Co-ownership shares serve to clearly and bindingly regulate the rights and obligations within a condominium association, particularly voting and co-determination rights, as well as the distribution of costs for the shared property. However, they do have disadvantages. Learn more about them in our article.
Definition: What is co-ownership?Link to this section
Joint ownership describes a form of real estate ownership in which a property is not owned by a single person, but by several people jointly. Unlike sole ownership, where a property belongs to only one owner, joint ownership is shared by several people. Each co-owner holds a certain share of the property.
Co-ownership shares in the WEG
Co-ownership shares, often abbreviated as MEA, refer to the calculated share of an owner in the common property of a homeowners' association (WEG). Essentially, co-ownership shares determine which portion of the jointly used building is attributable to each owner.
The cost distribution
Without a clear breakdown of ownership shares, as set out in the declaration of division, a fair distribution of the costs for the administration and maintenance of the common property would not be possible.
The German Condominium Act (WEG) stipulates that these costs must be distributed according to the co-ownership shares (Section 16 (2) WEG).
Calculating co-ownership shares
Co-ownership shares are calculated based on the ratio of individual living space to the total area of the building. These shares are usually expressed as hundredths, thousandths, or ten-thousandths.
The formula for calculation is: MEA = (living area of each unit / total area of the building) * framework value.
The right to vote
This share is recorded in the land register and forms the basis for the owners' right to participate in joint decisions. The co-ownership share therefore directly influences voting rights within the condominium association. The larger the co-ownership share, the greater the voting rights in decisions concerning jointly owned property.
Since the 2020 reform of the German condominium association (WEG), at least half of the co-ownership shares must be represented in order to hold an owners' meeting.
The rights and obligations of co-ownership shares
The rights and responsibilities of co-owners are generally equivalent to those of a sole owner. However, decisions affecting the common property must generally be made jointly by all co-owners or at least by a majority vote. This means that important decisions, such as major repairs or renovations, require the consent of all or at least most co-owners.
Why are there co-ownership shares?Link to this section
Co-ownership shares serve to clearly and bindingly allocate rights and obligations within a homeowners' association, particularly in condominium associations. They regulate how voting and co-determination rights, as well as the costs of the common property, are distributed among the owners.
Through co-ownership shares, owners not only receive the right to their own apartment (private property) but also a corresponding share in the common property. This share determines the extent to which the owners participate in decisions and what costs they must bear.
The legal basis for co-ownership shares in Germany is the Condominium Act (WEG), in particular Section 16 (1) WEG. According to Section 6 WEG, the separate property is inextricably linked to the co-ownership shares. This means that separate property cannot be sold or mortgaged without the associated co-ownership shares.
When does co-ownership arise?Link to this section
Joint ownership can arise in various situations, for example when several people purchase real estate or through an inheritance in which several heirs become joint owners of an item.
When several people jointly purchase real estate, co-ownership automatically arises. The shares of each co-owner, known as the co-ownership share, are precisely defined.
This can also arise from the conversion of another form of ownership into joint ownership. Both sole ownership and joint ownership can be converted into joint ownership. This can happen, for example, if a sole owner sells shares of the property to other people. Conversion to joint ownership can also occur as part of an inheritance division if the heirs inherit the property jointly.
It is important to know exactly the rights and obligations associated with co-ownership in order to avoid conflicts and ensure smooth cooperation between the co-owners.
Joint ownership vs. joint ownership and other forms of ownershipLink to this section
The different forms of ownership can be distinguished mainly by the degree of ties between the owners and the type of control over the property.
Distinction from joint ownership
The key difference lies in the nature of the owners' ties. With joint ownership, there is no mandatory joint relationship, which allows the co-owners greater flexibility, especially when selling their shares.In contrast, joint ownership requires a legal or contractual commitment, as occurs, for example, with joint heirs or married couples. Here, the consent of all parties involved is required for the sale of a share.
Distinction from condominium ownership
Condominium ownership is a special form of co-ownership that is characterized by specific legal regulations.It is used to allocate condominiums in multi-family buildings to individual owners.There is also an owners' association, but the condominium owners can independently dispose of their spatially defined ownership shares.
Distinction from sole ownership
Sole ownership is the simplest form of ownership, where a property is owned exclusively by a single person.This person has sole control over his or her property.
These disadvantages and challenges have co-ownership sharesLink to this section
Co-ownership shares, particularly in the context of Homeowners associations , despite their advantages, can also bring some challenges:
Limited individual freedom of decisionSince many decisions must be made collectively, individual owners are limited in their freedom of action. This particularly applies to decisions regarding renovations, maintenance, and the management of shared property.Potential conflicts within the communityDiffering opinions and interests among owners can lead to conflicts that complicate decision-making and coexistence.Financial obligationsCo-owners are required to contribute to the common costs, which can mean unexpected financial burdens.Liability for joint debtsIn the event of late payment by individual owners, this can lead to an additional financial burden for the rest of the condominium association.Limited flexibility when selling or rentingSelling or renting a condominium with co-ownership shares can be complicated by the need for approval from the homeowners' association or by compliance with specific requirements. This can slow down and complicate the entire process.Dependence on other ownersThe condition and value of your property depend to a certain extent on the care and behavior of the other co-owners. Both inadequate maintenance and disputes with other owners can have a negative impact on the value of the property.
Switch to Ralph now
Would you like to change your property management? Switching to Ralph means your property is in competent hands. We place great importance on the accurate calculation and management of your co-ownership shares and ensure transparent and fair accounting for your property.
Simply let us know via message that you are interested in switching, and we will get back to you promptly to discuss all the details.
Request now non-binding offer on!
