal figure of the “evolving apartment owner community”, the WEG reform provided that the community of apartment owners is created as a one-person community, in many cases the property developer or investor, with the creation of the land registers (sec.9a). In future, first-time buyers of residential property will be able to take part in the decision-making process as soon as the property is handed over. 

§ 9b (1)

(1) The community of apartment owners is represented by the administrator in and out of court, but only on the basis of a resolution by the apartment owners when concluding a property purchase or loan agreement. If the community of apartment owners does not have an administrator, the apartment owners jointly represent it. A restriction of the scope of the power of representation is ineffective towards third parties. The administrator’s power of representation exists for all the community in external relationships, is however restricted for the conclusion of a loan agreement or a property purchase agreement, which require a resolution by the apartment owners. Such a resolution can either relate to a specific transaction or to transactions of this type in general.

§ 10 (3)

(3) Any agreements by which the apartment owners regulate their relations inter se and which supplement or deviate from the provisions of this Act, the amendment or cancellation of such agreements and resolutions made on the basis of an agreement, shall be binding on the successor in interest [Sondernachfolger] of an apartment owner only if they have been registered in the Land Register as separately owned property. In addition, resolutions against the successor in interest of an apartment owner do not need to be entered in the land register to be effective. Resolutions changing the agreement, which were made on the basis of a statutory or contractual opening clause, have been effective against buyers of residential property according to the former legal situation even without entry in the land register. In order to ensure better protection of buyers, resolutions that the owners have made on the basis of a legal opening clause need to be entered in the land register in order to have an effect on legal successors.
§ 15 (Third Party Obligations) 
Anyone who uses an apartment without being an apartment owner has to tolerate the following in relation to the community of apartment owners and other apartment owners: 
1. the preservation of common and individual property, which was announced to him in good time; Section 555a (2) of the Civil Code applies accordingly; 
2. Measures that go beyond maintenance that have been announced in writing at least three months before their start; Section 555c paragraph 1 sentence 2 numbers 1 and 2, paragraphs 2 to 4 and Section 555d paragraphs 2 to 5 of the Civil Code apply accordingly. 
In order to harmonize tenancy and condominium law, tenants of separate property units will in future be obliged to tolerate construction work in the condominium complex.
The WEG reform also provides for harmonization with regard to the billing of operating costs. In the case of rented condominiums, the cost allocation applicable in the WEG from now is also decisive in the relationship between the renting owner and the tenant (Section 556a (3) new Civil Code). Formerly, the proportion of living space was decisive under tenancy law, while the WEG provides for a cost allocation according to proportion of co-ownership shares.
§ 16 (2) (2) The costs of the community of apartment owners, in particular the administration and joint use of the jointly owned property, must be borne by each apartment owner in proportion to their share (paragraph 1, sentence 2). The apartment owners can decide on a distribution that deviates from sentence 1 or from an agreement for individual costs or certain types of costs. Owners will be able to make more extensive decisions on cost allocation. While this power was limited according to the former legal situation to the allocation of costs for measures in individual cases and required a qualified majority, the new law provides that the owners can decide with a simple majority of votes and independently of the individual case on the allocation of individual costs or on specific types of costs.
§ 17 (2) (2) The prerequisites of Paragraph 1 apply in particular if the apartment owner repeatedly and grossly violates the obligations incumbent on him under Section 14 Paragraph 1 and 2 despite a warning. It is now generally formulated that a violation of the obligations that exist towards the community can justify deprivation of apartment ownership. By way of example this may be a breach of the obligation to bear the costs, violations of the house order, offensive behaviour towards other owners or the administrator. Such an owner can be forced to sell his apartment.
§ 18 (4) (4) Every apartment owner can request the community of apartment owners to inspect the administrative documents. This is a new statutory right to inspect the administrative documents in relation to the community.
§ 19 (2) no. 6 (2) Proper administration and use include in particular 
6. the appointment of a certified administrator in accordance with § 26a, unless there are fewer than nine separate ownership rights, one apartment owner has been appointed administrator and less than a third of the apartment owners (§ 25 paragraph 2) require the appointment of a certified administrator.
Every apartment owner’s right to request the appointment of a certified administrator exists for the first time two years after the WEG reform came into force so that the certification process can be developed and introduced. People who have already been appointed as administrators of an apartment owners' community when the WEG reform came into force are considered towards the owners to be certified administrators for another three and a half years. Administrators who already have practical experience should be given some time to take the exam.
An exception to the right to appoint a certified administrator exists in smaller installations for cases of self-administration.
§ 20 (1) (Structural changes)
(1) Measures that go beyond the proper maintenance of the communal property (structural changes) can be resolved upon or permitted to an apartment owner by resolution.
