Service charge, owners' association and administrator: what flat buyers should check

Anyone who buys a freehold flat becomes a member of a community of flat owners (Gemeinschaft der Wohnungseigentümer). Its financial situation and resolutions help determine the running costs – sometimes more than the condition of the flat itself.

Separate ownership, common property, declaration of division

The flat itself is separate ownership (Sondereigentum). The roof, façade, load-bearing walls, stairwell, supply lines and, as a rule, the windows belong to the common property (Gemeinschaftseigentum). Exactly what belongs to which is governed by the Condominium Act (Wohnungseigentumsgesetz, WEG), the declaration of division (Teilungserklärung) and the community regulations (Gemeinschaftsordnung).

The declaration of division also sets out co-ownership shares, special rights of use (Sondernutzungsrechte, e.g. part of the garden, parking space) and restrictions on use. It may stipulate that a sale requires the consent of the administrator (§ 12 WEG).

Service charge and budget plan

Every owner pays a monthly service charge (Hausgeld). It is based on the budget plan (Wirtschaftsplan), on which the owners pass a resolution under § 28 WEG; after the end of the year, the administrator prepares the annual statement (Jahresabrechnung) and an asset report (Vermögensbericht).

The service charge covers operating costs such as water, waste, building insurance and cleaning of the building, the administrator's fee, maintenance costs and the contribution to the maintenance reserve. Each owner pays the property tax (Grundsteuer) separately to the municipality.

When the flat is let, only part can be passed on to the tenant: under § 1(2) of the Operating Costs Ordinance (Betriebskostenverordnung), administration costs and maintenance costs are not recoverable operating costs.

Maintenance reserve and special levies

Under § 19(2) no. 4 WEG, building up an adequate maintenance reserve (Erhaltungsrücklage) is part of proper administration. There is no statutory minimum amount. If the reserve is too small in relation to upcoming work, special levies (Sonderumlagen) may be imposed, which each owner must pay according to their share.

Important for the purchase contract: the proportionate reserve remains with the association; it is not paid out to the seller. Who pays special levies that have already been resolved but only fall due after the change of ownership should be expressly regulated in the purchase contract.

Owners' meeting

The administrator must convene a meeting at least once a year (§ 24 WEG). Since the WEG reform of 2020, every properly convened meeting has a quorum regardless of the number of those present; the owners can also resolve to allow online participation.

Resolutions are recorded in a collection of resolutions (Beschluss-Sammlung), which prospective buyers can inspect with the seller's consent. Even as an owner living abroad, you can be represented at the meeting; the power of attorney must be in text form.

Administrator

The administrator (Verwalter) implements the resolutions, manages the funds and prepares the budget plan and the statement. Since 1 December 2023, every owner can demand that a certified administrator be appointed (§ 19(2) no. 6 WEG). Letting your own flat is handled by a separate rental management service (Sondereigentumsverwaltung), which costs extra.

Checklist before buying

Minutes of the owners' meetings for the last three years and the collection of resolutions: have renovations been resolved or postponed? Are there disputes or court proceedings?

Current budget plan and most recent annual statement: amount of the service charge, share of recoverable costs, service charge arrears of other owners.

Balance of the maintenance reserve in relation to the age and condition of the building (roof, façade, heating, pipes, lift).

Declaration of division with all amendments: special rights of use, restrictions on use, consent requirements.

Energy performance certificate and information on the heating system.

Structural alterations

Since the WEG reform of 2020, every owner can demand to be permitted certain structural alterations at their own expense: measures for people with disabilities, charging of electric vehicles, burglary protection and a fibre-optic connection (§ 20(2) WEG). The association decides on how they are carried out.

Other structural alterations are resolved by a simple majority. The costs are in principle borne by the owners who voted in favour; in the case of a resolution passed with more than two thirds of the votes cast and half of all co-ownership shares (provided the costs are not disproportionate), or if the costs pay for themselves within a reasonable period, they are borne by all owners (§ 21 WEG). You should therefore check in the minutes whether expensive measures have been resolved whose costs will fall to the buyer.

Sources

https://www.gesetze-im-internet.de/woeigg/
https://www.gesetze-im-internet.de/woeigg/__12.html
https://www.gesetze-im-internet.de/woeigg/__19.html
https://www.gesetze-im-internet.de/woeigg/__24.html
https://www.gesetze-im-internet.de/woeigg/__28.html
https://www.gesetze-im-internet.de/betrkv/__1.html
https://www.gesetze-im-internet.de/betrkv/__2.html
https://www.gesetze-im-internet.de/woeigg/__20.html
https://www.gesetze-im-internet.de/woeigg/__21.html

Frequently asked questions

Am I liable for the seller's service charge debts?

As a rule, the purchaser is not liable for service charges that fell due before they acquired ownership. The due date is decisive; details should be regulated in the purchase contract and checked by the notary.

How large should the maintenance reserve be?

There is no statutory requirement. What matters is whether the reserve is in line with the foreseeable work on the building.

Can I take part in meetings as an owner living abroad?

Yes, in person, by power of attorney in text form or – if the association has so resolved – online.

General information, as of October 2026. It does not replace advice from a tax adviser, a lawyer or a notary.