Checklist: What you need to pay attention to in a WEG

Can I sell my condominium to anyone I want? In principle, yes — the freedom to sell is enshrined in the Basic Law. However: If the division declaration contains a restriction on sale under § 12 of the Condominium Act, you need the approval of the manager (or the community). This approval may only be denied for a valid reason — for example, if the buyer’s inability to pay can be proven.

The following overview summarizes the ten most important steps — from the initial intention to sell up to the handover:

Management approval under § 12 of the Condominium Act

The central special case when selling a condominium: If a restriction on disposal is recorded in the division declaration, the sale without the approval of the manager is voidable. The notary will only apply for the transfer of ownership at the land registry office once the approval is available.

When is approval required?

Only if the restriction is explicitly entered in the land register (section II). A look at the current land register extract — which you will need anyway for the sale — provides clarity. This clause is present in about 70–80 % of all German condominiums and is almost standard in Berlin and Munich.

When can the manager refuse?

Only for a significant reason — and this must be interpreted narrowly. Recognized reasons include:

• Proven financial inability of the buyer (e.g. ongoing insolvency)
• Planned improper use (commercial use in a purely residential building)
• Concrete danger to the residents’ association

On the other hand, insufficient are: sympathy questions, nationality, number of children, occupation. A groundless refusal can be legally reviewed by the seller.

Costs of the administrator’s approval

Common are 100–300 € — regulated in the administrator’s contract. Who bears them? Usually the seller, but can be transferred to the buyer in the purchase contract. More details: Administrator’s contract.

Service charges, reserve fund & special levies — the financial pitfalls

Here, most sales fail due to lack of detailed knowledge. The rule of thumb: whoever is the owner at the time the decision is made is liable for the payment — regardless of when the money is actually due.

The reserve fund goes with the apartment

A common misconception: the reserve fund is settled between buyer and seller. Wrong. The reserve fund is community property and automatically follows the apartment — the seller does not receive it. What you should do, however: disclose the share of the reserve fund in the listing, as it affects the purchase price.

Example: In an 80-m² apartment with a total reserve fund of 50,000 € and a 1/20 ownership share, 2,500 € fall to your apartment. A well-funded reserve justifies a price increase of 1,500–3,000 €.

Special levies — who pays?

If the owners’ meeting decides on a special levy (e.g., 8,000 € per apartment for a new heating system), the rule applies: the debtor is whoever is registered in the land register on the day of the decision. If the decision was made before the sale, the seller pays — even if the installment is only due after the transfer of ownership. Solution: Explicitly regulate this in the purchase contract.

Annual settlement — arrears & credit balance

When selling in the middle of the financial year, the question arises: Who receives the credit balance, who has to pay arrears? According to the Federal Court of Justice’s case law, the owner who is registered in the land register at the time the decision on the annual settlement is made is liable — which is usually the buyer. However, buyer and seller can agree on a different distribution in their internal relationship (common practice: pro rata temporis).

Example calculation of service charges

An 80-m² apartment in an average large city development:

• Total service charges: 350–500 €/Month
• Of which maintenance reserve: 80–120 €/Month
• Heating & hot water costs: 100–160 €/Month
• Management & insurance: 60–100 €/Month

If the sale takes place on the 15th of a month: the seller pays the housing costs up to the handover date — after that, the buyer takes over. Important: The cut-off date is not the notary appointment, but the economic transfer (usually after the purchase price is paid).

Mandatory documents: What the buyer wants to see

A well-prepared buyer (or their lawyer) today demands more than just the floor plan. The following documents should be requested from the property manager before the first viewing:

Tip from practice: Explicitly ask the property manager about open renovation issues — roof, facade, elevator, pipes. Hiding these topics risks a challenge due to fraudulent misrepresentation after the sale.

Tax trap: Speculation period

Who sells a rented condominium within ten years of purchase pays speculation tax on the sales profit — with the personal income tax rate (up to 45% + solidarity surcharge). For owner-occupied apartments, the tax is waived if the apartment was occupied in the year of sale and in the two previous years.

