Condominium

Condominium - A condominium is a residential unit within a building for which separate ownership has been established under the Condominium Act (WEG). The owner has the sole right to use and dispose of their unit (separate ownership) and is simultaneously a co-owner of the common property of the building - such as the stairwell, roof, facade, and land.

Legal Basis: Individual Ownership and Common Property

The division of a building into condominiums requires a declaration of division, which is notarized and entered in the land registry. It defines which parts of the building constitute the individual ownership of the respective owners and which parts constitute common property to which all owners are entitled on a pro-rata basis.

Individual ownership includes the rooms of the apartment, including non-load-bearing interior walls, floor coverings, interior doors, and sanitary facilities. Common property includes load-bearing walls, the roof, the facade, windows (controversial, depending on the declaration of division), the stairwell, the elevator, the heating system, utility lines up to the branch into the apartment, and the lot.

In addition, the declaration of division may grant special rights of use-for example, for a parking space, basement storage unit, or garden area. These areas remain common property but may be used exclusively by the entitled owner.

The co-ownership shares (MEA) determine the proportion in which each owner contributes to the costs and expenses of the common property. They are specified in the declaration of division in thousandths and are generally based on the ratio of living space.

Costs and Condominium Fees

As the owner of a condominium, you pay a monthly condominium fee to the condominium owners’ association. The condominium fee consists of apportionable operating costs (heating, water, trash collection, insurance, building maintenance, etc.), contributions to the maintenance reserve, and administrative costs.

The maintenance reserve is used to finance major renovation projects on the common property-such as roof repairs, facade renovations, or heating system upgrades. If the reserve is insufficient, the owners’ meeting may approve a special assessment, which each owner must pay in proportion to their share of co-ownership.

When purchasing a condominium, in addition to the purchase price and incidental purchase costs, the ongoing monthly costs should also be calculated: maintenance fees, property tax (if applicable and not included in the maintenance fees), reserves for the individual unit, and the mortgage payment.

Condominium Overview - Costs and Considerations When Buying

Consideration	Significance	Risk if Neglected
Maintenance reserve	Financial cushion for renovations	Special assessments of €5,000-25,000 per unit
Condominium fees (non-recoverable)	Owner’s ongoing costs	Return on investment is overestimated
Declaration of Division	Allocation of common and exclusive property	Lack of rights to parking space, basement
Meeting Minutes	Planned construction projects, disputes	Unknown costs after purchase
Condition of Building (roof, facade)	Remaining useful life	Special assessments due in the short term
Vacancy rate in the condominium association	Payment defaults by the association	Failure to finance common expenses
Real estate transfer tax in Bavaria	3.5% of the purchase price	Ancillary purchase costs underestimated

Condominiums as an Investment

Condominiums are one of the most popular forms of investment in the Nuremberg metropolitan region. The gross rental yield ranges between 3.5% and 5.5%, depending on the neighborhood and year of construction. The following factors are crucial for sound yield planning: the achievable base rent relative to the purchase price, the amount of the building maintenance fee (the non-pass-through portion reduces the yield), the condition of the common property, and the size of the maintenance reserve. An insufficiently funded reserve fund in an older building in need of renovation can quickly wipe out the calculated return through special assessments. We recommend always factoring in a maintenance allowance of 1-2% of the purchase price per year when calculating the return.

Practical Tip for Nuremberg and the Metropolitan Region

When purchasing a condominium in the Nuremberg metropolitan region, we recommend carefully reviewing the declaration of division, the minutes of the last three owners’ meetings, the current budget plan, and the maintenance fee statements before making a purchase decision. These documents provide important insights into the condition of the common property, planned renovation measures, the relationship among the owners, and the quality of the property management.

Condominiums in older buildings are particularly in demand in popular Nuremberg neighborhoods such as the Old Town, St. Johannis, Maxfeld, or Gostenhof. Here, it is particularly important to examine the building’s structural condition and the maintenance reserve fund, as extensive renovation measures-such as roof repairs, facade insulation, and window replacement-can result in significant special assessments of €5,000-25,000 per unit.

Frequently Asked Questions

What should I check when buying a condominium?

In addition to the structural condition of the unit itself, you should review the common property, the declaration of division, the amount of the maintenance reserve, any outstanding or approved special assessments, the trend in maintenance fees over the past three years, and the resolutions of the owners’ meetings. Also, pay attention to restrictions on sale in the declaration of division (requiring the administrator’s consent) and to any legal disputes within the condominium association that are evident from the meeting minutes. An experienced real estate agent or attorney can evaluate these documents for you.

Can I renovate my condominium freely?

In your unit, you may generally make changes as long as you do not interfere with the common property and do not affect other owners. Removing a load-bearing wall, installing new windows, or making changes to the facade affect the common property and require a resolution by the owners’ meeting. Since the 2020 WEG reform, structural changes can be decided by a simple majority; for certain privileged measures (electric vehicle charging stations, accessibility, burglary protection, fiber optics), each owner even has an individual right to permission.

What happens if I don’t pay my maintenance fees?

Delinquent maintenance fees jeopardize the owners’ association’s liquidity and can lead to underfunding of renovation projects. The WEG administrator is obligated to first collect outstanding debts via a formal notice and subsequently through legal action. The association has a legal priority in foreclosure proceedings: Unpaid maintenance fees from the last two years take precedence over the bank’s mortgage in foreclosure proceedings-a powerful tool for enforcing payment obligations.

Back to the Real Estate Glossary.