Resolutions on the implementation of structural changes to the common property or the approval of structural changes are simplified. Resolutions are now possible with a simple majority without the consent of all owners affected by a measure.
It is of high practical importance that minority owners can no longer block construction measures. To ensure the protection of the minority owner, only structural changes that fundamentally redesign the residential complex or that unreasonably disadvantage an apartment owner vis-à-vis others without his consent may not be decided or permitted; they cannot be demanded either (Section 20 (4) WEG).
§20 (2) (2) Every apartment owner can request appropriate structural changes that serve
1. the use by people with disabilities, 
2. charging electrically powered vehicles,
3. burglar protection and 
4. connection to a telecommunications network with a very high capacity. 
A decision on the implementation is to be taken within the framework of proper administration.
In order to simplify the renovation and modernization of residential complexes, every apartment owner is entitled to the installation of a charging facility for an electric vehicle, barrier-free expansion and conversion, measures for burglary protection and access to a fast internet connection at their own expense .  In principle, the owner who demanded or received the permission to the measure has to bear the cost and is entitled to use (sec. 21(1). Costs include the construction costs and the follow-up costs for use and maintenance.
§ 21 (2)  (2) Subject to Paragraph 1, all apartment owners must bear the costs of a structural change in proportion to their shares (Section 16 Paragraph 1 Clause 2), 
1. that was resolved with more than two thirds of the votes cast and half of all co-ownership shares, unless the structural change is associated with disproportionate costs, or 
2. which cost are amortized within a reasonable period of time.
In principle, those owners who have agreed to the structural change have to bear the costs of the measure. However, all apartment owners have to bear the costs according to their co-ownership share if the measure has been resolved with more than two thirds of the votes cast and more than half of the co-ownership shares. In turn, the costs should not be borne by all owners if the structural change is associated with disproportionate costs. This restriction is intended to protect individual owners from excessive financial demands.
A distribution of the costs to all owners is also provided if the costs of the measure amortize within “a reasonable period of time “, usually ten years. The focus is on energy-saving measures, such as the installation of a new heating system, which can lead to sustainable cost savings.
§ 23 (1) (Meeting of Apartment Owners)
(1) Matters which the apartment owners may decide by resolution pursuant to this Act, or pursuant to an agreement reached between the apartment owners, shall be dealt with by the passing of a resolution in a meeting of the apartment owners. The apartment owners may decide that apartment owners can take part in the meeting without being present at the meeting and exercise all or some of their rights in whole or in part by means of electronic communication.
Through the reform of the WEG, owner meetings can be held more flexible and opportunities offered by digitization can be better used. 
The owners have the power to decide to enable owners to take part in the owners' meeting online. However, this does not include the possibility of abolishing face-to-face meetings by majority vote in favour of pure online owner meetings. Many people are not well acquainted using conference software and it will be difficult in practice to safeguard efficient exercise of rights by means of electronic communication to avoid subsequent contestation of faulty resolutions.
§ 23 (3) (3) A resolution shall be valid even without a meeting if all the apartment owners give their consent in text form to the resolution.  The use of text form instead of written form is intended to open up the possibility of using electronic means of communication such as e-mail, internet platforms or apps in order to pass a circular resolution.
§ 23 (3) sent. 2 The apartment owners can decide that a majority of the votes cast is sufficient for a single item. The owners can decide with regard to specific resolution items that a decision can be made by means of a circulation procedure with a majority of votes.  An application example is the case that a resolution in an owners' meeting is not possible due to insufficient information. The owners could then decide to make up for the resolution by means of a majority vote in circulation.
§ 24 (2) 2) The administrator shall be obliged to convene a meeting of the apartment owners in the circumstances specified by agreement between the apartment owners and otherwise when a meeting is requested in text form by more than one quarter of the apartment owners, stating the purpose and the reasons. Owners can request a convocation in text form, e.g. by e-mail instead of the previous written form. In addition, it is made easier for apartment owners to convene an owners' meeting themselves if it is not possible for the administrator or the chairman of the Administrative Advisory Board to convene.
§ 24 (4) sent. 2 In the absence of any circumstances requiring particular urgency, at least three weeks’ notice of the meeting shall be given. The notice period for owners' meetings has been extended from two to three weeks.
§ 24 (6) sent. 1  (6) All resolutions passed during the meeting shall be recorded immediately in writing.  It is now expressly stipulated that the minutes of the owners' meeting must be drawn up immediately (without undue hesitation) after it has ended.
§ 25(3) (3) The meeting shall be quorate only when the apartment owners present and eligible to vote represent more than one half of the co-ownership shares, calculated by reference to the size of such shares as registered in the Land Register. Previously, decisions could be prevented by leaving the meeting or not attending at all if then less than the required quorum of more than 50% of co-owner shares attended. This possibility no longer exists as section 25 (3) of the WEG in its previous form is deleted. From now on, an owners' meeting will also have a quorum regardless of the number of owners respectively co-ownership shares present or represented. This should avoid the effort and costs for repeat meetings. 