Investor example calculation: Purchase price 350,000 €, sale after 7 years for 480,000 €. Profit 130,000 € → at a 42% tax rate approximately 54,600 € speculation tax. Whoever waits one year longer (fulfilling the 10-year period) saves the entire amount.

Transfer of ownership & handover

The formal transfer of ownership takes place in three steps: notarial certification of the purchase contract, notation of the transfer in the land register, and registration of ownership after payment of the purchase price. The economic transfer (benefits, burdens, risk) must be distinguished from this — it typically occurs with payment of the purchase price and handover.

• Handover protocol for condominium — meter readings, keys, list of defects
• Owners’ association — rights and obligations

After the registration of ownership, you should inform the property manager with a copy of the notary confirmation — this person will register the new owner, adjust the service charges, and send future statements to the buyer.

FAQ: Sell a condominium in the WEG

Do I have to introduce the buyer to the owners’ association?

No, a formal introduction is not required. The property manager checks the approval under § 12 of the Condominium Act based on the buyer’s data — a personal interview does not take place in practice.

• No obligation to introduce oneself
• Property manager checks creditworthiness / usage intention
• Owners’ meeting has no right to vote

Can the property manager block the sale?

Only if there is a legally defined or specified important reason in the division declaration. Sympathy, nationality or profession of the buyer are not acceptable reasons for rejection. An arbitrary refusal can be overturned in court.

• Important reason required (e.g. inability to pay)
• Legal review possible
• Delay of 1–3 months

Who pays for the property manager’s approval?

Usually the seller. The costs are between 100–300 € and are regulated in the property manager’s contract. A different arrangement can be agreed in the purchase contract.

• Standard: seller pays
• Cost: 100–300 €
• Deviation possible in purchase contract

Do I get the reserve fund back when selling?

No. The reserve fund is community property and remains with the apartment. However, it is factored into the purchase price as value-adding — a well-funded reserve fund justifies a premium.

• No payout to the seller
• Transfers with the apartment to the buyer
• Value-adding in the purchase price

Who pays a special levy decided shortly before the sale?

The debtor is the owner on the day of the decision. If the decision was made before the transfer of ownership, the seller pays — even if the payment is due at a later date. Deviating regulations can be agreed upon in the purchase contract.</p>

Homeowners’ association at a glance

A condominium owners’ association (WEG) is a community of owners who own one or more apartments in a common building. So when you buy an apartment unit in a property, you automatically become a co-owner and a part of the community of owners. Explore Real Estate Germany.

The community of owners can be described like this:

Community of all owners of a property.

The community of owners is responsible for the management, maintenance and modernization of the common property. Decisions are made at the owners’ meeting, where each owner has one vote. An administrator is appointed to represent the interests of the owners and is responsible for the management and maintenance of the common property. The condominium owners’ association is a legal entity and can, for example, conclude contracts or appear in court.

Homeowners’ association at a glance:

• A WEG is the community of all owners of a property
• Each owner can represent his right to vote at the meeting of owners
• Each owner has a certain co-ownership share in the common property
• Each member of a WEG must bear costs for the common property
• Each owner is responsible for his or her own special property
• Each owner has to fulfill certain rights and obligations
• Each COA must have certain documents that set out rules and boundaries

Ownership shares and common property

The distribution of property in a condominium owners’ association is defined in the declaration of division. There, it is described in detail which parts of the building are assigned to separate property and which are considered common property.

Each owner has a co-ownership share in the common property of the building, such as the land, the facade, the staircase or the roof. The size of the share depends on the size of the respective apartment in relation to the total living space of the building.

For this purpose, each owner occupies special ownership of his or her apartment. This means that he has sole ownership of his apartment and can use and manage it freely.

This is the right of each owner:

• Co-owner of the common property
• Special ownership of own apartment

Rights and duties of the WEG

Each owner of a condominium association has certain rights and obligations arising from the Condominium Act and the declaration of division. In this section, we will look at these aspects in more detail and explain what rights and obligations an owner has.

