What is a cost allocation key?

A cost allocation key is a fair distribution of the total costs of the common property among the apartment owners. The statutory cost allocation key is regulated in the WEG Act. This is dispositive, i.e. not obligatory, and can therefore be individually adapted and changed by a resolution in the owners' meeting. 

Cost distribution key: How can the costs of the WEG be distributed fairly?

The WEG Act specifies a statutory cost allocation key, which is regulated in Section 16 (2) WEG. Specifically, it states that the costs of the community are distributed according to the ratio of the co-ownership shares. Alternatively, the WEG can define its own cost allocation key. The right of self-organization gives it a great deal of leeway in this respect. 

For example, it is possible to break down the costs according to the following factors:

• Living space
• Usable area (only for partial ownership)
• Residential units
• Consumption
• Causation
• Number of persons (only for small communities)
• Number of objects (only in the case of a multi-housing complex)

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Which costs are distributed with the cost distribution key of the WEG?

Each owner in the condominium association incurs various burdens and costs that must be distributed fairly. The WEG law defines the burdens as public-law payment obligations that affect the entire property. Costs include payment obligations under private law that arise as contractual partners in the WEG. 

Encumbrances and costs include, for example:

• Maintenance and repair costs (e.g. on the facade)
• Modernization costs (e.g. new heating system)
• Costs for structural changes of other kinds (e.g. photovoltaics on the roof)
• Administrative costs (e.g. costs of property management, bank charges, possible lawyer's fees)
• Operating costs (e.g. garbage costs)

Cost distribution key: How can the costs of the WEG be distributed fairly?

The WEG Act specifies a statutory cost allocation key, which is regulated in Section 16 (2) WEG. Specifically, it states that the costs of the community are distributed according to the ratio of the co-ownership shares. Alternatively, the WEG can define its own cost allocation key. The right of self-organization gives it a great deal of leeway in this respect. 

For example, it is possible to break down the costs according to the following factors:

• Living space
• Usable area (only for partial ownership)
• Residential units
• Consumption
• Causation
• Number of persons (only for small communities)
• Number of objects (only in the case of a multi-housing complex)

‍

Which costs are distributed with the cost distribution key of the WEG?

Each owner in the condominium association incurs various burdens and costs that must be distributed fairly. The WEG law defines the burdens as public-law payment obligations that affect the entire property. Costs include payment obligations under private law that arise as contractual partners in the WEG. 

Encumbrances and costs include, for example:

• Maintenance and repair costs (e.g. on the facade)
• Modernization costs (e.g. new heating system)
• Costs for structural changes of other kinds (e.g. photovoltaics on the roof)
• Administrative costs (e.g. costs of property management, bank charges, possible lawyer's fees)
• Operating costs (e.g. garbage costs)