Buying a FlatUnderstanding the Declaration of Division, WEG and Service Charges

Separate Ownership and Common Property

Separate ownership (Sondereigentum) is your flat: rooms, non-load-bearing interior walls, floor coverings, interior doors, sanitary fittings. Cellar rooms or parking spaces may be added.

Common property (Gemeinschaftseigentum) belongs to all owners jointly: the land, foundations, load-bearing walls, roof, façade, stairwell, heating system, pipes up to the branch into the flat – and, as a rule, the windows too.

Special rights of use (Sondernutzungsrechte) allow individual owners exclusive use of common property, such as a garden, a terrace or a parking space.

The Declaration of Division

The declaration of division (Teilungserklärung) with its division plan is the founding document of every homeowners' association. It sets out:

• which rooms belong to which flat,
• how large the co-ownership share is (usually in thousandths),
• who has which special rights of use,
• how costs are allocated (community rules, Gemeinschaftsordnung),
• whether letting, commercial use or structural changes are subject to restrictions.

Read the declaration of division in full before you buy – especially the community rules.

The Service Charge

The monthly service charge (Hausgeld) is levied on the basis of the budget plan. It includes:

• Operating costs: heating, water, waste, cleaning of the building, insurance, electricity for common areas (can be passed on to tenants),
• Management costs: property management, account fees (cannot be passed on),
• Maintenance reserve: a reserve for future maintenance (cannot be passed on).

In Oberfranken (Upper Franconia), the service charge for typical flats is often between €2.50 and €4.50/m² per month – depending on heating, lift and reserve.

The Maintenance Reserve

The maintenance reserve (Erhaltungsrücklage, formerly Instandhaltungsrücklage) finances the roof, façade, heating or windows. If it is too low, special levies of several thousand euros per flat may follow. As a rough guide, the values of the Second Calculation Ordinance (Zweite Berechnungsverordnung) apply: depending on age, around €9 to €14 per m² of living space per year. Older buildings with upcoming renovations need more.

The Owners' Meeting

At least once a year, the owners meet and adopt the budget plan, the annual statement and maintenance measures. Since the WEG reform of 2020, a simple majority is sufficient for most resolutions – including structural alterations – and meetings can partly take place online. For buyers, this means that more decisions can also be taken against the will of individual owners.

You Should Check These Documents Before Buying

1. Declaration of division with community rules and division plan
2. Minutes of the last three owners' meetings
3. Current budget plan and the latest annual statement
4. Amount of the maintenance reserve (total amount and share)
5. Collection of resolutions
6. Energy performance certificate (Energieausweis)
7. Property management contract

Worked Example: What Is in the Service Charge?

A 72 m² flat in a building with twelve units in Bamberg, built in 1992, central heating, no lift. Service charge: €270 per month. This is how it is made up:

For owner-occupiers, the entire service charge counts. For investors, the part that cannot be passed on is decisive: it reduces the yield. In the example, this amounts to €984 per year. How this feeds into the yield calculation is shown in Calculating rental yield.

Important: property tax (Grundsteuer) and your own insurance for the separate ownership are usually not included in the service charge – each owner pays the property tax directly to the municipality.

What Has Changed with the WEG Reform

The reform of the Condominium Act came into force on 1 December 2020. For buyers, these points are particularly important:

• Privileged measures: Every owner is entitled to be permitted, at their own expense, to install a charging point for electric cars, carry out an accessible conversion, add burglary protection or connect to fibre-optic broadband (§ 20 WEG). The community only decides on the "how".
• Simple majority: Structural alterations can be decided by a simple majority. In principle, only those who vote in favour bear the costs – but with larger majorities or measures that pay for themselves, everyone does.
• Stronger position of the property manager: The manager may carry out minor measures without a resolution. In return, since December 2023 owners can demand a certified property manager who has proven their expertise before the Chamber of Industry and Commerce (IHK).
• Online participation: Owners can resolve that participation in meetings is also possible online.
• Asset report: The manager must report annually on the status of the maintenance reserve and the community's assets. Ask for it – it is a good source for your due diligence.

Red Flags in Minutes and Statements

When reading the documents, you should look more closely at these points:

1. "Postponed" for roof, façade or heating: The community is putting off a necessary renovation. The costs will still come – perhaps shortly after your purchase.
2. High service charge arrears of individual owners: If money is missing, the others ultimately have to step in.
3. Ongoing court proceedings against resolutions or against the developer.
4. Frequent changes of property manager, or a manager who is evidently not fulfilling their duties.
5. A reserve that has hardly grown for years, even though the building is getting older.
6. Damp or mould issues that appear in several flats.

An open conversation with the property manager before the purchase is permitted and often revealing. Ask the seller for an appropriate power of attorney.

Flat or House?

For student and commuter flats in Bayreuth and Bamberg, or as a first investment, a flat is often the better choice. Anyone looking for space for a family and a garden usually ends up with a house – see Houses. For accessible solutions in old age, it is worth taking a look at Accessible living.

The Role of the Property Manager

The property manager (Verwalter) runs the affairs of the community: they prepare the budget plan and the annual statement, commission tradespeople, manage the reserve and organise the owners' meeting. A good property manager is crucial for maintaining the value of a residential complex. Check before buying:

• How long has the manager been in office, and when does their contract end?
• Are the statements punctual and comprehensible?
• Are they easy to reach, and do they respond to enquiries?
• Are they a certified property manager?

Many buyers have a short conversation with the property manager before buying. With a power of attorney from the seller, you can also inspect the collection of resolutions.

Letting: What Investors Need to Know

Anyone who lets a flat they own has two legal relationships: with the community (service charge, resolutions) and with the tenant (rent, service charges). This results in some special features:

Worked examples can be found under Calculating rental yield, tips on selecting tenants under Finding tenants.

Declaration of Division: What to Pay Particular Attention To

Declarations of division are often decades old and hard to read. Pay particular attention to:

1. Cost allocation: Are costs allocated according to co-ownership shares, living area or units? Are there special rules, for example for the lift?
2. Restrictions on use: Is commercial use, holiday letting or keeping pets restricted?
3. Special rights of use: Do the garden share, parking space or loft really belong to your flat?
4. Structural alterations: What may you change without the community's consent?
5. Discrepancies with reality: Does the division plan match the actual rooms?

It is best to have any points of uncertainty explained by the notary or the property manager before you buy.