The rights and obligations in a WEG include:

• Management
• Maintenance
• Owners’ meeting
• Resolutions

Management and maintenance

The owners are jointly responsible for the management and maintenance of the common property. This includes, for example, the maintenance of the garden, the cleaning of the staircase or the repair of the roof. The costs are apportioned to the owners in proportion to their ownership shares.

This duty has every owner:

• Responsible for common property
• Responsible for internal or external management

Participation in the owners’ meeting

The owners’ meeting is the central body of the condominium owners’ association and is used to make important decisions for the common property. It is therefore important that the owners attend the meeting and express their opinions. However, there is no obligation to attend.

Minutes of the owners’ meeting must be kept and signed by an owner and the administrator. The minutes must contain all resolutions passed and voting results.

Are you interested in the topic of owners’ meetings? Learn more here!

• Owners’ meeting

Voting procedure and resolution

In the owners’ meeting, decisions are made by voting. There are different voting procedures, e.g. simple majority, qualified majority or unanimous decision. A resolution is only valid if it has been properly passed and does not violate any laws or the declaration of division.

House Rules, Declaration of Partition & Co.

In order to regulate the ownership shares in a house with several parties and to guarantee a harmonious living together, a written order is needed. Therefore, every multi-party house has a declaration of division, community rules and house rules.

The house rules are the most important document and, from the legal point of view, the first place to regulate the operation in a multi-apartment building. They are drawn up by the homeowners’ association or the appointed manager and are an obligation for them.

The community rules regulate all regulations and laws for living together in the residential complex and are legally behind the house rules. Since the community rules can be determined by the owners themselves, changes may be decided unanimously at the owners’ meeting.

The declaration of division of a property exists whenever the overall property is split into individual parts, such as individual residential units. It therefore describes the formal division of the property and thereby defines the rights and obligations of the owners.

Order of the WEG at a glance:

• House rules: regulates operation in multi-apartment building
• Community rules: regulates all the rules and laws for living together in the residential complex.
• Declaration of division: thus describes the formal division of the property

More knowledge, Less Tax Burden

Basically, the more knowledge you acquire in terms of finances, taxes and individual tax situations, the better you can design your taxes. As I already mentioned in the article “Billion-dollar gift for Springer boss: Shares are tax-free?”, financial optimization is all about understanding and knowledge: Knowing that your tax advisor does not have and will never have. If he or she did, then he or she would be an investor himself.

Operationalization of the Tax Saving Elements

The second step is the operationalization, i.e. the practical application, specifically adapted to the particularities of your company. The industry does not matter, real estate investor, financial intermediary, lawyer or even tax advisor itself. If you know the legal methods and ways of tax optimization, you can instruct your tax consultant to do the right things. The tax consultant should then take care of the operational work. Everything strategic, methodical, you should master.

Tax model: Individual Methodology from Tax Tools

The ultimate goal is an optimal tax model that fits exactly to your individual constellation. Just like the US President. According to research of the New York Times he pays only $750 income tax. Many factors play a role here. In the area of real estate, companies, inventory and also private aspects such as family ties play a major role. As a young real estate investor it is still easy to add a second city to your portfolio, for example Hamburg and Berlin. As soon as the family is there, at the latest children, one’s own sphere of activity is naturally limited.

Factors for tax models, which your tax advisor will never be able to fully grasp with increasing complexity, are manifold. These would be just examples, which can also change depending on how your own portfolio is spread.

Tax model factors that influence the choice of methodology:

1. Company and industry(ies)
2. Real estate portfolio
3. Income from capital and investment portfolio
4. Strategic business planning
5. Private factors (partner, children, etc.)

Control Optimization: Process and Knowledge Build-Up

In this small, exaggerated infographics you can see how effective your knowledge, your tax burden will be gradually reduced.
Of course it is not as “extreme” as in this graphic in all areas. But in many it is possible. Just take a look at the example of the almost tax-free share donation.

