Parification

Subdivision refers to the legal division of a building into independent residential and partial ownership units in accordance with the Condominium Act (WEG). Through subdivision, a single property is divided into legally independent units of separate ownership that can be sold, encumbered, and bequeathed separately. The basis for this is the declaration of subdivision and an officially approved subdivision plan.

Requirements and Legal Framework

Subdivision requires a notarized declaration of subdivision, a subdivision plan (architectural plans clearly delineating the units), and a certificate of self-containment from the competent building authority. This certificate confirms that the individual apartments are structurally self-contained and can be used independently of one another. After registration in the land registry, separate residential land registers are created for each unit.

The certificate of self-containment is often the biggest hurdle in the process: It requires that each residential unit have its own lockable entrance, its own utility connections (water, electricity, heating), and separate ancillary rooms. Older buildings often do not meet these requirements without renovation work-which makes the division into separate units more expensive and time-consuming than initially expected.

Process of Division into Separate Units

The process begins with hiring an architect to draw up the division plan. The building authority reviews and issues the certificate of separation, after which a notary drafts the declaration of division along with the community rules. Following notarization, the land registry office issues the individual property deeds. Depending on the situation at the relevant authorities and the complexity of the building, this process takes between two and six months.

The community rules, as part of the declaration of division, are one of the most important documents in this process: It governs the rights and obligations of the future owners toward one another-such as the use of common property, cost sharing, and restrictions on renting. Carefully drafted house rules prevent future disputes among the owners. We recommend having the house rules drafted or at least reviewed by a lawyer specializing in WEG law.

Economic Significance and Value Appreciation

By converting a multi-family building into individual units, the individual units can be marketed at significantly higher prices per square meter than the entire building sold as a package. The so-called conversion yield-the difference between individual sales proceeds and the total building value-is a key motivator for project developers and existing investors. At the same time, ongoing administrative costs arise from the WEG community (property manager, reserve fund, meetings).

In the Nuremberg metropolitan region, the typical appreciation effect from conversion into individual units is 15-30% relative to the total building value, depending on the neighborhood and housing structure. In sought-after locations such as St. Johannis or the Südstadt, this effect can be even higher because the market for condominiums is particularly active there, and individual buyers pay significantly higher prices than institutional investors.

Practical Tip for Owners in Nuremberg and Franconia

In Nuremberg, subdivision is particularly worthwhile for multi-family homes in sought-after neighborhoods such as Gostenhof, Johannis, or the Südstadt, where the market for condominiums is very active. We guide you through the entire process: from hiring the architect to coordinating with the building authority to notarization-and, if desired, we subsequently handle the marketing of the individual units.

Tax planning is also important: If the owner has owned the multi-family home for less than ten years, capital gains tax applies to the profit from the sale of the individual units. Early consultation with a tax advisor can help avoid or optimize significant tax burdens.

Frequently Asked Questions

What does a conversion into individual units cost?

The costs consist of architect’s fees (division plan), notary fees, and land registry costs. Depending on the size of the building and the number of units, the total costs typically range between €2,000 and €8,000. In addition, there may be costs for structural modifications if the certificate of separation requires certain conditions to be met.

Can I sell individual units in a multi-family home without parification?

No. As long as parification has not taken place, the property is legally considered a single unit that can only be transferred as a whole. Individual sales are only possible once the property has been divided into condominiums.

How long does the conversion to condominium ownership take before the units can be marketed?

Once the individual condominium deeds have been registered-which typically takes two to six months-the units can be sold immediately. Prospective buyers can reserve units early on during the process, but the notarization of the purchase agreement can only take place after the condominium deeds have been established.

Do existing tenants have to consent to subdivision?

No, the subdivision itself does not require the tenants’ consent. However, under Section 577 of the German Civil Code (BGB), they have a statutory right of first refusal if their apartment is sold for the first time following the subdivision. This right applies to every individual sale of the apartment and must be actively communicated by the seller.

Subdivision and Tenant Protection: What Owners Need to Know

In addition to the tenants’ right of first refusal, the so-called protection against termination under Section 577a of the German Civil Code (BGB) applies when subdivided apartments are sold: Following the initial sale to a third party, there is a statutory waiting period for terminations for personal use. This waiting period is generally three years; in areas with a tight housing market-which includes Nuremberg-it may be extended by state ordinance to up to ten years. Anyone purchasing a parified apartment must take this restriction into account when planning.

For investors purchasing a condominium unit with an existing lease, this regulation is generally not a problem-they do not plan to use the property for their own purposes anyway. For owner-occupiers, however, who wish to move into a rented condominium unit, the waiting period can represent a significant restriction. We explicitly inform our buyers of this legal situation in such cases and help them assess the situation realistically.

Condominium Management After Subdivision

With the creation of condominium ownership, a condominium owners’ association (WEG) is automatically formed. This association must organize itself: an initial owners’ meeting must be convened, a property manager appointed, and house rules as well as a maintenance reserve established. In the initial phase-when the original owner still holds several or all units-they often assume the role of manager. As soon as the first units are sold, it is advisable to hire a professional WEG manager.

The quality of WEG management has a significant long-term impact on the value of all units: A good manager ensures transparent annual financial statements, plans maintenance measures proactively, and mediates conflicts between owners. A poor manager does the opposite-and the consequences are difficult to reverse. After the conversion to condominiums, we help you find a suitable condominium manager in the Nuremberg metropolitan area and prepare for the first owners’ meeting.

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