Among your most important obligations as a condominium owner is the payment of the condominium fee. The proceeds of this fee are used to cover the costs accruing for the management, maintenance, and administration of the commonhold property you jointly own together with the other owners in the building. The legal basis for collecting the fee is the German Condominium Act (WEG). It provides that owners should bear these costs collectively and split them among themselves. As a rule, the condominium fee is paid to the estate manager.
The condominium fee receipts are earmarked, on the one hand, for the maintenance reserve that is set aside for major reinstatement work such as the replacement of the central heating system. On the other hand, it is used to cover smaller current maintenance measures as well as the costs for managing the house. The overhead, too, is covered by the condominium fee. If a condominium is not owner-occupied but let to a third party, the overhead can be recovered from that tenant. The remaining shares of the condominium fee are borne by you as the owner.
On top of the current assessments that owners advance toward the aforesaid expenditures, the condominium fee is collected in the form of so-called settlement fractions. These are additional payments collected whenever the costs incurred during the past financial year exceeded the the sum total of the assessments. Moreover, special assessments might become due for you as owner if unplanned expenses are subsequently added to the budget, e.g. the unforeseen costs of legal action. Finally, the condominium fee might be compounded by payments from a contractual obligation an owner may have vis-à-vis the home owner association (HOA), such as the rent for parking spaces that are part of the commonhold property.
The exact amount of the condominium fee is calculated on the basis of the business plan. The budget of a home owner association (HOA) is known as business plan. It is drafted for the next calendar year by the manager, and includes both the revenues and the expenditures for the housing estate. The business plan also includes an allocation key that breaks down the condominium fee to be paid up by each owner. These assessments represent advance payments. Most home owner associations have their owners pay their pro-rata condominium fee in monthly assessments. Occasionally, you will also find annual assessments. The condominium fee accounts are kept by the manager.
Whether Prior to an Acquisition...
Even ahead of an acquisition, the Accentro Real Estate Encyclopaedia offers interesting facts and decision guidance: We will coach you through the first steps on your path to homeownership. For instance, it provides information on the process flow of a condominium purchase. It will also tell you what sort of documents you need in order to buy property, and where to obtain them.
... or after – Our Real Estate Encyclopaedia Provides the Answers You Need
Once you have bought a property, you may wonder who is going to manage your condo and how. After all, caretaking your property is one of your main obligations as a condominium owner. In addition to numerous tips and suggestions, you will find answers here to many questions involving the property management subject, such as: What does “individual freehold ownership” mean? What exactly do “condominium regulations” govern? And what does the term “condominium fee” imply? In addition, we elaborate subtle differences between terms such as “real estate management” and “corporate real estate management.”
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