New WEG law: Cost allocation – What is the cost allocation key?Link to this section
A cost allocation key is understood to be a fair distribution of the total costs of the shared property among the condominium owners. The statutory cost allocation key is regulated by the Condominium Ownership Act (WEG). This is discretionary, i.e., not mandatory, and can therefore be individually adjusted and modified by a resolution of the owners' meeting.
What has changed in the distribution of costs as a result of the WEG reform?Link to this section
Since the end of 2022, condominium owners have been able to decide by simple majority how the costs of their shared property are to be allocated. This applies to all cost items, from operating costs to major renovations.
Cost allocation key: How can the costs of the condominium be distributed fairly?Link to this section
The Condominium Act (WEG) stipulates a legally prescribed cost allocation key, which is regulated in Section 16, Paragraph 2 of the WEG. Specifically, it states that the community's costs are distributed according to the proportion of co-ownership shares. Alternatively, condominium owners can define their own cost allocation key. Their right to self-organization gives them considerable flexibility in this regard. Condominium owners can thus choose any allocation key that adequately considers the interests of all parties involved.
For example, it is possible to break down the costs according to the following factors:
Living spaceUsable area (only for part ownership)residential unitsconsumptionCausationNumber of people (only for small communities)Number of properties (only for multi-house complexes)
Which costs are distributed using the WEG’s cost allocation key?Link to this section
Each owner in the condominium association is subject to various burdens and costs that must be distributed fairly. The burdens are defined by the WEG Act as public-law payment obligations that affect the entire property. These costs include private-law payment obligations that arise as contractual partners in the condominium association.
The burdens and costs include, for example:
Maintenance and repair costs (e.g. on the facade)Modernization costs (e.g. new heating system)Costs for other types of structural changes (e.g. photovoltaics on the roof)Administrative costs (e.g. property management costs, bank fees, possible legal fees)Operating costs (e.g. waste disposal costs)
The various cost points are part of the House fee .
How is the cost distribution for income regulated?
If a homeowners' association generates income, for example, from renting parking spaces or interest income from the maintenance reserve, this income is first offset against the total costs of the homeowners' association. Only if a surplus remains after this offsetting are the individual owners entitled to a pro rata payout. Typically, however, this surplus is offset against any outstanding maintenance fee payments. The income is distributed according to the individual owners' co-ownership shares.
How is the cost distribution for special property regulated?
Your private property includes all areas of your property that are not common property, i.e., intended for shared use by all owners. This includes, for example, your walls, floors, doors, bathroom, and balcony. You are responsible for all costs associated with the maintenance, repair, or renovation of these areas. You are also responsible for paying for electricity, water, and heating if you purchase these services directly from a utility company.
What options are there for changing the cost allocation key in a condominiumLink to this section
In principle, the distribution of shared costs is based on the statutory key to co-ownership shares, in accordance with Section 16 (2) of the German Condominium Act (WEG). Although this legal basis for cost distribution follows the co-ownership shares, the Condominium Act provides scope for individual solutions.
Through appropriate provisions in the community regulations, the cost allocation key can be adapted to the specific needs of the condominium owners, for example, by allocating costs based on living space. The special provisions of Section 16 (3) and Section 21 (5) of the Condominium Act (WEG) apply to structural changes.
Are changes to the cost allocation possible retroactively?
No. For reasons of protection of trust, changes to the cost allocation key can only be approved for future periods. Retroactive changes are legally inadmissible and can be challenged by any condominium owner.
Can the apartment owners change the entire cost allocation key?
No, according to Section 16, Paragraph 2, Sentence 2 of the Condominium Act (WEG), this is not possible. The homeowners' association can only decide on any changes to individual costs or specific types of costs. A blanket change to the cost allocation is excluded.
Is it permissible to impose a new burden on homeowners who are exempt from certain costs?
No, such a change is not possible according to Section 16, Paragraph 2, Sentence 2 of the Condominium Act (WEG). If the community regulations stipulate that a condominium owner is exempt from certain costs, this regulation cannot simply be changed by a resolution of the condominium association.
Conclusion: The cost allocation according to Section 16 Para. 2 WEGLink to this section
Although the Condominium Act provides a basic key for cost distribution in homeowners' associations, this can be changed by a resolution of the owners' meeting.
A permanent change is possible for ongoing operating costs and administrative costs, while larger measures such as repairs or renovations must be decided on a case-by-case basis.
Interested in switching to Ralph? Switching your property management company has become easy and practically works on autopilot with Ralph. Feel free to leave us a message, and we'll get back to you to discuss the details.
