A circular resolution is a way for homeowners' associations (WEG) to make decisions without having to convene an owners' meeting. This process offers a practical and quick solution for passing resolutions. What are the key aspects of a circular resolution? What changes have been brought about by the reform of Section 23 (3) of the WEG? We have summarized the most important points for you.
Definition: What is a circular resolution?Link to this section
If a condominium association wants to make decisions quickly without having to wait long for the next owners' meeting, a circular resolution is a suitable option. Circular resolutions are therefore a quickly organized tool for condominium associations, providing a timely basis for decision-making outside of the regular owners' meeting.
The main areas of application include, for example, renovation work or complex decisions where not all owners can or want to be present in person.
Without a circulation procedure, one would either have to call an extraordinary meeting or postpone the decision until the next regular meeting.
While the reform of the German condominium association law (WEG) has made circular resolutions much easier, certain requirements and procedural steps must be carefully observed for such a circular resolution to be legally effective. This requires precise preparation and communication with all owners to ensure fair and transparent decision-making.
The most important facts about the circular resolution at a glance:
Urgency:When action must be taken quickly (for example in the event of water damage).Small decisions:For less complex issues, a circular resolution may be more efficient than an owners' meeting.Cost reasons:Circular resolutions can be more cost-effective than organizing an owners’ meeting.Application: A corresponding application for a circular resolution can be submitted by various members of the condominium association and sent to all owners.Initiators:Owners, the condominium administrator or the administrative board can initiate the circulation procedure.Community regulations:The Community rules may contain specific provisions for circular resolutions that go beyond the statutory requirements.Deadline:Votes shall be cast in writing within a period of at least three weeks.Voting in text formVotes can be submitted in text form. In addition to WhatsApp, other digital channels (e.g., email or special homeowners' association platforms) can be used.abstentions: No votes cast will be counted as rejection.Simple majority:If the Community rules stipulate that a simple majority of the votes cast is required to constitute a quorum, the resolution may be passed in this way.Announcement: The result will be announced in writing andChallenge to the circular resolution:The result is subject to possible appeal within four weeks.
Before making a circular resolution, check – is there authority to make a decision?Link to this section
Before a homeowners' association makes a decision, it must verify whether it is authorized to do so. This authorization is called decision-making authority.
To find out whether such decision-making authority exists, you can consult the community regulations or the declaration of division. These generally regulate the decisions the community of owners may make.
In principle, you can decide on everything that concerns the common property, for example the stairwell or the basement, at the owners' meeting.
What belongs to individual apartments—the so-called separate property—is excluded from decision-making authority and, as a rule, cannot be changed by the community simply by itself. However, there may be exceptions: If changes to separate property affect the common property, the community may, under certain circumstances, have a say. In this case, the condominium association does have decision-making authority.
One example of this is the water pipes in your building. Even if the pipes run through individual apartments, they are often common property. If these pipes need to be replaced, the condominium association can decide, even if that means drilling holes in individual apartments.
Who can initiate a circular resolution?Link to this section
The circulation procedure or resolution can be initiated by several people: Individual owners, the property management company, and the administrative advisory board can initiate a circular resolution. This can be the case, for example, for urgent decisions or routine matters where an owners' meeting is not necessary or time-consuming.
To initiate the circulation procedure, owners must be notified in text form (mail, email, WhatsApp, or other text-based apps). Before the new Condominium Ownership Act (WEG), only written form (letter mail) was permitted.
A homeowner abstains – what happens?
If a property owner abstains from voting by circular, their vote is automatically considered a "no." If unanimous approval is required, an owners' meeting must then be convened. However, if a circular vote requires a simple majority, the resolution can be passed without the abstaining member.
Request a circular resolution with the resolution proposalLink to this section
The motion for a resolution must clearly state what the circulation procedure is about and what is to be achieved.
If the circular procedure involves renovation work, for example, the resolution proposal should include quotes from various companies. This gives all owners the opportunity to get an idea of the costs and the various options.
It is important that the motion is worded in such a way that all questions can be answered. Since the opportunity for direct follow-up questions is limited with a circular resolution, all relevant information should be included in the motion.
The two forms for applying for the circular resolutionLink to this section
After the owners receive a cover letter with the resolution proposal, they must sign it and return it. There are two forms for this:
Circulating resolution: One motion for all
1. The property management company sends out a single resolution application, which is then circulated and signed by all owners. This process can be quite time-consuming. Furthermore, some owners may feel pressured to sign the application, lest they be the only ones not to sign.
Circular resolution: One motion for each
2. The property management sends separate resolution proposals to each owner. These are accepted or rejected individually and returned. This significantly speeds up the process, allowing owners to decide for or against the resolution proposal without peer pressure.
As soon as the property management has received all responses to the resolution proposal, the resolution will be announced and entered into the resolution collection.
Tip: Theoretically, the circulation procedure can also take place via WhatsApp. It is important, however, that the votes are submitted in text form. Voice messages or video messages from property owners are not valid.
Request a circular resolution: the deadlinesLink to this section
A resolution proposal must always include a deadline by which owners may vote.
