In two rulings dated March 22, 2024 – V ZR 81/23 and V ZR 87/23 – the Federal Court of Justice decided that an owners' meeting can, in principle, decide on the allocation of costs for maintenance measures on common property to individual apartment owners.
In the first case, the plaintiff is a member of the defendant community of apartment owners and co-owners of a structure that allows multiple vehicles to be parked one above the other. The owners' meeting had, by resolution (§ 23 WEG), imposed the costs for corresponding maintenance measures solely on the plaintiff apartment owners.
The plaintiff is challenging this decision with an action for annulment, which was unsuccessful in the lower courts. With the appeal on points of law, which was granted by the Regional Court, the plaintiff continues to seek to have the contested decision declared invalid.
Decision of the Federal Court of Justice in the first case
The Federal Court of Justice (BGH) rejected the appeal.
The resolution regarding the incurred costs is neither void nor contestable. Section 16, paragraph 2, sentence 2 of the German Condominium Act (WEG) establishes the authority of the condominium owners to decide on a distribution of individual costs or specific types of costs incurred by the condominium owners' association that deviates from the statutory distribution key. This also applies if it changes the group of those liable for costs, either by completely exempting condominium owners from bearing costs or by imposing costs on them for the first time. This broad interpretation arises from the wording of the law and is consistent with the legislative objective of the regulation.
When amending the cost allocation key, the condominium owners are granted considerable leeway due to the community's right to self-organization. Any amendment must be assessed based on whether it serves the interests of the community and the individual condominium owners, and in particular, whether it leads to an unjustified disadvantage for any individual. In any case, proper management requires that the adopted cost allocation take into account the use or potential use of the property. Ultimately, the prohibition against retroactive application of laws does not require a different assessment. From a typical perspective, the condominium owners cannot rely on the statutory opening clauses remaining permanently unchanged and the majority ratios not being broadened. On the contrary, changes to the legal framework must generally be expected.
In the second case, the plaintiff, as the owner of a top-floor apartment, is also a member of a condominium owners' association. At an owners' meeting, the condominium owners resolved to have the defective top-floor windows, which are part of the common property and located within the plaintiff's private property, replaced by a specialist company. Deviating from the previous arrangement, it was decided that the plaintiff should bear the costs of the window replacement alone.
The plaintiff also challenged the decided allocation of costs with an action for annulment and was unsuccessful in both lower courts.
Decision of the Federal Court of Justice in the second case
The Federal Court of Justice also rejected this appeal.
The resolution, for which the authority existed pursuant to Section 16 Paragraph 2 Sentence 2 of the German Condominium Act (WEG), complied with proper management. It took into account the plaintiff's right to use the skylights, which were located solely within the plaintiff's separate property. The fact that no provision was made for handling future similar cases does not preclude this. The point of contention was whether the so-called "continuity of scale" under the revised Condominium Act must be considered even in the first resolution concerning the costs of a single maintenance measure. This principle requires that the cost allocation for specific measures must also be reflected in future similar cases. The Federal Court of Justice (BGH) rejected this in the present judgment and clarified that a change in the cost allocation for a single maintenance measure pursuant to Section 16 Paragraph 2 Sentence 2 Alternative 1 of the WEG does not simultaneously require a corresponding provision for all future cases. This follows from the wording and legislative history of the provision. A different conclusion would not arise with regard to effective legal protection for homeowners. Consideration of the changed cost allocation of individual repair measures in subsequent resolutions cannot be hypothetically considered for future cases. Rather, consideration must be given to each individual case, specifically to a concrete measure or a concrete resolution already passed.
Practical tip:
Both rulings are based on the right of homeowners to self-organize, as stipulated in Section 16, Paragraph 2, Sentence 2 of the German Condominium Act (WEG). This right empowers owners to decide on the allocation of costs for maintenance measures. Crucially, the regulation must be in the best interests of both the community and the individual owners, and must not unfairly disadvantage any individual. Furthermore, it must take into account the respective owner's right to use their property.
These rulings represent a significant turning point in condominium ownership law. They clarify that condominium owners have a high degree of freedom of choice regarding cost allocation, as long as the decisions comply with the legal framework.
If you have any questions regarding this decision, please contact us. Lawyer and notary Simone Krziwanek and Mr. Attorney and Notary Oliver Merleker gladly available.