New WEG law Voting rights: the rights and obligations for owners

As a condominium owner and member of a condominium owners' association (WEG), you have not only purchased a condominium, but also have a say in decisions that affect the common property. This right to have a say - your voting right - is an essential part of the German Condominium Act (WEG-Gesetz) and gives you the opportunity to actively participate in the organization and management of your condominium.

In this article, you will learn everything you need to know about voting rights in the homeowners' association: What rights and obligations do you have as an owner? How do you vote? What majorities are required for which decisions? And what has changed as a result of the 2020 WEG reform?

Principles of voting rights under the WEG Act

The right to vote is one of the fundamental rights that you have as a condominium owner. It allows you to vote on resolutions at the owners' meeting and thus influence decisions that affect the common property.

In principle, every condominium owner has the right to vote at the owners' meeting. The right to vote is linked to the property and not to the person. This means that

• If an apartment belongs to several people (e.g. spouses), they only have one vote together and must agree on a uniform voting behavior.
• If a person owns several residential units in the complex, they have a separate vote for each unit.
• Communities of heirs must also vote uniformly.

How are voting rights exercised?

Voting rights can be exercised in various ways:

1. Personal attendance: You attend the owners' meeting in person and vote there.
2. Representation: If you are unable to attend, you can authorize a representative to vote on your behalf. You will need a written power of attorney for this.
3. Online participation: Since the 2020 WEG reform, owners' meetings can also be held in hybrid or completely virtual form, provided this has been decided in the community rules.

The principles of voting rights: Head vs. value principle

There are two basic principles for the distribution of votes in the community of owners:

The head principle

With the head principle, each owner has exactly one vote, regardless of the size of the residential unit or the co-ownership share. This principle follows the democratic principle of "one person, one vote" and ensures that all owners have equal rights.

The value principle

Under the value principle, the voting weights are based on the co-ownership shares. This means that the larger the share of the common property, the more votes the owner has. The co-ownership shares are entered in the land register and are generally based on the living space.

Which principle applies when?

The Condominium Act generally provides for the head principle, unless otherwise stipulated in the declaration of division or community regulations. In practice, however, many community regulations have agreed the value principle.

It is also possible that different principles apply to certain decisions. For example, the value principle could apply to structural changes, while the head principle is used for everyday administrative decisions.

Quorum of the owners' meeting

In order for effective resolutions to be passed at an owners' meeting, the meeting must have a quorum. The requirements for this have been significantly simplified by the 2020 WEG reform.

According to the WEG reform, the owners' meeting always has a quorum, regardless of the number of owners or co-ownership shares present or represented. This new regulation is intended to prevent meetings from being unable to act due to a lack of attendance.

However, the community rules may contain deviating regulations regarding the quorum. For example, it is often stipulated that at least 50% of the co-ownership shares must be represented. Such regulations remain effective even after the WEG reform.

Majority requirements for voting

Not all decisions in a community of owners require the same majority. Depending on the scope of the decision, the WEG Act distinguishes between different majority requirements.

Simple majority

Most resolutions at the owners' meeting are passed by a simple majority. This means that more yes votes than no votes are required. Abstentions and invalid votes are not taken into account.

Examples of resolutions with a simple majority:

• Approval of the annual financial statements
• Resolution on the business plan
• Appointment of an administration
• Proper maintenance and repair

Qualified majority

A qualified majority is required for some more important decisions. This can be a two-thirds majority or a three-quarters majority, depending on the regulation.

Examples of resolutions with a qualified majority:

• Structural changes that go beyond proper maintenance
• Amendments to the Community Regulations
• Withdrawal of condominium ownership in the event of serious breaches of duty

All-vote (unanimity)

In certain cases, the consent of all owners is even required. This applies in particular to decisions that affect the fundamental rights of individual owners.

Examples of resolutions that require a unanimous vote:

• Change in the distribution key for costs and charges
• Changes to the declaration of partition affecting special rights of use
• Abolition of the Community

Structural changes and voting rights: simplified decision-making since 2020

One particularly important area that was newly regulated by the 2020 WEG reform is structural changes to the common property.

Before the reform, the consent of all affected owners was generally required for every structural change, which often made modernization more difficult. Since the reform:

• Structural changes can generally be decided by a simple majority.
• Every owner is entitled to certain privileged measures, such as the installation of charging facilities for electric vehicles, barrier-free access or burglary protection.
• The costs of structural alterations are generally only borne by those owners who have voted in favor of them.
• Only if the measure serves the purpose of modernization or the costs are amortized within a reasonable period of time can the costs be passed on to all owners.

Example: Decision on a photovoltaic system

If the community of owners wishes to install a photovoltaic system on the roof, a majority resolution has been sufficient since the 2020 WEG reform. However, the costs are only borne by those who voted for the measure - unless it is an energy-efficient modernization where the costs are amortized within a reasonable period of time. In this case, the costs can be passed on to all owners.

Contestation of resolutions and nullity

What can you do if you do not agree with a resolution or if it violates applicable law? A resolution that has been duly passed but is flawed in terms of content (e.g. violates the law or the community rules) can be challenged in court. Important to know:

• The appeal period is one month from the date of the resolution.
• Any condominium owner who was outvoted or was not present when the resolution was passed is entitled to challenge it.
• The lawsuit is directed against the other apartment owners.