According to Section 24, Paragraph 4, Sentence 2 of the German Condominium Act (WEG), a minimum period of three weeks is legally required for casting votes in the circulation procedure. This period is intended to give all owners a reasonable period of time to consider the proposed resolution and make their decision. This also ensures that owners who are temporarily absent can exercise their right to vote on the resolution.
How does the circular resolution work?Link to this section
The 2020 reform of the German condominium law (WEG) significantly simplified the process for resolutions by circular vote for condominiums (WEGs). Generally, the entire condominium association (WEG) must vote unanimously. Therefore, all owners registered in the land register must approve the resolution by circular vote. If they do not, the resolution cannot be passed.
According to the new WEG Act , which came into force on December 1, 2020, owners can vote for the circular resolution by a simple majority. Then, it is sufficient if more than half of all apartment owners vote in favor of the resolution. However, this requires that
For the circulation procedure with a simple majority, a resolution to reduce the approval requirement is required. According to Section 23 Paragraph 3 of the Condominium Act (WEG), the condominium owners must therefore resolve to reduce the approval requirement at a meeting. This resolution is only effective for a specific project and does not affect all future circulation resolutions. A long-term reduction of the required majority is not possible.
When does a circular resolution become valid?Link to this section
The resolution only becomes valid after the results are announced. The circular resolution is announced in writing, for example, by email or mail; alternatively, the results can also be posted in the stairwell or on the bulletin board. This should inform all property owners of the outcome.
Is it possible to revoke a vote cast by circular resolution?Link to this section
No, a vote cast in a circular resolution procedure cannot be revoked. If you or an owner regrets their decision, the only option left is to contest the entire resolution.
The circular resolution is contestable for four weeksLink to this section
If you wish to revise your decision in the circular resolution, you may file a challenge to the resolution, just as you would with the owners' meeting. According to Section 46 of the Condominium Act (WEG), your challenge must be filed within one month. The date of service to the condominium owner is the applicable date.
If a resolution is successfully challenged, it is null and void. The condominium association must then make the decision again.
Legal assistance from a lawyer well-versed in the German Condominium Act (WEG) is highly advisable here. Generally, you must file your challenge in the form of a statement of claim with the competent local court. The local court in whose district your property is located is always responsible.
The advantages and disadvantages of circulation proceduresLink to this section
A major advantage of the circular resolution in a condominium association is that decisions can be made more quickly and easily. Compared to an owners' meeting, the organizational effort involved in a circular resolution is significantly lower.
Condominium owners can cast their votes more easily in text form or online, without having to be in a specific location at a specific time. This also eliminates the costs of organizing a meeting. Finding a suitable date, travel for condominium owners, and all the other logistical challenges of an owners' meeting are eliminated with a circular resolution. The flexibility of the circular procedure allows for decisions to be made quickly, which is beneficial for everyone involved.
The disadvantage of a circular resolution is that, in complex cases, it offers less scope for discussion and personal exchange, which can sometimes lead to incorrect decisions.
FAQ: Frequently Asked QuestionsLink to this section
How does a circulation procedure work?First, the application is sent in writing to all property owners. The property owners have a specific deadline (at least three weeks) to cast their votes. Then, the votes are counted, and the results are announced in writing.What happens if I don't vote?If you don't vote, your vote will generally be counted as a rejection. It's therefore important to participate in the vote, even if you don't agree with the resolution.Can I reject a circular resolution even if I am not present?Yes, you can reject a circular resolution even if you are not present. Simply cast your vote within the specified deadline.Can a circular resolution also be used for important decisions?Yes, in principle, this is possible. However, particularly important decisions, such as major modernizations, should generally be discussed at an owners' meeting.Can a resolution be made verbally by circular?No, the resolution must generally be made in writing. This can be done either in text form or electronically, for example, via WhatsApp, email, or the condominium association platform.What happens if a member of the HOA cannot be reached?If a member of the condominium association cannot be reached, the resolution can still be passed. In this case, a simple majority of the remaining owners must approve it.Can I revoke a circular resolution?Once passed, a circular resolution cannot generally be revoked. Exceptions are possible if the resolution was unlawful. However, circular resolutions can be contested up to four weeks after the resolution is passed.What are the advantages of a circular resolution?Circular resolutions have many advantages. Decisions can be made more quickly than at an owners' meeting. Furthermore, the costs of organizing an owners' meeting are eliminated. Decisions can also be made outside of regular meeting times.What disadvantages can a circular resolution have?A circulation procedure lacks the opportunity for open discussion and the exchange of opinions. Written communication can also lead to misunderstandings.Who can help me with questions about the circular resolution?If you have any questions about the circular resolution, please contact your property management.
The circular resolution with Ralph – easier than everLink to this section
Overall, the circular resolution offers condominium owners a quick and straightforward way to make decisions. By simplifying the majority requirements, you can make decisions within the condominium association more quickly and initiate important tasks promptly.
Nevertheless, it is important that all legal requirements and documentation obligations are observed when implementing the circulation procedure to ensure the legal certainty of the resolutions. If you are dissatisfied with your condominium administrator, now is the time to to change property management . Ralph will be happy to help you!
