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Proxy authorization for owners' meetings: Why is it important?
The owners' meeting is the central decision-making body in the condominium owners' association (WEG). This is where important decisions are made that affect all owners and the common property. In order to ensure that absent owners can also exercise their interests and voting rights, the power of attorney for the owners' meeting serves as an instrument of representation. In principle, participation in the owners' meeting is not mandatory for the owners, but is recommended due to the important resolutions.
If a condominium owner is unable to attend, the power of attorney allows them to appoint another person to represent their interests. The person granting the power of attorney can specify whether the authorized person should receive specific instructions on voting or whether he/she has free decision-making authority.
Two types of owners' meetings
A basic distinction is made between ordinary owners' meetings and extraordinary owners' meetings:
- Ordinary owners' meeting: The ordinary owners' meeting takes place at least once a year and is convened by the administrator.
- Extraordinary owners' meeting: The extraordinary owners' meeting can be convened at any time if necessary to clarify urgent matters and ensure the condominium's ability to act.
The topics and points of the owners' meeting
The topics that are discussed and decided at an owners' meeting are diverse and range from administrative and financial matters to structural changes and the definition of rules for the use of the common property.
Administrative matters
- Appointment and dismissal of the WEG administrator
- The owners select a property management company to manage the common property.
- The administrator contract, which regulates tasks and remuneration, is also negotiated and agreed here.
- In the event of dissatisfaction or misconduct, they can also dismiss the management at the meeting.
- Administrative measures
- Resolutions on technical (e.g. repairs) and commercial (e.g. insurance) management tasks are passed at the owners' meeting.
- Contracts with service providers for cleaning, gardening or winter services are also discussed and concluded by the property management.
- Election of the advisory board
- The owners' meeting elects an advisory board from among its members to support and monitor the management.
Financial matters
- Annual statement of account (housekeeping account)
- The management presents a statement of income and expenditure for the previous year.
- The owners' meeting reviews and approves this statement.
- Business plan
- An economic plan is drawn up for the coming year, which contains the expected costs and income.
- The owners decide on this plan and thus determine the amount of the house rent.
- Special allocations
- In the event of unexpected or major expenses, such as renovations, special levies can be resolved.
- These serve to cover costs that are not included in the regular business plan.
- Financing of measures
- The owners' meeting decides on the financing of maintenance and modernization measures.
- This can be achieved through reserves, special allocations or loans.
Construction matters:
- Maintenance and repair measures
- Necessary repairs and maintenance work by the maintenance reserve on the common property are decided here.
- This ensures that the property retains its value.
- Modernization measures
- Modernization measures, such as energy-efficient renovations, are also discussed and resolved at the meeting.
- Structural changes
- Structural changes to the common property that go beyond maintenance require the approval of the owners' meeting.
Other matters:
- House rules
- Resolutions on changes or additions to the house rules.
- Usage regulations for the common property
- Definition of rules for the use of common property (e.g. garden, laundry room).
Who may attend the owners' meeting?
Participation in the owners' meeting is restricted to certain persons, as these meetings are not public. The owners themselves, the administrator and authorized representatives of the owners are primarily entitled to attend.
In special cases, receivers, insolvency administrators and guardians may also attend. The presence of external experts such as lawyers or architects may be permitted by a resolution of the meeting if this is necessary for individual agenda items.
The owners' voting rights are inseparably linked to their property and cannot be transferred separately to third parties. However, the owners' meeting may decide to allow other persons such as legal advisors or experts to attend. If an owner is represented by several authorized representatives, they must vote uniformly if they are present at the meeting. The power of attorney must be in writing and clearly prove the identity of the representative.
Who may attend the owners' meeting as part of a power of attorney?
As owners' meetings are not open to the public, the community rules usually stipulate that the representatives of condominium owners must belong to a certain group of people. This group usually includes
- Co-owners: These can be, for example, spouses who also own an apartment in the WEG.
- The administrator of the WEG: In some cases, the administrator him/herself can act as the authorized person.
- Members of the advisory board: Members of the advisory board can also be authorized to represent the company.
The exact provisions of the power of attorney for an owners' meeting may vary from condominium to condominium. For this reason, you should observe the individual regulations in the declaration of division and the community rules to ensure that the power of attorney for the owners' meeting is valid.
For representation at the owners' meeting, it is important to check the declaration of division and the community rules of the condominium carefully before granting a power of attorney. These documents often contain specific provisions on proxy voting and may provide for restrictions with regard to authorization.