A resolution can also be null and void if it suffers from serious defects. In this case, it is invalid from the outset without the need for a challenge. Resolutions are null and void, for example, if:

• the owners' meeting was not properly convened
• the decision violates mandatory law
• the subject of the resolution was not announced in the invitation

The nullity of a resolution can be asserted at any time; there is no time limit as there is for contesting a resolution.

The voting ban pursuant to Section 25 (5) WEG

In certain cases, owners may not vote in order to avoid conflicts of interest. § Section 25 (5) WEG regulates this voting ban. Voting is prohibited when decisions are made on the following matters:

1. A legal transaction or legal dispute with yourself
2. The initiation or settlement of a legal dispute against the administrator
3. The appointment or dismissal of the administrator if you are the administrator yourself
4. Discharge of the administrator if you are the administrator yourself

Example of a voting ban

If, for example, a vote is held on whether an owner should receive a special use permit for a part of the common property, this owner may not participate in the vote, as this is a legal transaction with him/herself.

Powers of attorney and representation rules for condominium owners

Not all apartment owners are always able to attend the owners' meeting in person. The Condominium Act therefore allows representation by an authorized representative.

The following requirements must be met for the representation to be legally effective:

• The power of attorney must be issued in writing (e-mail or fax is generally not sufficient).
• The name of the authorized representative(s) must be clearly identifiable.
• The power of attorney should refer specifically to the respective owners' meeting.
• The signature of the person granting the power of attorney is required.

The community regulations may provide for restrictions on representation, for example:

• Only certain persons may act as authorized representatives (e.g. only other owners or family members).
• One person may only represent a limited number of owners.

Such restrictions are permissible provided they are not disproportionate and do not fundamentally exclude the right of representation.

Voting rights at online meetings and digital votes

The 2020 WEG reform has driven digitalization in condominium owners' associations and created new possibilities for holding meetings and voting.

Virtual and hybrid owners' meetings

According to Section 23 (1) WEG, the condominium owners can decide that the owners' meeting can also be held virtually or in hybrid form (partly in person, partly online). A simple majority is sufficient for such a resolution.

Advantages of virtual meetings:

• Higher participation rate as no physical presence is required
• Time savings due to elimination of travel distances
• Flexibility for homeowners who live far away

Circular resolutions in text form

Another innovation of the WEG reform concerns the circular resolution. Before the reform, these could only be passed unanimously, which was often impossible in larger communities. This now applies:

• Circular resolutions can be passed in text form (e.g. by e-mail).
• A unanimous resolution is no longer required, but the respective majority that would also be required in a meeting is sufficient.
• The prerequisite is that the owners' meeting has passed a corresponding resolution that provides for the possibility of circular resolutions in text form.

Special cases and special voting rights regulations

There are various special cases in which special voting rights regulations may apply:

Voting rights in the event of insolvency or receivership

If insolvency proceedings are opened against the assets of an owner or if the residential unit is placed under forced administration, the voting rights are transferred to the insolvency administrator or forced administrator. The latter then exercises the rights at the owners' meeting.

Voting rights for communities of heirs

If a condominium owner dies, ownership is transferred to the heirs. If there are several heirs, they form a community of heirs who must exercise their voting rights jointly. The heirs must agree on uniform voting behavior and appoint a joint representative.

Voting rights for spouses and cohabiting partners

If a residential unit belongs to both spouses or partners, they only have one vote together. They must agree on a uniform voting behavior. If they cannot reach an agreement, their vote is invalid.

Practical tips for owners

As a condominium owner, you should use your voting rights consciously and responsibly. Here are some practical tips:

Preparation for the owners' meeting

• Thoroughly familiarize yourself with the agenda and prepare questions.
• If necessary, obtain additional information from the administrator.
• For complex issues: Talk to other owners in advance.
• Check the proposed resolutions for their impact on you personally and the condominium.

Active participation in the discussion

• Present your arguments objectively and constructively.
• Also listen to the arguments of other owners.
• Don't be afraid to ask questions about your understanding.
• If necessary, make your own proposals for resolutions.

Power of attorney in case of incapacity

• If you are unable to attend in person, please issue a power of attorney in good time.
• Instruct your proxy exactly how he/she should vote on your behalf.
• Choose someone you trust and who represents your interests.

Conclusion: Voting rights as a central element of self-administration

Voting rights are a central element of self-administration in condominium owners' associations. It enables you as an owner to actively influence the design and management of your residential complex. The 2020 WEG reform has simplified and modernized many processes, which strengthens the ability of WEGs to act.

Use your voting rights consciously and responsibly - in the interests of your personal interests, but also in the interests of a functioning homeowners' association. After all, a condominium owners' association can only be successfully managed through constructive cooperation and joint decision-making.

If you have any further questions about your individual voting rights and the special features of your community rules, we will be happy to advise you as your property manager. Please do not hesitate to contact us if you have any questions.

Do you already know Ralph?

Are you looking for a new condominium management company that will keep you reliably informed about all the latest changes to the Condominium Act and your voting rights as an owner? Switching to Ralph means for you: Your property is in expert hands and you always benefit from clear, transparent communication. We will keep you regularly informed about all changes to the Condominium Act and your co-determination rights. Contact us without obligation and receive a free quote now!