Condominium fees

Condominium Fees - Condominium fees are the monthly advance payments that each condominium owner in a condominium association (WEG) makes to the property management company. They cover the ongoing operating costs of the common property, contributions to the maintenance reserve, and administrative costs, and are therefore typically 20 to 30 percent higher than the utility costs that can be passed on to tenants.

What exactly does “house maintenance fee” mean?

The house maintenance fee is enshrined in the Condominium Act (WEG) and serves as the central financial basis for the ongoing operation of a condominium association. The amount is determined annually in the so-called budget plan, which is prepared by the property management company and approved by the owners’ meeting with a simple majority. The budget plan contains the estimated income and expenses of the WEG for the coming calendar year and forms the basis for calculating the monthly advance payments for each individual owner.

The allocation of maintenance fees among the individual owners is generally based on the co-ownership shares (MEA) specified in the declaration of division. Alternative allocation formulas-such as those based on living area or number of occupants-may be established by agreement or resolution of the homeowners’ association.

Every condominium owner is legally obligated to pay maintenance fees on time and in full. In the event of late payment, the condominium management may initiate collection proceedings, charge late fees, and, in extreme cases, even pursue the foreclosure of the unit. Since the 2020 condominium reform, the association has also been able to encourage delinquent owners to pay more quickly and effectively, as the decision-making authority of the owners’ meeting has been strengthened.

For investors who rent out their condominium, an important distinction must be noted: Not all components of the maintenance fees are passable on to the tenant. While pure operating costs can be passed on as part of the utility bill, the maintenance reserve and administrative costs must be borne by the owner themselves. This difference typically amounts to 20 to 30 percent of the total maintenance fees.

Composition of the Condominium Fees

The condominium fees consist of three main components:

Passable-on operating costs make up the largest share and include all ongoing costs in accordance with the Operating Costs Ordinance-including heating, water, waste disposal, building insurance, building cleaning, landscaping, and elevator maintenance. Landlords can pass these costs on to their tenants.

Maintenance reserve is the earmarked fund for future repairs and renovations to the common property-such as roof repairs, exterior painting, or replacement of the heating system. The appropriate amount is based on the age and condition of the building; the Peters formula recommends approximately 7.10 to 9.00 euros per square meter of living space annually as a guideline.

Management costs include the property management company’s fee for the commercial and technical management of the condominium complex, including bookkeeping, owners’ meetings, and correspondence.

Practical Tip for Owners in Nuremberg and Franconia

When purchasing a condominium in the Nuremberg metropolitan region, maintenance fees should be carefully analyzed, as they significantly impact the overall return on investment. In older existing buildings-such as those in Gostenhof, St. Leonhard, or the Südstadt-maintenance fees often range from 3.50 to 5.00 euros per square meter, while in new buildings with modern building services and an elevator, they can easily reach 4.00 to 6.00 euros.

Our network of experts recommends that prospective buyers review the minutes of the last three homeowners’ meetings, examine the current budget, and inquire about the status of the maintenance reserve fund before purchasing. A low reserve fund indicates potential future special assessments-a risk that should be factored into the purchase price.

Frequently Asked Questions

Can the entire building maintenance fee be passed on to the tenant?

No, only the portion of the building maintenance fee that covers apportionable operating costs under the Operating Costs Ordinance can be passed on to the tenant via the utility bill. The maintenance reserve and administrative costs are not apportionable and must be borne by the owner. As a rule, therefore, around 70 to 80 percent of the maintenance fees can be passed on to tenants.

What happens if an owner fails to pay the maintenance fees?

In the event of late payment, the property management company can first issue a reminder and charge late payment interest. If payment is still not made, the condominium association (WEG) can obtain a court order for payment and enforce the claim. In extreme cases, the apartment may even be subject to foreclosure under Section 19 of the WEG. Maintenance fee debts do not automatically transfer to the buyer upon a change of ownership but remain the responsibility of the community.

How often are maintenance fees adjusted?

Maintenance fees are generally adjusted once a year when the owners’ meeting approves the new budget for the coming calendar year. The management calculates the estimated costs and sets the monthly amount per co-ownership share. In the event of unforeseen additional costs-such as a sharp rise in energy prices-the management may also propose an adjustment during the year, which must then be confirmed by a resolution.

What to do in the event of an unexpected special assessment?

Special assessments arise when the current maintenance reserve is insufficient to cover a necessary measure-such as an urgent roof repair or the replacement of the heating system. As an owner, you have the right to vote against a resolution at the meeting, but once the resolution is passed, you are obligated to pay the special assessment, even if you voted against it. We recommend that investors set aside a financial buffer of 5,000 to 15,000 euros per unit as a reserve for special assessments-especially for older buildings with a known backlog of renovations. In our practice in Nuremberg, we frequently see special assessments in buildings constructed in the 1970s and 1980s where the maintenance reserve was set too low for years.

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