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The WEG statement of accounts of a condominium owners' association, also known as the annual statement of accounts or house allowance statement, provides a comprehensive overview of the financial activities of the WEG. It is therefore a statement of income and expenditure for the past financial year. It may also contain additional information such as an economic report or a list of outstanding receivables in order to provide a more comprehensive picture of the financial situation.
You can find more information in our article on the topic of property management accounting.
The purpose of the WEG statement: a transparent overview of the common finances
The purpose of the WEG statement is to transparently present all financial transactions of a year and to ensure a fair distribution of costs among the individual owners. A business plan is drawn up at the beginning of the year, which serves as a guideline for the expected income and expenditure. At the end of the financial year, the actual WEG statement is submitted, which reflects the actual costs and income.
The purpose of the WEG settlement can be summarized as follows:
- Basis for future planning: The COA statement forms the basis for the preparation of the economic plan for the following year. By analyzing past expenditure, realistic budget forecasts can be drawn up.
- Detailed cost overview: The WEG statement provides a comprehensive presentation of all income and expenses of the WEG. A distinction is made between an overall annual statement, which provides an overview of the total costs, and an individual annual statement, which breaks down the individual costs of each owner.
- Transparency, control and adjustment of house payments: The individual annual statement enables a comparison to be made between the actual costs incurred and the advances paid (house allowance).
- Over-recovery: If the total costs were lower than the advances paid, a decision can be made on a downward adjustment of the house rent.
- Shortfall: If the income is too low, an additional claim is made against the owners to make up for the shortfall (section 28 (2) sentence 1 alt. 1 WEG).
In detail: This is included in the WEG settlement
The WEG statement shows which income was generated through house allowance payments or rental income and which expenses were incurred for maintenance, operation, administration and other items. Each cost item is allocated to the individual apartment owners according to a fixed allocation formula. For example, the costs for the common areas are divided proportionately according to co-ownership shares, while consumption costs such as heating or water are calculated according to individual consumption.
The dual billing structure and the division into total billing and individual billing promotes understanding and fairness within the community of owners.
The overall settlement
The annual statement of accounts is the main document of the annual statement of accounts. It provides a transparent financial overview for all owners and enables a well-founded assessment of the condominium's financial situation. It lists the following information in detail:
The revenue
- Records the financial inflows of the community of owners
- Includes the house payments of the individual owners
- Includes income from the rental of jointly owned property
- Includes interest income generated from the maintenance reserve
The expenses
- Lists all financial outflows of the condominium owners' association
- Includes costs for maintenance and necessary repairs
- Breaks down operating costs for communal areas (e.g. lighting, elevator maintenance)
- Includes administrative costs incurred
- Includes insurance premiums for the common property
The development of reserves
- Provides information on the changes in the maintenance reserve
- Detailed additions to the reserve
- Documents withdrawals from the reserve for specific purposes
The individual statement
The individual statement for each owner provides a detailed overview of:
Financial overview
- Advance payments made: A detailed list of all house payments made in the past year.
- Individual cost allocation: Transparent presentation of how the actual communal costs are allocated to the respective residential unit.
Financial compensation
- Settlement of differences: Determination of any additional payments or credits by comparing advance payments and actual costs.
Future planning
- Adjustment of future payments: Proposal to modify the advance payments for the upcoming billing year, based on the findings of the current annual statement.
The scope of the WEG settlement
The WEG statement not only contains a list of income and expenses, but also information on the basis of calculation, i.e. how the costs are allocated to the individual apartments. In addition, documents such as the business plan, minutes of owners' meetings or receipts can be attached.
Many of these documents are now also made available online to provide owners with easy access. The WEG statement is important for every owner, as it is also required for the tax return, among other things. Certain costs, such as for refurbishment measures, can be claimed for tax purposes.
Owners pay the housekeeping bill
You may now be wondering who has to pay the costs for the WEG settlement. The community of owners bears the total costs for the WEG statement. The costs for preparing and checking the WEG statement are apportionable as administrative costs in accordance with Section 28 (1) WEG. They are therefore allocated to the owners on a pro rata basis.
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These are the deadlines for preparing the WEG statement
Although there is no legally prescribed deadline for the annual statement of accounts, many management contracts or declarations of division stipulate specific deadlines. In the absence of such regulations, a reasonable deadline of three to six months after the end of the financial year is considered customary according to the case law of the Federal Court of Justice. For the year 2025, this means that your statement should be available by June 30, 2026 at the latest.
The person responsible for preparing the annual WEG statement is required by law
The preparation of the annual statement of accounts for a condominium owners' association is the legal responsibility of the administrator. He or she is obliged to prepare a detailed overview of the community's income and expenditure.
Further legal requirements relating to WEG accounting
The following legal requirements for the annual obligation, preparation, inspection and subsequent payment are important for you as a homeowner.
Annual obligation and special cases
The Condominium Act stipulates that the statement of charges must be prepared annually. This should be presented to the owners in good time as part of the invitation to the ordinary owners' meeting. If there are extraordinary expenses, an additional special statement is required. This must be submitted to the owners without delay.