Voting proxy for dismissal of the management
If the dismissal of the administrator due to misconduct is being discussed at a meeting, it is advisable to grant a voting proxy to a co-owner and not to the administrator concerned. In a ruling (case no. 29 S 180/15), the Cologne Regional Court clarified that an administrator may not vote on his/her own dismissal without specific instructions.
Representation of owners by a lawyer
The representation of owners by a lawyer at the owners' meeting can lead to problems, especially if the person is simultaneously acting against the interests of other homeowners in the owners' association.
In a ruling (case no. 771 C 64/15), the Schöneberg district court decided that in such a case, the affected condominium owner also has the right to be represented by a lawyer in order to compensate for the inequality created by the unilateral legal representation. Furthermore, such an 'imbalance of power' would contradict the principle of community consideration.
The owner should generally only authorize persons of trust, especially in the case of far-reaching powers that could have a significant impact on the homeowners' association
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What form is required for a power of attorney for the owners' meeting?
In principle, no specific form is required for a power of attorney under the German Civil Code (BGB). However, there is a special requirement for owners' meetings: according to the German Condominium Act (WEG), the power of attorney must be in text form.
Text form means that the power of attorney must be recorded in writing, but does not require a handwritten signature. In this way, the power of attorney can be easily proven to the administrator and possible problems of proof can be avoided. Alternatively, owners can also issue the power of attorney in writing, i.e. with a handwritten signature.
The difference between text form and written form is that written form requires a handwritten signature, whereas text form does not. This means that electronic means of transmission such as email are also permitted for text form.
Content: The power of attorney for the owners' meeting should contain this information
The power of attorney for an owners' meeting should contain the following key information:
- The full names of the owner and the authorized representative.
- The exact name and address of the homeowners' association (WEG).
- All relevant details about the WEG meeting, including place, date and time.
- Indication of whether the power of attorney is valid once or permanently.
Although a power of attorney does not require a signature in accordance with Section 25 (3) WEG, it can help to ensure clarity. To ensure that the interests of the owner(s) are represented precisely, it is advisable to attach detailed instructions on voting behavior to the power of attorney. As the agenda is announced in advance, the owner can use it to prepare.
Power of attorney for the owners' meeting: Your sample template
To ensure that all the necessary information is included in your power of attorney and that the power of attorney is legally effective, we recommend that you use a sample template. This makes the process easier for both the principal and the authorized person and minimizes the risk of formal errors.
{Download sample power of attorney now}
Who can represent an owner at the owners' meeting?
As owners' meetings are generally not public, the community rules often regulate who is permitted to act as a representative. The following persons are usually eligible:
- Co-owners
- Administrators
- Members of the Administrative Advisory Board
- Spouses
- Direct relatives
Typical scenarios for the election of a representative:
- You would like to represent your partner, but you are not married: check the provisions of your COA carefully.
- You are the owner of a GmbH and would like to send an employee: There may also be restrictions here.
- You would like to grant a power of attorney to a lawyer: In most cases this is not permitted.
- If the community rules do not provide for any restrictions, the owners are free to choose who they authorize. However, it is advisable to elect a person of trust, as important financial and organizational decisions are made at these WEG meetings.
Our recommendations:
- Read the declaration of division and community regulations carefully.
- Clarify any uncertainties with the condominium administrator in good time.
- Issue powers of attorney clearly and in writing.
When can a power of attorney be rejected?
Authorization for an owners' meeting may be refused in the following cases:
- If the authorized representative or owner does not present the power of attorney to the administrator or meeting management before the start of the meeting.
- If the power of attorney cannot be properly proven.
- If the authorized person is not entitled to represent according to the community regulations.
The administrator or meeting management must check and document the power of attorney. Permanent powers of attorney must be marked separately.
Proxy for virtual participation in the owners' meeting
The 2020 WEG reform has made it possible for owners' meetings to be held virtually. This offers the advantage that owners who are unable to attend in person can still participate. This eliminates the need for a proxy in many cases.
This type of meeting is referred to as a hybrid owners' meeting (Section 23 (1) WEG). However, purely online meetings are not permitted.
The WEG states that owners can decide that participation and the exercise of rights can take place partially or completely electronically. Even if all owners wish to participate digitally, the chairperson of the meeting must provide a room for those who wish to attend in person. In addition, the possibility of hybrid or digital participation must be included in the community rules by resolution.
When are owners excluded from their voting rights?
Under certain circumstances, the voting rights of owners may be suspended. This means that they may neither vote themselves nor transfer their voting rights, as they cannot transfer rights that they do not possess. Such situations typically occur when a legal transaction with the owners themselves is pending, when a resolution is passed in connection with a legal dispute against them or when they have been legally sentenced to the deprivation of their residential property.
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