Each co-owner in a homeowners' association (WEG) holds an individual co-ownership share. A WEG isn't just a house with several apartments—it's a community in which several owners share the building, but not always equally. How is the co-ownership share calculated? How does the co-ownership share affect property taxes? And where is the co-ownership share recorded in the land register? This article provides answers to these and other important questions about the co-ownership share in homeowners' associations.
What is the co-ownership share?Link to this section
If you jointly own shares in a property belonging to a homeowners' association with other individuals, you are referred to as a co-owner. This co-ownership is subject to the civil law provisions set forth in Sections 1008–1011 of the German Civil Code (BGB).
The extent of your participation in the shared property is determined by your individual co-ownership share (MEA). This share simply determines the extent to which you participate in the common areas of the property.
The importance of co-ownership shares at a glance
The co-ownership share defines the extent of each member’s participation in the propertyThe co-ownership share influences the distribution of costs, rights and obligations within the communityThe higher the share of co-ownership, the higher the value of an apartmentThe co-ownership share may affect the voting rights in the Owners' meeting or at Circular resolutions determine: If the community deviates from the statutory head principle (Section 25 (1) WEG) or the value principle: The larger the co-ownership share, the higher the voting weightThe co-ownership share is a necessary prerequisite for the establishment of separate property.The calculationbased on the living and usable space.Depending on the size of the property, the co-ownership shares are usually divided into 1000ths, 100ths or 10ths of co-ownership shares.
Voting rights and co-ownership sharesLink to this section
Co-ownership shares (MEA) play a central role in determining voting rights at the owners' meeting. This system is based on the value principle, whereby the weighting of votes is based on the MEA.
The extent of voting rights depends on the size of the co-ownership share:
Larger MEA = More voting weightSmaller MEA = Less voting weight
This means that owners with higher shares can exert greater influence on decision-making processes within the condominium association.
Since the 2020 reform of the German condominium association (WEG), there has been a change regarding the quorum of the owners' meeting: At least 50% of the MEA must be represented at the owners' meeting. Otherwise, the meeting cannot take place. This regulation is intended to ensure representative participation in important decisions.
Definition of common propertyLink to this section
Common property is anything in the house that is not explicitly assigned to a single owner as private property. It includes areas used jointly by all owners. Typical examples of common property in a house include:
StairwellsShared washroomsElevatorsOutdoor facilities on the property
These common areas in the property are available for use by all co-owners and are jointly managed and maintained by the owners' association.
Special property: definitionLink to this section
The Condominium Act (WEG) allows for the creation of special ownership of certain areas of a property. According to Section 3, Paragraph 1, Sentence 1 of the WEG, special ownership refers to the exclusive ownership of:
a specific apartment (condominiums)certain rooms that are not used as living space or for residential purposes
These rooms must be located in a building already constructed or yet to be constructed on the property.
Read more in our article " Special ownership vs. special use right. What's the difference? "
Inseparability of separate property and co-ownership share
An important aspect of separate property is its indissoluble connection with the co-ownership share of the respective owners. This connection is so close that:
Special ownership is always established in connection with the co-ownership sharea separation of private and common property is not possiblethe sale of special property without the associated co-ownership share is excluded (Section 6 (1) WEG)
Calculate co-ownership share (with example)Link to this section
The German Condominium Act does not provide binding guidelines for calculating co-ownership shares. Nevertheless, a fair and transparent calculation is important, as it impacts various aspects:
on the obligation to bear costs (Section 16 (2) sentence 1 WEG)and the external liability of the owners (Section 9a, Paragraph 4, Sentence 1 WEG)
The formula for the MEA
The calculationis based on the living space and usable area. To calculate the co-ownership share of the property, use the following formula:
Co-ownership share MEA = (framework value ÷ number of square meters of the property's special property) x number of square meters of the owner's special property
The calculation method for the MEA
A common and fair method for calculating the co-ownership share (MEA) is based on the relationship to the separate property. Here are the steps:
Determination of the framework value:The total number of co-ownership shares (MEA) is determined in the declaration of division or the division agreement.Typical framework values:Average objects: 1,000 MEALarger objects: 10,000 MEACalculating the value of an MEA:Framework value ÷ total area of the special property = value of an MEA per square meterDetermination of the individual co-ownership share:Value of an MEA × number of square meters of the individual special property
Practical example
Let’s assume:
Framework value of the building: 1000 MEA (co-ownership shares)Total usable area of the building: 500 m²Area of the individual property: 70 m²
Calculation:
Value of an MEA: 1000 ÷ 500 = 2 MEA/m²Individual co-ownership share: 2 × 70 = 140 MEA
Result: The co-ownership share is 140/1000.
