The circular resolution - a quick alternative to the owners' meeting?

The circular resolution is a way for homeowners' associations (WEG) to make decisions without having to convene an owners' meeting. The procedure offers a practical and quick solution for passing resolutions. What is important for a circular resolution? What changes has the WEG reform § 23 para 3 WEG brought? We have summarized the most important points for you.  

Definition: What is a circular resolution?

If a condominium owners' association wants to make decisions quickly without having to wait a long time for the next owners' meeting, a circular resolution is a good option. The circular resolution is therefore a quickly organized instrument for condominium owners' associations that enables a prompt basis for decision-making outside the ordinary owners' meeting.

The main areas of application include, for example, renovation work or complex decisions where not all owners can or want to be present in person.

Without a circulation procedure, either an extraordinary meeting would have to be convened or the decision would have to be postponed until the next regular meeting.

Although the WEG reform has made it much easier to pass circular resolutions, certain requirements and procedural steps must be carefully observed in order for such a circular resolution to be legally effective. This requires precise preparation and communication with all owners in order to ensure fair and transparent decision-making.

The most important facts about the circular resolution at a glance:

• Urgency: If action needs to be taken quickly (for example in the event of water damage).
• Small decisions: For less complex issues, a circular resolution can be more efficient than an owners' meeting.
• Cost reasons: Circular resolutions can be cheaper than organizing an owners' meeting.
• Application: A corresponding application for a circular resolution can be submitted by various members of the WEG and sent to all owners.
• Initiator(s): Owners, condominium administrators or the management advisory board can initiate the circulation procedure.
• Community regulations: The community regulations may contain specific provisions for circular resolutions that go beyond the legal requirements.
• Deadline: Votes are cast in writing within a period of at least three weeks.
• Voting in text form: Votes can be submitted in text form. In addition to WhatsApp, other digital channels (e.g. email or special WEG platforms) can also be used.
• Abstentions: No votes cast will be counted as a rejection.
• Simple majority: If the community rules provide for a simple majority of the votes cast as a quorum, the resolution can be passed in this way.
• Announcement: The result will be announced in writing and
• Contestation of the circular resolution: The result is subject to a possible contestation within four weeks.

Check before the circular resolution - Is there a decision-making authority?

Before a homeowners' association adopts a resolution, it must check whether it is authorized to do so at all. This authorization is called the authority to pass resolutions.

To find out whether such decision-making powers exist, you can check the community rules or the declaration of division. These generally regulate which decisions the community of owners may make.

In principle, you can make decisions at the owners' meeting about anything that affects the common property, for example the stairwell or the cellar.

What belongs to the individual apartments - the so-called special property - is excluded from the decision-making authority and the community is generally not allowed to change it just like that. However, there may be exceptions: If changes to the separate property have an impact on the common property, the community may still be able to co-decide under certain circumstances. In this case, the WEG does have decision-making powers.

One example of this is the water pipes in your building. Even if the pipes run through the individual apartments, they often belong to the common property. If these pipes need to be replaced, the homeowners' association can decide on this, even if this means drilling in the individual apartments.

Who can initiate a circular resolution?

The circulation procedure or the circular resolution can be initiated by several people: Individual owners as well as the property management company and the management advisory board can initiate a circular resolution. This can be the case for urgent decisions or routine matters, for example, where an owners' meeting is not necessary or not possible in terms of time.

To initiate the circulation procedure, the owners must be notified in text form (post, email, WhatsApp or other text-based apps). Before the new Condominium Act, only the written form (letter post) was permitted.

One apartment owner abstains - what happens?

If a condominium owner abstains from a circular vote, his or her vote is automatically considered a 'no'. If unanimous consent is required, an owners' meeting must then be convened. However, in the case of a circular resolution with a simple majority, the resolution can be passed without the abstaining person.

Request circular resolution with the proposed resolution

The proposed resolution must clearly state what the circulation procedure is about and what you want to achieve.

If, for example, renovation work is involved in the circulation procedure, offers from various companies should also be included in the proposed resolution. This gives all owners the opportunity to get an idea of the costs and the various options.

It is important that the motion is formulated in such a way that all questions can be answered. As the opportunity for direct queries is limited in the case of a circular resolution, all relevant information should already be included in the motion.

‍

The two forms for requesting a circular resolution

After the owners have received a letter with the proposed resolution, they must sign and return it. There are the following two forms for this:

Circular resolution: One application for all

1. the property management company sends out a single resolution request, which is passed on to the owners and signed. This process can be quite time-consuming. In addition, some owners may feel under pressure to sign the application so that they are not the only ones who do not sign.

Circular resolution: One application for each

2. the property management sends separate resolution requests to each owner. These are accepted or rejected individually and sent back. This makes the process much faster and the owners can decide for or against the proposed resolution without group pressure.

As soon as the property management company has received all responses to the proposed resolution, the resolution is announced and entered in the resolution collection.

Tip: Theoretically, the circulation procedure can also take place via WhatsApp. The only important thing is that the votes are submitted in text form. Voice messages or video messages from the condominium owners are not valid.

