Conflict amongst apartment association members: Delineating Responsible Finances - Homeowners' association dilemma: determining responsibilities and expenses.
In the realm of housing disputes, the Federal Court of Justice (BGH) once again steps into the fray, questioning the fairness of cost distribution in apartment ownership communities (WEGs). Specifically, they're examining if a majority in a WEG can impose costs to the detriment of a minority. These squabbles over whose responsibility it is to foot the bill for communal repairs are as common as they are contentious. Today, we anticipate the BGH's verdict on an essential sub-question: Can a WEG shift costs to the disadvantage of individual owners?
Let's delve into the basics of WEGs before the ruling.
What is a WEG?
A WEG is essentially a union of all apartment owners connected to a given property, regulating communal issues for the building. The Apartment Ownership Act serves as a legal backbone, outlining the rights, duties, and responsibilities of individual owners and the community. Recently, in 2020, this law underwent reform from the Grand Coalition of Union and SPD.
What community-related costs should we expect?
Costs that affect common areas, such as roof, façade, staircase, or heating system maintenance, become the communal burden, asserts Luisa Peitz, a legal trainee at Haus & Grund Deutschland. Costs for personal apartment maintenance fall on the respective owners, encompassing tasks like interior painting, floor coverings, and private sanitary facilities. While the community can propose to alter this norm through a resolution, the legal regulation usually dictates the cost distribution.
What is "house money," and who is liable for it?
"House money" refers to the running costs of operation, maintenance, and administration for common property, according to Peitz. Amounts depend on the annual budget drawn up by the administrator. The actual costs are offset against advance payments, typically distributed according to co-ownership shares or by the partition declaration or a resolution of the owners' community.
What authority does the administrator possess?
Administrators are appointed and dismissed by the owners, with limited decision-making power for matters of subordinate importance. Any significant decisions or expenses requiring more substantial funds must undergo approval by the owners at the next meeting. Commonly, communities set a limit within which the administrator can act independently.
When is redistribution of costs appropriate within a WEG?
Under German law, community costs are usually distributed evenly based on co-ownership shares. However, apartment owners have the power to deviate from this norm through a resolution for specific costs or types of costs. It's the heart of today's debate just how extensively this resolution competence extends.
Ah, the case at hand – can costs be redistributed to individual owners?
This is exactly what the BGH intends to address. A property owner unhappy with being required to contribute to garage roof repair costs, despite not having access to the associated parking space, brings this contentious issue before the court. The community decided to allocate these costs pro rata to all apartment owners based on their ownership shares. The concerned owner's justification for appealing the decision demands attention.
What has the BGH ruled on in the past?
In March 2024, the BGH had already tackled such initial cost implication for individual owners in a WEG. They highlighted the community's latitude in decision-making. Even previously exempt owners may end up bearing costs due to amended resolutions, according to the BGH ruling.
What voting requirements are needed for decisions within the community?
Typically, for crucial decisions within the community, a simple majority is usually sufficient. However, minority protection is a pervasive aspect of the law. Owners arguing that a resolution is unjust can file a lawsuit if they believe it to be arbitrary, discriminatory, or malicious. The courts' role is to check if the resolution falls within the relatively wide discretion afforded to WEGs.
What options do apartment owners have when they want to challenge a resolution?
If an apartment owner feels a resolution is unlawful, they can file an appeal or nullity lawsuit with the competent local court within a month of the resolution passing. The lawsuit may contest the resolution for various reasons, such as violating the law, division declaration, or the principles of proper administration or unfairly affecting individual apartment owners.
What repercussions should apartment owners consider when taking legal action against the community?
Should an apartment owner successfully challenge the community in court and force the WEG to bear the legal costs, these expenses can be distributed among the victorious owner proportionally based on their ownership shares. However, as the BGH pointed out in July 2024, this could potentially discourage some owners from initiating legal action, particularly in smaller communities.
- In the ongoing case at the Federal Court of Justice (BGH), the SPD-supported housing reform in 2020 is being scrutinized, as the court considers whether a WEG can exempt certain apartment owners from paying communal repair costs.
- If the BGH rules in favor of the appealing owner, it could potentially lead to a shift in redistributing costs within WEGs, deviating from the usual even distribution based on co-ownership shares.
- In such cases where an apartment owner successfully challenges a community decision in court, the legal costs can be redistributed among the other owners in proportion to their ownership shares, according to a previous BGH ruling in July 2024.
