Germany's WEG model: Hausgeld and Jahresabrechnung for managers

What is a WEG and who runs it?

WEG is used for two things: the law — the Wohnungseigentumsgesetz — and the community it creates, the Wohnungseigentümergemeinschaft, the German equivalent of a Cyprus management committee's body of owners or a French syndicat des copropriétaires. The building is divided by a Teilungserklärung (declaration of division), usually accompanied by a Gemeinschaftsordnung (community rules), which together fix each unit's Miteigentumsanteil and the rules the owners live by.

Three organs run it. The Eigentümerversammlung is the owners' meeting, held at least once a year, and the source of every binding decision; since the 2020 reform the invitation period is, as we understand it, three weeks. The Verwalter is the property manager — in most buildings a professional firm — who prepares the budget and the annual statement, executes decisions and represents the community. The Verwaltungsbeirat is an advisory board of owners who check the Verwalter's accounts before the meeting. If you manage buildings in several countries, map your own roles onto these three: committee to Versammlung plus Beirat, managing agent to Verwalter.

How do the Hausgeld and the Wirtschaftsplan work?

The Wirtschaftsplan is the annual budget: the community's expected costs — operating costs, administration, insurance, maintenance and the contribution to the reserve — and each unit's share of them, the Einzelwirtschaftsplan. The owners' meeting resolves it, and since the 2020 reform the resolution is understood to cover the advances owners must pay rather than the plan document itself.

The Hausgeld is the monthly advance each owner pays under that plan. It is a prepayment, not a final charge: what the owner really owes is determined only when the year is closed. If costs overrun mid-year, the Verwalter can propose a Sonderumlage — a special levy — which again needs a resolution. If no new plan is resolved by year end, owners keep paying the old advances until one is.

One feature matters to landlord-owners. German tenancy law lets a landlord pass on only certain operating costs to a tenant — the Betriebskosten listed in the Betriebskostenverordnung — while administration, maintenance and the reserve contribution stay with the owner. A useful Jahresabrechnung therefore separates umlagefähige from nicht umlagefähige costs so a landlord can produce the tenant's own operating cost statement, the Betriebskostenabrechnung, from it.

What does the Jahresabrechnung contain?

The Jahresabrechnung is the annual statement, prepared by the Verwalter after the year closes. It has two layers: the Gesamtabrechnung, the community's total income and expenditure by cost type, and the Einzelabrechnung for each unit, which applies the allocation key to every cost type and compares the result with the Hausgeld the owner actually paid. The difference is the Abrechnungsspitze: a Nachzahlung the owner must pay, or a Guthaben in the owner's favour. As we understand the reformed law, the owners' resolution approves those settlement amounts, not the accounting document as a whole.

Alongside it sit three things a manager from another country may not expect. The Heizkostenabrechnung splits heating and hot water costs under the Heizkostenverordnung, which requires that a substantial portion — between 50 % and 70 % — is allocated by measured consumption and the rest by area or another fixed key. The Vermögensbericht, introduced by the 2020 reform, reports the community's assets: the reserve balance, bank balances, receivables. And many Verwalter include a breakdown of costs that qualify as household-related services under § 35a of the income tax act, because owners living in their own flat can claim part of them against tax — confirm the current rules with a German tax adviser.

Which allocation key applies — Miteigentumsanteile and the alternatives?

The default key is the Miteigentumsanteil, the co-ownership share fixed in the Teilungserklärung, commonly expressed in thousandths or ten-thousandths. Unless the community rules or a resolution say otherwise, every cost is divided by it. That is the German counterpart of the ownership-share method in our post on how common expenses are allocated, and like the Cyprus registered share it rarely changes after the building is divided.

The owners can depart from it. The Gemeinschaftsordnung may set other keys for particular costs — lift costs excluding the ground floor, water by meter, a per-unit administration fee — and the 2020 reform is generally understood to have made it easier for the owners to resolve a different key for individual cost types by simple majority. Heating follows the Heizkostenverordnung regardless. In practice a German Jahresabrechnung shows the key next to every cost line, exactly as a good statement should anywhere, and a manager running a portfolio across countries needs software that holds one key per cost category rather than one per building — which is how Domera's allocation engine is built.

What is the Erhaltungsrücklage?

The Erhaltungsrücklage is the community's reserve for maintenance and repair — the term the 2020 reform adopted for what was previously the Instandhaltungsrücklage, and you will still see both. The law requires that an appropriate reserve be built up but, as we read it, does not prescribe an amount; various rules of thumb circulate, including per-square-metre rates drawn from social housing regulations, and a Verwalter will typically propose a figure in the Wirtschaftsplan for the owners to resolve.

The reserve belongs to the community. It is reported in the Vermögensbericht, funded from the Hausgeld, spent only on resolution, and — as elsewhere in Europe — not refunded to an owner who sells; the buyer takes over the unit's share. The mechanics are those in our post on how much reserve a building should hold: a separate ledger with its own balance, contributions and withdrawals, visible to every owner. Domera keeps the reserve as its own ledger in reserve fund management for exactly this reason.

What changed with the WEMoG in 2020?

The Wohnungseigentumsmodernisierungsgesetz took effect on 1 December 2020 and was the largest revision of the WEG in decades. In general terms — and this is orientation, not a legal summary — it did the following:

• Gave the community clearer legal capacity, with the Verwalter as its representative towards third parties.
• Introduced the zertifizierter Verwalter — owners may require that their Verwalter holds a chamber-of-commerce certification, subject to transitional arrangements.
• Made structural changes (bauliche Veränderungen) easier to resolve, and gave individual owners a right to certain measures at their own cost — commonly cited are charging points for electric vehicles, accessibility works, burglary protection and fibre connections.
• Allowed online participation in the owners' meeting and, as we understand it, removed the old quorum requirement so that a properly convened meeting can resolve regardless of attendance.
• Extended the invitation period for the meeting to three weeks.
• Reframed the budget and annual statement resolutions around the advances and the settlement amounts, and required the annual Vermögensbericht.

The direction is clear even where the detail is not: more decisions by simple majority, a stronger and more accountable Verwalter, owners' rights to certain modernisations, and reporting that shows the community's assets rather than only its cash flow. Confirm any specific point with a German lawyer or a qualified Verwalter before relying on it.

What should a cross-border manager take from it?

The German model is unusually explicit about the things other systems leave to practice: a resolved budget, monthly advances, a year-end reconciliation per unit with the key shown, a separate asset report for the reserve. A manager who runs Cyprus, Greek or Spanish buildings on a monthly actual-cost basis and a German one on advances-plus-settlement needs a ledger that can do both without pretending they are the same.

Concretely: hold the allocation key per cost category, not per building; keep the reserve on its own ledger with a reported balance; produce statements that show building cost, key and unit share on every line; and keep ownership dated, because a Nachzahlung for a year in which the unit changed hands has to be split between two owners. The table summarises the vocabulary.