Requesting a circular resolution: the deadlines

A proposed resolution must always include a deadline by which owners may vote.

Pursuant to Section 24 (4) sentence 2 WEG, a minimum period of three weeks is prescribed by law for the casting of votes in the circulation procedure. This period serves to give all owners a reasonable amount of time to consider the proposed resolution and make their decision. This also ensures that owners who are temporarily absent can also make use of their right to vote on the resolution.

How does the circular resolution work?  

The 2020 COA reform has significantly simplified the circular resolution for COAs. In principle, the vote must be taken by the entire WEG. This means that all owners entered in the land register must agree to the circular resolution. If this is not the case, the circular resolution will not be passed.

According to the new Condominium Act, which came into force on December 1, 2020, the owners can vote on the circular resolution with a simple majority. It is then sufficient if more than half of all condominium owners vote in favor of the proposed resolution. However, this requires the following in advance

A reduction resolution is required for the circulation procedure with a simple majority. In accordance with Section 23 (3) WEG, the condominium owners must therefore decide to reduce the approval at a meeting. This is only effective for a specific project and does not affect all future circular resolutions. It is not possible to reduce the required majority in the long term.

When does a circular resolution become valid?

The resolution only becomes valid once the results have been announced. The circular resolution is announced in writing, for example by e-mail or post, but alternatively the result can also be posted in the stairwell or on the notice board. In this way, all owners should be informed of the result.

Revoking a vote cast in a circular resolution - is that possible?

No, a vote cast in the circular resolution procedure cannot be revoked. If you or an owner regrets his or her decision, the only option is to contest the entire resolution.

The circular resolution can be contested for four weeks

If you wish to revise your decision in the circular resolution, you may initiate a resolution challenge, as you would at the owners' meeting. In accordance with Section 46 WEG, you must contest the resolution within one month. The date of delivery to the condominium owner applies.

If a resolution is successfully contested, it is null and void. The COA must then make the decision again.

Legal support from a lawyer who is well versed in the Condominium Act is highly advisable here. In principle, you must submit your challenge in the form of a statement of claim to the competent local court. The local court in whose district your property is located is always responsible.

The advantages and disadvantages of circulation procedures

A major advantage of the WEG circular resolution is that decisions can be made more quickly and easily. Compared to the owners' meeting, the organizational effort involved in a circular resolution is significantly lower.

Homeowners can cast their votes more easily in text form or online without having to be at a specific location at a specific time. This also eliminates the costs of organizing a meeting. Finding a suitable date, travel of the homeowners and all other logistical challenges of an owners' meeting are eliminated with the circular resolution. The flexibility of the circular procedure makes it possible to make decisions quickly, which is beneficial for everyone involved.

The disadvantage of circular resolutions is that they offer less scope for discussion and personal exchange in complex matters, which can sometimes lead to wrong decisions.

FAQ: Frequently asked questions

• How does a circulation procedure work? First, the application is sent in writing to all owners. The owners have a certain period of time (at least 3 weeks) to cast their votes. The votes are then counted and the result is announced in writing.
• What happens if I do not vote? If you do not vote, your vote will generally be counted as a rejection. It is therefore important to take part in the vote, even if you do not agree with the resolution.
• Can I reject a circular resolution even if I am not present? Yes, you can reject a circular resolution even if you are not present. Simply cast your vote within the set deadline.
• Can a circular resolution also be used for important decisions? Yes, in principle this is possible. However, particularly important decisions, such as a major modernization, should generally be discussed in an owners' meeting.
• Can a circular resolution also be passed verbally? No, the resolution must always be made in writing. This can be in text form or in electronic form, e.g. WhatsApp, email, WEG platform.
• What happens if a member of the WEG cannot be contacted? If a member of the WEG cannot be contacted, the resolution can still be passed. In this case, a simple majority of the other owners must agree.
• Can I revoke a circular resolution? Once a circular resolution has been passed, it cannot generally be revoked. Exceptions are possible if the resolution was unlawful. However, circular resolutions can be contested up to 4 weeks after the resolution was passed.
• What are the advantages of a circular resolution? The circular resolution has many advantages. Decisions can be made more quickly than in an owners' meeting. It also eliminates the costs of organizing an owners' meeting. Decisions can also be made outside the regular meeting dates.
• What disadvantages can a circular resolution have? With a circular resolution, there is no opportunity for open discussion and an exchange of opinions. Written communication can also lead to misunderstandings.
• Who can help me with questions about the circular resolution? If you have any questions about the circular resolution, you can contact your property management company.

The circular resolution with Ralph - easier than ever before

Overall, the circular resolution offers condominium owners a quick and uncomplicated way of passing resolutions. By simplifying the majority requirements, you can make decisions in the community of owners more quickly and initiate important tasks promptly.

Nevertheless, it is important that all legal requirements and documentation obligations are complied with when carrying out the circulation procedure in order to ensure the legal certainty of the resolutions. If you are dissatisfied with your condominium manager, now is the time to change your property manager. Ralph will be happy to help you!