Creation
Section 28 (2) sentence 2 of the German Condominium Act (Wohnungseigentumsgesetz, WEG-Gesetz ) stipulates that the administrator of a condominium is responsible for preparing the statement of accounts. This clear assignment of the duty makes sense, as the administrator is in the best position to draw up a correct and transparent statement of account due to his or her position in the WEG.
The responsibilities include not only the WEG statement, but also the preparation of the business plan. This provides an overview of the planned income and expenditure of the homeowners' association and thus forms the basis for the subsequent statement of charges. In addition, the administrator is responsible for the transactions of the condominium owners' association (Section 9b (1) sentence 1 WEG), which underlines his/her comprehensive role in the financial matters of the condominium.
Examination and resolution
Before the owners vote on the WEG statement of account, it should be checked by the management advisory board in accordance with section 29 (2) sentence 2 WEG. As a rule, this check includes a review of the supporting documents to ensure that the information in the statement is correct. However, a lack of or inadequate review by the management advisory board does not automatically invalidate the resolution on the statement.
The audited statement serves the owners as a basis for their decisions on financial adjustments, such as the determination of new house payments.
Back payments or refunds
The resolution on additional payments or refunds is based on Section 28 (2) sentence 1 WEG. If an additional payment is necessary, the homeowners' association is entitled to it. If too much has been paid, the individual owners can demand repayment (section 812 (1) sentence 2 alt. 1 BGB).
The COA itself does not decide on the COA statement, but only checks it. As already mentioned, the administrator is responsible for drawing up the accounts. However, the owners can of course use the statement to check whether the administrator has fulfilled his/her duties properly.
Checking and reviewing the annual WEG accounts
The annual statement of charges in the condominium owners' association is primarily checked by the management councils. They not only check whether all the figures are correct, but also whether the statement has been prepared completely and correctly. It should be noted that:
- All important information is included: This includes, for example, the total costs, the individual items and the calculation bases.
- The statement has been calculated correctly: The management advisory board checks whether the costs have been correctly allocated to the individual apartment owners.
- The settlement applies to your WEG: There must of course be no confusion with other properties.
Why is this so important? By carrying out this careful check, you can ensure that all condominium owners share fairly in the costs. However, if you discover any discrepancies, you can address them at the owners' meeting.
Incorrect annual WEG statement? How to protect yourself
To protect yourself from the consequences of an incorrect annual statement, you should have your statement checked thoroughly by the management advisory board and take a look at it yourself. Even if the management advisory board carries out the main check, you as the owner have the right to check the statement yourself. This allows you to form your own opinion of your costs and ask questions if necessary.
Proceed as follows:
- Preparation: Have all documents (current and past statements, receipts) ready.
- Checking receipts: Check individual receipts and invoices and check costs for plausibility.
- Formal check:Check the completeness and accuracy of the information, check calculations for correctness and check the appropriateness of cost allocation.
- Income and expenditure: Compare planned and actual values, analyze and question deviations.
- Maintenance reserve: Check additions and withdrawals, assess the appropriateness of the reserve.
- Resolution: Preparation for the owners' meeting and participation in the vote.
- Correction of errors: Document and address errors. If necessary, request correction of the statement.
- Follow-up: Obtain minutes and clarify open points.
Errors in the WEG settlement: consequences and options for action
What to do if the annual statement of accounts is incorrect? An incorrect annual statement of accounts is an annoying problem for condominium owners. It can lead to incorrect payments, discrepancies and, in the worst case, to financial disadvantages for the community of owners.
What rights do homeowners have in the event of errors?
According to the law, every condominium owner is entitled to a correct and complete annual statement of accounts. If this is incorrect, you as the owner can take various steps:
- Extrajudicial request: First of all, you should inform the condominium management company in writing of the errors in the statement and ask them to correct them. Set a reasonable deadline for this.
- Involvement of the management advisory board: Inform the management advisory board about the incorrect billing. They can try to persuade the administrator to make improvements.
- Consult a lawyer: If the administrator does not respond to your requests, you can consult a lawyer. They can assist you and support you in asserting your rights and, if necessary, take legal action against the administrator.
- Resolution at the owners' meeting: A resolution can be passed at the owners' meeting that obliges the management to prepare a correct statement of account.
House charges statement is not drawn up at all: What you can do
If the annual WEG statement is not prepared by the management in the first place, you should also take action to protect your rights and avoid financial disadvantages. Here are our tips:
- Written request: Set a deadline for the administration to prepare the annual statement.
- Threat of substitute performance: Inform the administration that you will have the annual statement drawn up elsewhere and will charge the costs to them.
- Documentation: Keep all written requests.
Why is it important to act quickly? A late annual statement of account can lead to landlords losing claims to back payments from their tenants. If problems persist, please consult a lawyer.
Ralph - your reliable partner for WEG accounting
Are you looking for an expert to prepare your WEG statement? Ralph is at your side with expertise, transparency and experience. We guarantee a correct and transparent annual statement so that you can concentrate on the essentials.
As your property management company, we also support you in conflict resolution and ensure harmonious cooperation in your community of owners. From drafting resolutions to communicating with difficult owners - we are there for you. Change property management now!