Finance Basics: From Founder to Millionaire Entrepreneur

Here are my basic tips if you want to go from a solid foundation to a strong millionaire entrepreneur.

1. Submit tax return (mentioned for completeness)
2. Tax consultant (list with recommendations is also included)
3. Tax Coachings (only from professionals with best practice)
4. Experience of other CEOs, CFOs, senior executives, etc.

Tip 1: Submit your own Tax Return

The tip sounds simple, but is the absolute foundation. Not everyone who reads this guide is familiar with taxes, entrepreneurship and financing. Many are at the beginning of their career, perhaps even in the start-up phase. For you, too, I want to give you first, valuable tips on tax optimization.

In general, everyone who submits a tax return saves money. As a small motivation for your first tax saving, on average every citizen who submits a tax return gets a refund of 1,007 Euros.

I have done my tax declaration myself for many years, so I always knew about every item, about allowances, about duties and taxes. Today, this small-scale knowledge helps me to decipher complex processes in detail.

Or in short and simple terms: Nobody can fool you. Or only very, very, very few who have even more knowledge about legal tax models.

Tip 2 for Everyone: Tax Consultant

Work together with a tax consultant. This will allow you to take advantage of all the benefits that are regularly available or simple. This includes for example tax allowances.

A tax consultant is perfect to “seal the deal” with your accounting. But from experience you will never get proactive, really efficient tax tips. Tax consultants have many clients.
Nevertheless, you need a good tax consultant or a good tax office.

Tip 3 for Business Owners: Tax Coachings

So at some point you come to the point where you have to turn directly to experts. For this, there are either YouTube channels or books or tax coaching. Of course, I have tested all of them, but in the end, tax coaching is the most effective way.

The advantage of tax coaching as an online course: You combine different learning factors. You watch videos, perceive contents audiovisually, have checklists for in-depth application.

• Free courses are free of charge because they do not offer assets (content)
• Paid online courses offer know-how that not everyone should know
• PS: Please buy such courses only from tax experts with references
• Multimedia learning
• Contents repeatable

Tip 4 for Tax Savers: Experiences of Other CFOs, …

Experience of other CEOs, CFOs, senior executives, etc. with reputation and successful, lasting business At the latest after step 3 and your own, first years, you know immediately what that means.

In fact, I have also traveled a lot. Because especially from friends, i.e. “entrepreneur friends”, you learn the most. The big question is then always:

How do you do that?

No matter if it is about buying ETF packages in the savings plan (2.5% tax saved) or buying real estate without equity (yes, you only need to be able to hold equity if you do it skillfully).

You notice, I could tell you a lot about the tax return. Also to the tax consultant. But as soon as it comes to tax optimization, the matter becomes very dense. Knowledge cannot be put into a few words. Therefore, repeated briefly, take all tips to heart. If your assets grow, always remember to follow tip 3 & 4. The factor “tax” is getting bigger and bigger and the knowledge of how to deal with it, or rather how to structure it, transforms taxes into private assets.

Tax is like being an “entrepreneur”, a constant journey. The good thing is that every new destination is worth the adventure!

Reading Tips: Asset Building & Co.

Here I have some reading tips for you:

1. “Billion-dollar gift: shares largely tax-free”
2. Taxes & Assets: learning from investor experiences

“Billion-Euro Gift: Shares Largely Tax-Free”

“Billion dollar gift for Döpfner – largely tax-free?” – this headline is not from me, but from the morning mail. In fact, Matthias Döpfner has turned the publishing house upside down as boss. While owner Friede Springer stands confidently behind his decisions. Print shares were sold, new online media such as Business Insider, Idealo, Immowelt and StepStone were acquired. Already in 2012 Döpfner has received a big share package for more than 70 million Euro, now a “billion-dollar gift” for the Axel Springer boss is going to go, according to Manager Magazin. The 57-year-old media manager is increasing his previous stake in Axel Springer SE from just under three percent to a total of around 22 percent.

