Everything you need to know about WEG

What is a WG?

When you buy an apartment, you automatically become a part of the condominium owners' association, i.e. co-ownership share of the property. Together with the other owners, you have defined rights and obligations within this community. 

When you buy an apartment, this community owns certain parts of the property, which means that you also own part of it. This includes, for example, the roof, the facade, the staircase, the heating system etc. For this, each "WEG member" must assign the so-called "Hausgeld" or "Wohngeld" to cover these common costs.

In addition, the individual apartment owners cannot do certain things without the consent of the WEG. This can be small things like the color of the front door or the type of window frames. 

What does a WG consist of?

The WEG consists of three areas: the owners, the WEG manager and the management advisory board. These meet at least once a year for the owners' meeting ("ETV"), in which important resolutions concerning the common property are concluded. 

The regulations are determined by a vote in which the majority of the owners' votes decide. For example, they agree on a uniform color for the front door. But financial and construction-related matters are also discussed and agreed there. 

However, to ensure that not every condominium owners' association does what it wants and that the whole thing remains within a regulated framework, there is the Condominium Owners' Act (WEG Act). It specifies exactly what the duties of the administrator are and which topics must be dealt with by the owners' association. The WEG Act changed significantly in December 2020 (for more information, see the blog article on the new WEG Act). 

The management takes care of the WEG and makes sure that the decided points are also implemented, about the finances of the WEG (e.g. economic plan and annual account), communicates with suppliers and partners, and prepares a maintenance plan. 

The direct contact persons of the property management are the members of the management advisory board, which is elected by the WEG. This advisory board mediates between owners and the property management, and discusses maintenance measures and checks financial matters with the management. 

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Does every WEG need a property management?

There are two ways of implementing a condominium owners' association: external management or self-management. 

When is external management worthwhile?

In the case of external management of the WEG, the tasks are taken over by a third party, the property management company. This person or company is responsible for ensuring that owners' meetings are convened and that the WEG's finances are regulated. 

The external WEG management also takes care of the WEG's accounting. It has a power of attorney, which entitles it to commission service providers and pay them from the WEG's common funds.  

The task of the property management is also to ensure that financial reserves are created in order to be able to carry out maintenance measures or building renovations. These are mainly financed by the housing allowance that the individual owners have to pay each month. 

A competent external management is very worthwhile in most cases. It is particularly important if your WEG is of a certain size (usually around five units or more), if various maintenance work is due, and if not all owners live locally in the property or if not all co-owners know each other well. 

Which WEGs are suitable for self-management?

Since the amendment of the WEG Act 2020, the obligation that an external administration must be commissioned for a WEG has been removed. Since then, the owners could also independently take care of the concerns of the WEG. 

For this purpose, an owner is elected to represent the WEG as an internal administrator. It is important in this type of WEG administration that the administrator is thoroughly familiar with the WEG regulations and enjoys the full trust of the other owners. After all, it is this person who handles the finances of the WEG. This also means that the administrator must ensure that reserves for maintenance and renovation work are collected and that the annual accounts are correct. 

Self-management can save costs for a WEG, which is especially interesting for small WEGs. If you have an experienced accountant in the house and someone who knows the law well, self-administration can be worthwhile, especially with a manageable number of owners of less than five. However, it is particularly important that you know each other well and trust each other, because the internal manager assumes a great deal of responsibility for his or her co-owners.

Important: If you do not have the competence in the house or your WEG has more than five units, we strongly advise against self-management!

Ralph as a professional property management in Berlin

Since the tasks of a WEG management are often underestimated, it is recommended in most cases to use professional help from the outside. For as little as 25 euros a month, you can hand over the organization of various, complex activities to a professional property management company. Since a lot of money is at stake with your property, the monthly sum absolutely pays off in most cases.   

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How much is the "Wohngeld" and what are the costs for the WEG management?

Each owner must pay a monthly advance to cover utility and maintenance costs. These expenses are referred to as "Wohngeld" or "Hausgeld". It is paid to the property management of the WEG, which uses the funds accordingly to cover the running costs. 

This also includes the costs of WEG management such as property management or should an internal manager be compensated for the work and to generate reserves for maintenance and renovations. 

The amount of the housing allowance depends on the property, its management and the common facilities. To determine the exact amount, there is a legally regulated distribution key that is applied to the individual owners. Ralph usually saves owners money by reviewing current contracts and optimizing them if necessary. The management fee is also lower than the competition. With Ralph, the fee starts at €20.