House money: The most important questions explained
What does the obligation of the owners according to § 16 para. 2 WEG mean?
Pursuant to Section 16 (2) WEG, the owners are obliged to bear the costs of the common property as well as the costs of maintenance and repair in proportion to their co-ownership shares. The proportion is to be determined on the basis of the co-ownership shares entered in the land register.
Are there any exceptions to the cost allocation requirement?
In really special exceptional cases, e.g. if there is no technical possibility to use the common property, the affected owner could claim an exception, exemption or modification of the proportional joint liability for himself according to § 10 para. 2 sentence 3 WEG old version. However, the lack of interest in use of an individual is irrelevant.
What are typical cost items of the house charges in a WEG?
Cost items are not listed in detail in the text of the law, but are regularly included among the burdens and costs:
- Insurance premiums
- Cost of community antenna system
- Water supply and disposal
- Heating and hot water
- Garbage collection
- House cleaning
- Electricity costs for the community facility
- Chimney cleaning
- Maintenance costs of the outdoor facility
- Costs for elevator system, janitorial services and for other common facilities.
- Maintenance and repair including maintenance reserve
The costs are to be borne according to co-ownership shares (MEA).
How is the house or housing allowance calculated?
The house or housing allowance is calculated from the cost items that must be borne by the community. Each owner must bear his share according to his co-ownership share.
When and how to pay housing allowance?
There is no specific provision in the law on the due date for housing benefit payments. Instead, the submitted individual business plan with the specified monthly advance payments lays the foundation for the housing allowance advance payments. The overall business plan contains the anticipated income and expenses of the entire property for the intended business year. The cost share of each condominium owner is specified in the individual business plan via the distribution key. The resolution wording must refer to the individual management plans and proper management requires appropriate rounding up on the expenditure side and calculation with sufficient certainty. The contribution to the maintenance reserve must also be shown. If the business plan is to continue to apply beyond the business year, this must be expressly resolved.
Can housing assistance payments be withheld?
A condominium owner has no right to withhold housing allowance payments, even if he believes that he can expect a credit balance at the end of the business year. It is strongly recommended to expressly resolve that the business plan shall continue to apply beyond the business year.
What regulatory power do the owners have?
The legislator has granted the owners the majority decision-making power on issues relating to maturity, consequences of default such as interest and other ancillary payments. This regulatory power relates in particular to default interest regulations, due date regulations, flat-rate contractual penalties and a flat rate for removal costs. From 2007, the controversial flat rate for non-participation in direct debit transactions was also regulated by law as a special administrative expense.
Maintenance reserve: everything you need to know
What is a maintenance reserve?
A maintenance reserve (formerly: maintenance reserve) is a monetary reserve formed by the community of owners to finance future maintenance and repair measures. It is not necessary to establish a reserve unless an owner requests it. However, if an owner requests it, a reserve must be established and the amount and purpose must be decided by a majority vote.
Earmarking of the reserve
The maintenance reserve is earmarked and may only be used for future maintenance and repair measures. General expenses and costs of the community may not be paid from the reserve. Only in exceptional cases, if a proper basic reserve and reserve amounts remain, recourse to bridge liquidity bottlenecks is possible.
Amount of the reserve
There is no legal requirement for the amount of the maintenance reserve. However, the reserve should be adequate and there are various formulas to calculate an adequate amount. For example, Peters' formula can be used to multiply the production cost per square meter by a factor of 1.5 and divide by 80 years of building life. Another method is to use the provisions of social housing, according to which 7 to 11 euros per square meter per year (depending on the age of the building) and 68 euros per year for garage parking spaces should be formed. In case of dispute, the courts decide individually according to the technical condition of the building, its age and equipment, and medium-term maintenance needs.
Additions to the maintenance reserve
Additions to the maintenance reserve are part of the monthly housing allowance advances. The annual statement must show both the actual payments and the payments due on the reserve. The former as revenue, the latter as a separate disclosure. As of Dec. 1, 2020, only the "docked" information is required in the property report. If an owner leaves, he cannot claim a paid-in share from the provision. For a commercial owner, the paid-in reserve amounts are not considered operating expenses in the tax sense until the reserve is consumed.
Special levy: The most important questions explained
What is a special levy?
A special levy is a one-time contribution that is decided by the owners by majority resolution. It is comparable to a supplementary business plan. Special assessments are regularly levied for unforeseen and sudden expenses, particularly in the area of maintenance. They are also permissible and necessary in the event of liquidity problems.
How is the special levy distributed?
As a rule, the allocation key should be based on the co-ownership share, unless there are objective reasons that require a deviation from this principle. The special levy becomes due as soon as the administrator requests it.
What is the liquidity reserve?
In order to avoid special levies, the 2020 reform explicitly allows the creation of separate liquidity reserves. This means that the community can set aside money for unforeseen expenses in order to be able to dispense with such special allocations in the future. The creation of the reserve must be decided by the owners' association.
The change to Ralph is uncomplicated.
Maintenance reserve: everything you need to know
What is a maintenance reserve?
A maintenance reserve (formerly: maintenance reserve) is a monetary reserve formed by the community of owners to finance future maintenance and repair measures. It is not necessary to establish a reserve unless an owner requests it. However, if an owner requests it, a reserve must be established and the amount and purpose must be decided by a majority vote.
Earmarking of the reserve
The maintenance reserve is earmarked and may only be used for future maintenance and repair measures. General expenses and costs of the community may not be paid from the reserve. Only in exceptional cases, if a proper basic reserve and reserve amounts remain, recourse to bridge liquidity bottlenecks is possible.
Amount of the reserve
There is no legal requirement for the amount of the maintenance reserve. However, the reserve should be adequate and there are various formulas to calculate an adequate amount. For example, Peters' formula can be used to multiply the production cost per square meter by a factor of 1.5 and divide by 80 years of building life. Another method is to use the provisions of social housing, according to which 7 to 11 euros per square meter per year (depending on the age of the building) and 68 euros per year for garage parking spaces should be formed. In case of dispute, the courts decide individually according to the technical condition of the building, its age and equipment, and medium-term maintenance needs.
Additions to the maintenance reserve
Additions to the maintenance reserve are part of the monthly housing allowance advances. The annual statement must show both the actual payments and the payments due on the reserve. The former as revenue, the latter as a separate disclosure. As of Dec. 1, 2020, only the "docked" information is required in the property report. If an owner leaves, he cannot claim a paid-in share from the provision. For a commercial owner, the paid-in reserve amounts are not considered operating expenses in the tax sense until the reserve is consumed.
Special levy: The most important questions explained
What is a special levy?
A special levy is a one-time contribution that is decided by the owners by majority resolution. It is comparable to a supplementary business plan. Special assessments are regularly levied for unforeseen and sudden expenses, particularly in the area of maintenance. They are also permissible and necessary in the event of liquidity problems.
How is the special levy distributed?
As a rule, the allocation key should be based on the co-ownership share, unless there are objective reasons that require a deviation from this principle. The special levy becomes due as soon as the administrator requests it.
What is the liquidity reserve?
In order to avoid special levies, the 2020 reform explicitly allows the creation of separate liquidity reserves. This means that the community can set aside money for unforeseen expenses in order to be able to dispense with such special allocations in the future. The creation of the reserve must be decided by the owners' association.