Tip! How does it work that you can get a block of shares almost tax-free? A little further down in the article I explain the methodology, or rather the law behind it.

• Give away shares: largely tax-free?

The President of the USA only Pays 750 Euro Income Tax: How does it work?

According to the New York Times, Donald Trump paid only 750 Euro income tax. It gets even better, according to the New York Times, Trump paid no income tax in 10 of 15 years starting in 2000. Are these questionable tax saving strategies or simply tax optimization? All the methods he uses are legitimate and legal. How does he do this?

• US President pays 750 Euro income tax

Owners’ association at a glance

They hold regular owners’ meetings to discuss common issues that affect all residents of the house, such as exterior design of the house and property, garden maintenance, fees and service charges, renovation or refurbishment of common property such as basements or the roof, a common property management or a caretaker service. However, an external property management company can also be requested for these tasks, for a fee.

• Syndicate
• Regular owners’ meetings to clarify common issues
• Can also be requested external property management

Climate change, modernisation and urban development

As we reported a few weeks ago, cities are in a state of flux. No matter if it is about the densification of living space, for example by putting new floors on top of supermarkets or even completely new city ordinances, like in Taipei. Green cities are the future, more housing on less land. To make it happen, there are more and more ideas, like this week presented in Focus Online, Environment Minister Svenja Schulze wants stricter regulations: One million households threatened with expensive conversion of chimneys and flues. Also in the manager magazine the will for change shows up, e.g. by skyscrapers from wood. The view of the green change does not only have positive aspects. If you look at your own wallet, you will agree with the Handelsblatt that this week debates the increase in costs due to the CO2 tax.

Also interesting: Berlin – Greening of roofs becomes mandatory.

Skyscraper made of wood – new construction from sustainable resources

Change is everywhere. Even animals and plants are changing their habitats. As you can read in the article Europe’s extraordinary gardens, tropical fruits now grow in Europe, where as grapefruits in London and magnolias with a view of the Alps.

CO2 tax – Do we really need it?

Professor Dr. Harald Lesch takes a deeper look at the debate about the CO2 tax. The video says: “Fridays for Future is calling for a CO2 tax of 180 euros per tonne of CO2. No problem, you might think, what normal person produces a ton of CO2? In fact, we do, directly and indirectly, almost monthly: 10 tons of CO2 per year per German citizen.” – Learn more interesting facts in the video:

Real Estate Shares: Price Week

The top 3 winners at the moment at a glance. Here you can find all real estate shares.

Immofinanz Real Estate Investments AG

Eyemaxx Real Estate

Course Provider:

CR Capital Real Estate

Course Provider:

Real Estate News:

Manager Magazin about Singapore’s most expensive penthouse

There are also new headlines this week from Manager Magazin such as “Researchers present concepts: “Skyscrapers made of wood are a natural answer to climate change”” as well as “Apartment for $54 million: Billionaire vacuum cleaner Dyson buys Singapore’s most expensive penthouse”. More headlines:

• Apartment for 54 million dollars: Billionaire vacuum cleaner Dyson buys Singapore’s most expensive penthouse

Focus Online answers questions on property tax reform

The Focus Online blog reports on “Environment minister wants stricter guidelines: One million households threatened with expensive conversion of chimneys and flues” and “Courts have ruled: Service charges – these are the ten most important rulings for tenants and landlords”. More news and current laws:

• The most important answers to the reform: Scholz plan for new property tax: Who now has to pay more rent
• Environment minister wants stricter regulations: One million households threatened with expensive conversion of chimneys and flues
• Courts have ruled: Service charges – these are the ten most important rulings for tenants and landlords

Did you already know? These are the most frequent searches in Germany for property tax:

• When is the property tax paid?
• Who pays the property tax?
• What is the property tax A and B?
• What is the difference between property tax and land transfer tax?

