If you buy your own home, you not only get four walls of your own, but usually also several new neighbors. If your home is a condominium or a townhouse, you are even more closely connected with the other owners. Because they are all members of the same homeowners’ association.
In this guide, we’ll show you what this association is all about, what rights and obligations it entails, and what it means for your everyday life.
When is a homeowners’ association?
In a owners’ association you automatically become condominium or a townhouse buy. This is namely "the entirety of all apartment owners within a condominium complex".
According to § 9a abs. 1 WEG, the community of owners is also referred to as "community of apartment owners" or "condominium owners’ association" designated. the latter term is abbreviated as WEG, as is the law on condominium owners, which sometimes leads to confusion.
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As a member of the owners’ association, you are not only the owner of your apartment, but you also co-owner of the entire property. All decisions concerning the entire house must therefore be agreed with the other owners. This can involve, for example, structural measures or the level of reserves.
Condominium Act (WEG): the legal basis of the owners’ association regulates their rights and obligations. The law distinguishes between special ownership, partial ownership and common ownership (§ 1 WEG). In addition, it makes specifications for the apartment owners’ meeting (§ 23 WEG). Read more below.
What the owners’ association decides?
The homeowners’ association basically decides on everything that has to do with the entire property. As a rule, this happens with owners’ meetings, to which a property manager appointed by the community invites at least once a year. The resolutions are recorded in minutes.
Lead the decisions to costs, for example, if the house is to be renovated or access routes are to be renewed, you must participate as part of the owners’ association. exactly how much you have to pay usually depends on the size of your property.
Tip: before buying an apartment or townhouse, ask to see the minutes of the owners’ meetings. This is how you can tell how well the owners’ association works together, whether there are any troublemakers, or whether decisions tend to be straightforward.
Since the WEG reform at the end of 2020 modernizations such as the installation of new windows, facade insulation or the installation of a photovoltaic system are easier to implement. Since then, the owners’ association has been allowed to decide on such structural changes with simple majority decide.
Only those owners who have voted in favor of the measures must pay. Unless, over time, these yield income for everyone or the decision was made with at least a two-thirds majority and half of the co-owners’ shares.
Good to know: since the end of 2020, apartment owners have also had the right to install their own charging station for their e-cars. You can request the consent of the other owners if the structural changes to the common property, such as basement walls, power lines and house connections, are appropriate.
What belongs to separate property, common property and partial property??
In order to distribute costs fairly among the members of the owners’ association, it must be clear who owns what in the building as a whole and on the property. These ownership shares are either contractually agreed or set out in the so-called declaration of division listed. This distinguishes between special property, common property and partial property.
To special property do you own the apartment or the terraced house?. In addition, this includes further sole ownership of rooms that belong to the apartment or the house but are not used for residential purposes. This can be a garage or a cellar. Other examples of condominiums are:
- Floor and wall coverings, parquet, laminate, tiles, wallpaper
- Sanitary facilities including fittings
- Fitted kitchens
- interior doors of your apartment or house
- Non-supporting walls
- utilities within your apartment or house
Special ownership is entered in the land register. It may be used exclusively by you. at the same time you alone are responsible for its maintenance.
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The opposite is true for the common property. This can be used by everyone and must be paid for collectively if repairs or renovations are necessary. For this purpose there is the so-called maintenance reserve, into which you as the owner regularly pay. Examples of common property are:
- Staircase
- Facade
- Exterior doors of your apartment or house
- Elevators
- roofs
- heating systems
- Load-bearing walls
- Supply lines to the entrance of the apartment or house
- screed
- windows
- Ceilings
A garden, swimming pool or fitness room can also be part of the common property if they are accessible to all owners. For common property, however, they may also include rights of use agree.
An example of this would be the exclusive use of a certain part of the garden. Because it remains common property, you are not allowed to make major structural changes on your own.
Partial ownership is made up of the separate ownership of those rooms or areas that are not used for residential purposes and their co-ownership share of the common property (§ 1 abs. 3 WEG).
declaration of division: it specifies how the ownership shares in the overall property and in the land are distributed. It consists of the partition plan, the certificate of completion and often also the community regulations. The partition plan shows the location and size of the parts of the building and how they are divided among the owners. The certificate of completion shows which parts of the building are structurally separate. The community rules include, among other things, the rules for the owners’ meeting and the distribution of costs. It may be supplemented by house rules. Every declaration of partition must be notarized and entered in the land register.
What is in the community and house rules?
The community order (gemo) regulates all rights and duties of the owners among each other. It is determined in the owners’ meeting and may only be changed if all owners agree to it. They can be supplemented by house rules. If there is no gemo, the residential property law applies.
Community and house rules can include the following areas:
- Regulations governing the use of the residential property
- distribution of the voting rights of the co-owners
- Distribution of costs among the owners
- Regulations for the repair of the residential building
- Regulations on the appointment of a manager
- Regulations for the use of garden and terraces
- Regulations on playgrounds and recreational facilities within the building
- rules for keeping pets
- house music regulations
- Determination of rest periods
- Organization of the stair cleaning
Is property management obligatory for condominiums??
Yes, this is what the home ownership law provides for. The owners must agree on a common property management, which takes care of all organizational tasks for you.
This includes, for example, taking care of a janitorial service The property manager takes care of the property, commissions workmen when repairs are needed, or advises the owners on questions concerning the common property. The property management company also prepares an annual business plan and the condominium fee statement.
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The annual business plan lists all expenses and income expected for the homeowners’ association during the calendar year. Owners agree to the plan at the owners’ meeting, thereby committing to pay the monthly housing allowance (also called house payment). This is used to pay ongoing operating costs and possibly build up reserves.
Good to know: if you want to rent out your apartment, you can not count on the property manager. Because this involves special property. The management is not responsible for this.
What costs are borne by the community of owners?
The owners association carries all costs incurred for the common property. For example, expenses for renovation work on the facade are apportioned to all apartment owners. These participate proportionally depending on the size of their special property (see above).
In addition, all owners pay a monthly living or house money. It includes, among other things:
- Costs and fees for property management
- Costs and fees for the maintenance of the common property (janitor, gardener, cleaning)
- Reserves for maintenance of the property
- garbage and waste fees
- Heating costs for a joint heating system
If the reserves yield interest income, this can reduce the housing allowance. Do not include the property tax for your residential property. That comes for each owner still on top of it. Read here why the 2022 property tax will result in an additional tax return for you.
May homeowners’ associations take out a loan?
Yes, this is possible. However, the road to a loan is long for owner associations. Not only must the a majority vote at the owners’ meeting to approve the loan, All details must also be discussed: loan amount, interest, repayment conditions, term and default liability of all owners if individual owners do not pay.
But the biggest problem with the loan is the banks. the overwhelming majority of them close down when asked by homeowners’ associations because securities are missing. This is a deterrent and makes it difficult to find a bank.
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If it succeeds nevertheless, this often goes with higher interest rates and conditions one. For example, some banks require a resolution with a double qualified majority, although in purely legal terms a simple majority of the owners’ meeting is sufficient. the loan agreement is finally signed by the property manager.
The individual owners pay interest and repayment of the community loan via the condominium fees. It is often increased in order to recover costs.
What is the legal form of an owners’ association??
owners’ associations are community of owners. This legal form is a community of persons who are jointly entitled to a certain property. It is a special form of joint ownership. Another example of a community of joint owners is the community of heirs.