The co-ownership share as a basis for the distribution of additional costsLink to this section
The distribution of utility costs within a condominium association is generally based on co-ownership shares. This regulation is enshrined in the Condominium Act and serves as the starting point for cost allocation.
A homeowners' association incurs various communal costs. These include, for example, expenses for cleaning common areas, building insurance, and necessary maintenance. Section 16, Paragraph 2, Sentence 1 of the German Condominium Act (WEG) stipulates that these costs are distributed according to the co-ownership share in the property. This means: the larger the co-ownership share, the higher their share of the total costs.
In practice, this often results in owners of larger apartments or units bearing a higher share of the costs. This is based on the assumption that the co-ownership share is generally determined proportionally to the size of the separate property. Thus, the larger the property, the greater the obligation to bear the costs.
Important: Homeowners' associations may deviate from this principle. Section 16, Paragraph 2, Sentence 2 of the German Condominium Act (WEG) allows you to decide on an alternative distribution of costs. For example, you could agree to distribute the costs based on the number of residential units per owner, regardless of their size. This flexibility allows you to choose a distribution of costs that is perceived as fair and reasonable for all owners. Read more in our article: " Create utility bill : That's how it works".
Disadvantages of co-ownership shares in condominium associationsLink to this section
The rights and obligations surrounding co-ownership shares can also entail disadvantages in certain cases.
One disadvantage is the limited freedom of decision-making, as decisions are often made jointly, and individual wishes regarding renovations, maintenance, or management of the shared property may be restricted. Furthermore, differing opinions and interests among owners can lead to conflicts within the community, which can complicate decision-making regarding co-ownership and cooperation within the condominium association.
Owners are also obligated to bear their share of the common costs related to maintenance, repairs, and the management of the common property. Finally, owners are proportionally liable for the common debts of the homeowners association, which can lead to an increased financial burden for the remaining owners in the event of default by other co-owners.
Selling co-ownership shares: What do owners need to consider?Link to this section
In principle, each owner has the right to dispose of their property as they see fit. This also includes the option to sell their co-ownership shares. While co-ownership shares can generally be sold, selling individual shares is not possible.
As you already know, according to the German Condominium Act (Section 1 (2) WEG), co-ownership shares and separate property (such as an apartment) form an inseparable unit. Furthermore, according to Section 6 WEG, separate property is not independent, which precludes the separate sale of the co-ownership shares. Consequently, co-ownership shares and separate property can only be sold together, as is the case, for example, with the sale of an apartment.
ImportantAny sale of these shares is subject to notarial certification and registration in the land register.
Fractional ownership vs. co-ownership share
Especially when selling residential property, the term "co-ownership share" is not always used correctly. In some cases, it is mistakenly used as a synonym for "fractional ownership," for example, when an apartment belongs to a married couple.
However, if an apartment or house is jointly owned by several owners, there is only a single entry in the land register. In such cases, it is not separate property, but rather the owners form a joint ownership community.
If the private property or a house is inherited by several people, a joint tenancy is created. Only as a whole can decide on its use and management.
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Is it possible to change the co-ownership shares?Link to this section
Changing the co-ownership share is generally possible. To change the co-ownership share, two essential requirements must be met:
First, a legal transaction in rem is required pursuant to Sections 873 and 925 of the German Civil Code (BGB). This means that all owners whose shares are affected by the change must give their consent. This agreement is referred to as a "transfer of title."
In some cases, this can affect all owners of the community, for example, if an extension to the property changes the total area and thus shifts the co-ownership shares. In other cases, only individual owners may be affected, for example, if they exchange rooms and thereby want to balance a discrepancy between usable space and co-ownership share.
Second, the change in co-ownership shares must be registered in the land register. Only with this registration does the change in co-ownership shares become legally effective.
Co-ownership share and property taxLink to this section
The co-ownership share also plays a role in calculating property tax. Each co-owner is obligated to pay an amount proportional to their share. The amount of property tax is determined by the value of the land and the buildings on it.
The co-ownership share must be declared on the property tax return. The exact registration point for the co-ownership share depends on the property tax model applicable to the property in question. A distinction is made between the federal model and the various state models.
If in doubt, it is advisable to seek professional advice to ensure that the tax return is completed correctly and that only half of the co-ownership share in the property is taxed, which could have legal consequences.
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