IM Immobilienmanager about Generali Real Estate

This week at IM Immobilienmanager among others articles about “Generali Real Estate appoints Lukas Jeckel as Head of Region Central Northern Europe” and “Terragon: Annette Heilig appointed to the Management Board” . You can find more news here:

• Austrian real estate fund buys Babelsberg Center
• Terragon: Annette Heilig appointed to the Management Board
• Generali Real Estate appoints Lukas Jeckel as Head of Region Central Northern Europe

Frankfurter Allgemeine on expropriation and rent freeze

This week’s Frankfurter Allgemeine has some exciting articles, such as “Proper raking and mowing: How to do gardening without back pain” and “Expropriation and rent freezes: The GDR is no role model! More news from the past days:

• Rake and mow properly: How to do gardening without back pain
• Workplace couple dynamics: sharing a desk with Schatzi
• Expropriation and rent freeze: The GDR is no role model!

Handelsblatt on the increase in costs due to the CO2 tax

In contrast, Handelsblatt reports this week on “Rising aspirations fuel housing shortage” and “Here’s how CO2 tax would make housing more expensive” . More headlines of the week:

• This is how the CO2 tax would make housing more expensive
• ECB experts warn of overheating in the European real estate market
• Rising aspirations fuel housing shortage

Star over Youtube Star (6) buying his first house

The blog of Stern deals with “Warning signs: How safe is your job? 12 signs of your imminent dismissal” and “Real estate: family plans with 84,000 euros Baukindergeld – and is now to go empty” . More news of the week:

• Real estates: Family plans with 84,000 euro building child money – and is to go out now empty-handedly
• Warning signs: How safe is your job? 12 signs you’re about to quit
• In South Korea: Six-year-old Youtube star buys house for more than seven million euros

Haufe: Rents rise significantly slower than purchase prices

New from Haufe this week includes “Frühlingsfrisch” and “Rechtzeitige Zahlung der Gerichtskosten bei Anfechtungsklage” . More real estate news for tenants, buyers and sellers:

• Housing market: Rents are rising much more slowly than purchase prices
• Timely payment of court costs in an action for annulment

T-Online asks: How big does the budget have to be to buy a house?

This week, T-Online has topics such as “Recovering construction defects – claiming warranty when building a house” and “Construction guide – How big does the budget need to be to buy a house?”. New topics of the week:

• Apportionable service charges – What you as a tenant have to pay and what not
• Building Guide – How big a budget do I need to buy a house?
• Complain about construction defects – warranty claim when building a house

Süddeutsche Zeitung on living as a single

This week’s Süddeutsche Zeitung blog is about “How the government wants to fight money laundering” and “Room, kitchen, murder”. Updates and news from the newspaper:

• How the government wants to combat money laundering
• Where the singles live
• Room, kitchen, murder

Federal Gazette knows: Germany must build more

This week at Bundesanzeiger among others “Discussion about rent regulation misses actual market development” but also “Germany needs to build more”. New articles, headlines and trends:

• Germany must build more
• Discussion about rent regulation misses the actual market development
• Housing urban development plan: Focus on new construction instead of regulation

Berlin.de about the wood market project of the capital city

New articles and posts from Berlin.de this week include “Bund der Steuerzahler criticizes apartment purchases” and “Saleh jumps on Müller: Correct urban development plan” . More headlines of the week:

• Taxpayers’ association criticizes apartment purchases
• New start for Berlin timber market project
• Saleh jumps on Mueller: Correct urban development plan

Immobilien Zeitung sees Stuttgart logistics market on the upswing

This week Immobilien Zeitung has interesting topics such as “Stuttgart logistics market on the up” and “Poor but sexy was yesterday” in the magazine. The posts and more tips can be found here:

• Stuttgart logistics market on the upswing
• Logistics revenue is “exceptionally strong
• Poor but sexy was yesterday

Spiegel on the fight against money laundering

At Spiegel this week it’s about “Rich: Zara founder prefers real estate as an investment” and “Fight against money laundering: government takes real estate agents more to task” . More news from this week:

• Fight against money laundering: government takes real estate agents more seriously
• Central bank: ECB experts warn of real estate bubble in Europe
• Rich: Zara founder prefers real estate as an investment