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Boost for modernization through legal reform
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What should change for millions of homeowners?
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New, near-finished residential buildings with condominiums (symbol image).
Photo: dpa / Lothar Ferstl
Sedan The question of what rights and obligations arise from joint ownership often presents challenges to homeowners or even sparks disputes. Therefore, the Condominium Law should be reformed. An overview of the changes.
The fundamental reform of the Condominium Law (WEG) establishes new rules, also for frequently deployed administrators, whose powers were sometimes highly contested.
WHY IS THE LAW REFORMED?
In its previous form, the WEG has been in force since 1951. At that time, it was intended to strengthen housing construction and thus enable broad sectors of the population to purchase a condominium. Climate protection, digitization or demographic change did not play a role at that time.
Over the years, the WEG has been modified several times, but it has never been fundamentally revised. Therefore, the reform is considered overdue. According to the Association Living in Property (WiE), the changes affect the owners of about 10 million apartments in Germany.
WHAT SHOULD BE DIFFERENT IN THE FUTURE?
A central point of the reform is that modernizations should be easier in the future, especially with a view to energy and age-appropriate renovations or the installation of charging stations for electric cars. The Federal Association for Energy and Water Management welcomes the fact that this removes a major obstacle to the advancement of electromobility. Furthermore, common property management should be “more efficient”.
WHAT DOES THAT MEAN FOR HOMEOWNERS?
In the future, the owners may initiate certain construction measures on their own, that is, without the consent of the co-owners, provided that they bear the costs themselves. This applies to both charging stations and anti-theft windows and doors, a stair lift or a fiber optic connection.
In other cases, the required majority will be reduced. The installation of a modern and climate-friendly heating system, for example, could then be decided by about half of the owners.
To protect homeowners from financial overload, all apartment owners only have to contribute to the costs of renovation measures if the structural change has been decided by two-thirds of the owners, and only if the change is not associated with “disproportionate costs”.
Otherwise, the owners who have approved the measure bear the costs. It is not yet foreseeable whether this could lead to individual owners voting tactically at meetings in the future to gain their advantage.
The WiE association notes that many of the effects of the complex set of rules can only be assessed in practice. The reform gives owners “more freedom to manage their common property, but also more responsibility.”
WHAT ABOUT THE ADMINISTRATORS?
The original version of the legal reform was strongly criticized mainly for the role of property managers, who can appoint property owners. For example, WiE feared that the powers of the administrators would be updated at the expense of the owners, and that they could possibly act over the owners of the apartments.
In the future, the administrators should be the representatives of the community of owners to the outside world and also be able to enter into contracts. Yet at the same time, their room for maneuver is limited, because owners can remove managers without good cause. The homeowners association Haus & Grund sees this as a “balanced law for both owners and managers.”
Additionally, landlords can now request that managers be certified by local chambers of industry and commerce. The German Association of Real Estate Managers (VDIV) welcomes the introduction of such a certificate of competence, which improves activity.
The Berlin Tenants Association warns that the amendment could create “considerable disadvantages for tenants” by changing operating costs in rented condos. The new regulation carries the risk that tenants will be unreasonably burdened with maintenance and administrative costs.
WHEN ARE THE CHANGES APPLIED?
After the Bundestag’s approval in the evening, the Bundesrat still has to deal with the reform. The changes should take effect this year, so that homeowners can benefit from the lower value added tax, which was a result of the Crown crisis, if they invest. According to information from the SPD parliamentary group, the entry into force originally scheduled for November has been postponed until December due to delays in the federal states ruled by black and green.