§ 26 (3)

(3) The administrator can be recalled at any time. A contract with the administrator ends at the latest six months after his removal. Apartment owners' communities will be able to separate from an administrator more easily than before. The dismissal of the administrator is no longer dependent on the existence of an important reason.
§ 27 (1) (Duties and Powers of the Administrator)
 (1) The administrator is entitled and obliged vis-à-vis the community of apartment owners to take the proper management measures that 1. are of secondary importance and do not lead to significant obligations or
2. are necessary to meet a deadline or to avert a disadvantage. 
The administrator's decision-making and representation powers have been expanded. Now the administrator can decide on his own responsibility, i.e. without a resolution by the owners on measures that are of minor importance and do not lead to significant obligations.  The size of the building should be an indicator of the importance of a measure and the significance of the resulting obligations. As the size of the building grows, the number of measures that the administrator can and must take grows accordingly. Depending on the individual case, in addition to minor repairs, the conclusion of supply and service contracts to a limited extent or the judicial enforcement of house money claims should belong to the group of measures that the administrator can carry out independently.
§ 27 (2) (2) The apartment owners can restrict or expand the rights and obligations according to paragraph 1 by resolution. Owners have the opportunity to define those measures themselves that they want the administrator to be responsible for. To do this, they can set up value limits or catalogues of measures. It is also possible to make individual actions by the administrator (e.g. payments above a certain amount) dependent on the consent of an owner, the Administrative Advisory Board or a third party.
§ 28 (2) (2) At the end of the calendar year, the apartment owners decide to demand additional payments or to adjust the agreed advances. For this purpose, the administrator has to prepare a statement of the business plan (annual statement), which also contains the income and expenses. The WEG reform provides for new regulations on annual accounting. The resolution on the annual billing is limited to the peak billing period; the arithmetic unit itself, however, is no longer the subject of a resolution in the future.  
§ 28 (4) (4) At the end of a calendar year, the administrator shall prepare an asset report that contains the status of the reserves referred to in paragraph 1 sentence 1 and a list of the main joint assets. The asset report is to be made available to every apartment owner. An asset report must include a description of the maintenance reserve and a list of the main joint assets. The name "Erhaltungsrücklage” (“maintenance reserve") shall make it clear that it is not just a balance sheet item, but available funds.
§ 29 (1) (Administrative Advisory Board)
(1) Apartment owners can be appointed as members of the administrative advisory board by resolution. If the administrative advisory board has several members, a chairman and a deputy must be appointed. The administrative advisory board is convened by the chairman as required.
The regulations on the administrative advisory board are also being adjusted by the reform of the WEG. Now apartment owners can flexibly determine the number of advisory board members by resolution. The requirement of three advisory board members in the previous law is no longer applicable.
§ 29 (2) (2) The Administrative Advisory Board supports and monitors the administrator in the performance of his duties. The business plan and the annual accounts shall be examined by the administrative advisory board and attach its opinion  before the resolutions according to § 28 paragraph 1 sentence 1 and paragraph 2 sentence 1 are taken.  The administrative advisory board is expressly given the power of  supervision of the administrator as a task area.
§ 29 (3) (3) If members of the Administrative Advisory Board are active free of charge, they are only responsible for intent and gross negligence. In order to motivate more owners to make themselves available as a member of administrative advisory board, the liability of honorary advisory board members is limited to intent and gross negligence.

Zuletzt geändert am: 11.03.2021 um 08:46

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