WEG self-administration: the advantages, disadvantages and costs at a glance

When it comes to managing condominiums, many owners are faced with the question: do they need an external condominium administrator or is there a viable alternative? The answer is yes, the so-called WEG self-administration. In this article, we take a comprehensive look at what is meant by self-administration, what advantages and disadvantages it entails, what costs can arise and for whom this model is actually suitable.

What does WEG self-administration mean?

WEG self-administration refers to the organization and implementation of WEG management by the owners themselves - without commissioning external administrators or a professional property management company. Nevertheless, all tasks in accordance with the German Condominium Act (WEG) must be fulfilled. In practice, this means that one or more people from the homeowners' association take on the typical management tasks that would otherwise be carried out by a professional property manager.

Requirements for the self-administration of a WEG

Not all communities of owners are suitable for self-administration. Certain requirements must be met for the management of a condominium community to function without professional property management:

• The WEG property should be of a manageable size, ideally between two and ten residential units.
• The apartment owners should have a good relationship with each other and communicate regularly and openly.
• At least one person from the community of owners must be prepared to take on responsibility as a WEG administrator.
• Basic knowledge of condominium law or the willingness to acquire it is necessary.
• A transparent organization and a common objective within the WEG.

Typical tasks in WEG self-administration

All legal obligations must also be fulfilled in self-administration. The administrator assumes the following administrative tasks.

• The preparation of the business plan for the coming year, including the calculated contributions of the individual apartment owners.
• The preparation of the annual statement of accounts in order to present the actual costs and income of the condominium in a transparent manner.
• Convening and chairing the owners' meeting, including taking minutes and issuing invitations in compliance with statutory deadlines.
• The implementation of the resolutions passed at the owners' meeting.
• The organization and monitoring of necessary maintenance measures and the conclusion of corresponding contracts with craftsmen and service providers.
• Ongoing communication with service providers, authorities and, if necessary, lawyers.
• The maintenance of all management data and the audit-proof filing of all condominium management documents.

The advantages of self-administration - opportunities for owners

Well-organized self-administration offers the homeowners' association numerous advantages:

• Significant cost savings compared to professional management: as there is no fee for an external manager, the annual charge for each apartment is reduced. The funds saved can be used for maintenance or reserves.
• Direct control by the owners: All measures, decisions and expenditure remain entirely in the hands of the community. This increases transparency and enables greater identification with the property.
• Flexible design of administrative processes: In self-administration, processes can be individually adapted - be it in decision-making, documentation or communication with third parties.
• Faster decisions: Voting is often more efficient without external management. The community decides directly at the owners' meeting without having to wait for feedback from a property management company.
• Strengthening the sense of community: Cooperation promotes togetherness and creates a greater sense of responsibility within the WEG.

The disadvantages and challenges of WEG self-administration

Despite the opportunities mentioned, self-administration also brings with it some challenges that should not be underestimated:

• High administrative workload for the manager: organizing accounts, meetings and maintenance is time-consuming. Without clear responsibilities, there is a risk of tasks being left undone.
• Liability risks in the event of management errors: If deadlines are missed, resolutions are not implemented correctly or legal requirements are ignored, this can lead to claims for damages - both against the manager and against the entire community of owners.
• Potential for conflict among owners: Without a neutral authority such as an external property management company, personal differences can make management more difficult and block decisions - for example in the event of conflicts with troublemakers in the community of owners
• Lack of specialist knowledge: Important knowledge of condominium law, data protection or construction law is often lacking or incomplete. This can lead to legally problematic situations.
• Excessive demands on individuals: Volunteer administrators quickly reach their limits, especially in large or technically complex properties.
• Lack of external contacts: Third parties such as banks, insurance companies or tradespeople often prefer professional administrators with the relevant expertise and availability.

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The costs of self-administration for your WEG

Although there are no monthly administration fees, self-administration also incurs costs, for example for:

• Specialized software solutions with which business plans, accounts and owners' meetings can be managed efficiently.
• Consultancy costs, for example from lawyers or tax consultants who help with tricky questions.
• Further training costs for the administrator in order to be able to work in a legally compliant manner.
• Expense allowances, if the community so decides, to recognize the work of the administrator.

Overall, however, the costs of genuine WEG self-administration are generally well below the fees of professional property management.

When does self-administration make sense for a homeowners' association?

Self-administration is particularly suitable for smaller homeowners' associations. The model is ideal if:

• The property has a manageable number of apartments.
• There are committed owners with time and interest for administrative tasks.
• There is trusting communication within the community.
• The cost of professional property management exceeds the available budget.

In larger or conflict-ridden communities, however, it is advisable to appoint an experienced external administrator.

Digital support for self-administration

Numerous platforms now offer specialized tools to support self-administration. These digital aids make everyday life much easier:

• Templates for business plans, annual accounts and minutes
• Digital voting and invitations to the owners' meeting
• Central document storage for contracts, resolutions and administrative data
• Reminders of deadlines, maintenance intervals and legal requirements
• Clear presentation of incoming payments, reserves and outstanding receivables

With the right platform, even less experienced owners can organize legally compliant and structured condominium management.

Legal basis for WEG self-administration

The 2020 WEG reform has strengthened the legal framework for self-administration. The current Condominium Act expressly allows owners to act as administrators of their homeowners' association themselves.

Important legal aspects:

• The internal administrators must be appointed by resolution of the owners.
• The tasks and duties remain the same as for external management.
• Contracts and agreements should always be documented in writing.
• In the event of breaches of duty, the COA or the responsible administrator is personally liable in cases of doubt.

The risks of self-administration

Anyone opting for genuine self-administration should be aware of the risks:

• Missing deadlines or formal errors can have legal and financial consequences.
• The lack of professional qualifications can lead to incorrect decisions or inadequate maintenance.
• Data breaches in the management of sensitive data are a real problem.
• A frequent change of responsible persons can jeopardize the continuity of the administration.
• The loss of trust in the COA can lead to tensions if tasks are not carried out correctly.

For whom is WEG self-administration suitable?

Genuine self-administration is suitable for owners who are prepared to invest time and energy in their property. The prerequisites are

• Strong cooperation in the community of owners
• Technical understanding or openness to familiarization
• The use of digital tools to optimize administrative tasks
• Clear agreements on responsibilities and substitution arrangements

In professionally managed large properties or in the case of highly frequented investment properties, experts usually recommend traditional condominium management by an experienced property management company.

Frequently asked questions about self-administration in the WEG

What distinguishes genuine self-administration from internal management by an owner?

Self-administration completely dispenses with an external administrator. The administrator is elected from among the owners, assumes all tasks and is jointly liable with the WEG.

Is the appointment of a WEG administrator required by law?

No. The homeowners' association can organize itself without an external administrator as long as the legal obligations are fulfilled.

What support is available for self-managing WEGs?

Many platforms and specialized services - including traditional property management companies - offer support services such as billing packages or advice.

What must be observed in the WEG meeting in the case of self-administration?

The invitation, agenda and passing of resolutions must be legally compliant. The election of the administrator should be a separate item on the agenda.

Do you already know Ralph?

Self-management or property management? As a modern property management company, Ralph offers you the perfect combination of experience, digital processes and personal service. If you choose us as your property manager, we will help you to master your management tasks efficiently, transparently and with legal certainty.

Still unsure? Request a free, no-obligation quote now and find out how Ralph can best support your condominium owners' association!

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