Service charge, owners' association and property manager: what flat buyers should check
Anyone who buys a freehold flat becomes a member of an owners' association (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, staircase, utility risers 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 (Teilungserklärung) also sets out co-ownership shares, special rights of use (Sondernutzungsrechte) (e.g. a garden area, a parking space) and restrictions on use. It may provide that a sale requires the property manager's consent (§ 12 WEG).
Service charge and budget
Every owner pays a monthly service charge (Hausgeld). It is based on the budget (Wirtschaftsplan), which the owners resolve under § 28 WEG; after the end of the year, the property manager provides the annual statement and an asset report.
The service charge (Hausgeld) covers operating costs such as water, refuse collection, building insurance and cleaning, the property manager's fee, maintenance costs and contributions to the maintenance reserve (Erhaltungsrücklage). Each owner pays property tax (Grundsteuer) separately to the municipality.
When letting, only part can be passed on to the tenant: under § 1 (2) of the Operating Costs Ordinance (Betriebskostenverordnung), management costs and maintenance costs are not chargeable operating costs.
Maintenance reserve and special levies
Under § 19 (2) no. 4 WEG, building up an adequate maintenance reserve (Erhaltungsrücklage) is part of proper management. There is no statutory minimum amount. If the reserve is too low in relation to upcoming works, special levies (Sonderumlagen) are likely, which every owner must pay according to their share.
Important for the purchase contract: the proportionate reserve remains with the owners' 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 set out in the purchase contract.
Owners' meeting
The property manager must convene a meeting at least once a year (§ 24 WEG). Since the 2020 WEG reform, every duly 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 may inspect with the seller's consent. Even as an owner living abroad, you can be represented at the meeting; the proxy must be in text form.
Property manager
The property manager (Verwalter) implements the resolutions, manages the funds and prepares the budget and annual statement. Since 1 December 2023, every owner can demand that a certified property manager be appointed (§ 19 (2) no. 6 WEG). Letting your own flat is handled by separate rental management (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 (Wirtschaftsplan) and latest annual statement: amount of the service charge, share of costs that can be passed on, service-charge arrears of other owners.
Level 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 (Energieausweis) and details of the heating system.
Structural alterations
Since the 2020 WEG reform, 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 owners' association decides on how they are carried out.
Other structural alterations are decided by simple majority. The costs are in principle borne by the owners who voted in favour; however, all owners bear them if the resolution is 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 (§ 21 WEG). Therefore check the minutes for any expensive measures that have been resolved and whose costs will fall on 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 buyer is not liable for service charges that fell due before they acquired ownership. The due date is decisive; details should be set out 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 matches the foreseeable works on the building.
Can I attend meetings as an owner living abroad?
Yes – in person, by proxy in text form or – if the association has so resolved – online.
General information, as at October 2026. It does not replace advice from a tax adviser, solicitor or notary.
