Through the amendment of the GEG, which came into force on 01.01.2024, and the newly introduced § 71n GEG, property managers must observe special deadlines. Attorney at Law Luzia Hilmer (née Traut) gave a presentation on this topic at the 50th Expert Seminar on Condominium Law of the eid – Evangelical Real Estate Association Germany e.V. – in the beautiful Fischen im Allgäu, which we are pleased to briefly summarize for you.

Obligations to act by 31.12.2024

Pursuant to § 71n para. 1 GEG, the condominium owners’ association (GdWE) must, for every building in which condominium ownership exists and at least one individual floor heating system is installed, request the information pursuant to § 71n para. 1 sentence 2 nos. 1 – 4 GEG from the authorized district chimney sweep by no later than 31.12.2024.

Furthermore, pursuant to § 71n para. 2 GEG, the GdWE must, for every building in which condominium ownership exists and at least one individual floor heating system is installed, request the information pursuant to § 71n para. 2 sentence 2 nos. 1 – 3 GEG from the affected owner by no later than 31.12.2024.

The obligation of the GdWE must be fulfilled by the property manager as representative of the GdWE.

The chimney sweep and the owners are each obliged to provide the information within 6 months (i.e. by no later than 30.06.2025).

Documentation obligations by no later than 30.09.2025

§ 71n para. 3 GEG obliges the GdWE, represented by the property manager, to make the received information available to the apartment owners in a so-called consolidated, i.e. clear but detailed, summary.

If the property manager subsequently receives further information, this must be incorporated into the consolidated version or made available to the owners again in a new version.

Obligation to convene an owners’ meeting without delay following heating replacement

§ 71n para. 4 GEG stipulates that as soon as, after 01.01.2024, a new gas floor heating system is installed or set up in an existing building in an apartment for the purpose of commissioning following the failure of the old heating system, and the property manager becomes aware of this circumstance, the property manager must convene the owners’ meeting without delay, i.e. send the invitation for the owners’ meeting with an appropriate notice period for the date of the meeting.

This obligation serves to initiate the community’s decision-making process regarding future heat supply as quickly as possible, after the five-year transitional period of § 71l para. 1 sentence 1 GEG has begun to run. If the next regular owners’ meeting takes place within the next four months, it is sufficient according to the legislative rationale if that meeting is used to discuss the heat supply.

Obligations and deadlines following replacement of a floor heating system pursuant to § 71l GEG

Once the GdWE has been informed about the replacement of a heating system, the requirements of § 71 para. 1 GEG (i.e. supply with at least 65% renewable energies) must be met pursuant to § 71l para. 1 GEG within a period of five years, whereby the deadline is extended pursuant to § 71l para. 2 GEG in the case of a switch to central heating until the completion of the central heating system, but by no more than 8 years.

If the owners decide on partial centralization, all floor heating systems installed after the expiry of the five-year deadline must pursuant to para. 2 fulfill the 65% renewable energy requirement.

If it is decided that the floor heating systems are to be retained in their entirety, all floor heating systems installed after the expiry of the five-year deadline must pursuant to § 71l para. 3 GEG fulfill the 65% renewable energy requirement.

If no decision is made within the five-year deadline, the GdWE is obliged pursuant to § 71l para. 4 GEG to completely switch to a central heating system.

To ensure that there is no “cheating” and resolutions are backdated, § 71l para. 5 GEG provides that the decision must be communicated to the authorized district chimney sweep without delay in text form. If this notification is made late, an obligation to completely switch to a central heating system would likely also exist.

Decision-making process and resolutions

§ 71n para. 5 GEG regulates the obligation of the apartment owners to pass a resolution within 5 years of the first replacement of a floor heating system on fulfilling the 65% renewable energy requirement and to report on the status of implementation at least once a year until complete fulfillment.

If the GdWE wishes to retain at least one floor heating system, it must pass a resolution to this effect within the five-year deadline. This resolution must be passed with a special quorum. To retain a floor heating system, two thirds of the votes cast and half of all co-ownership shares must vote in favor. If this does not happen, the community is obliged to completely centralize and the retention of decentralized heat supply can no longer be properly resolved. The authorized district chimney sweep must be informed without delay of such a resolution.

Cost allocation

How costs can be distributed in the event of a partial or complete switch to central heating is regulated by § 71n para. 7 GEG.

Are you facing the challenges of § 71n GEG? Please do not hesitate to contact us at KFR – Kanzlei für Real Estate in Hamburg & Munich.

The Federal Council approved the facilitation of the installation of plug-in solar devices (including balcony power plants) in its session on 27.09.2024. Furthermore, the legislative amendment also creates the possibility of holding owners’ meetings entirely online. KFR – Kanzlei für Real Estate summarizes the most important changes.

Privileged installation of plug-in solar devices

§ 20 para. 2 WEG is supplemented by a no. 5. With this legislative amendment, “each apartment owner may demand reasonable structural alterations that serve the generation of electricity through plug-in solar devices.” The purpose of § 20 para. 2 WEG is that an unwilling majority should no longer be able to prevent structural alterations that would be “particularly significant” for individual apartment owners and “sensible from an overall societal perspective”. The installation of a plug-in solar device shall now also constitute such a structural alteration. The provision in § 20 para. 2 WEG must be viewed in cases of rented residential/partial ownership in conjunction with the more or less parallel rights of the tenant under § 554 BGB and harmonized accordingly in its application. For this reason, § 554 was also amended accordingly and reads from the entry into force of the amendment: “The tenant may demand that the landlord permit structural alterations to the rented property that serve the use by people with disabilities, the charging of electrically operated vehicles, burglary protection or the generation of electricity through plug-in solar devices. The claim does not exist if the structural alteration cannot reasonably be expected of the landlord even taking into account the interests of the tenant. The tenant may undertake to provide special security in connection with the structural alteration; § 551 paragraph 3 applies accordingly.” According to the legislative rationale and in accordance with the technical standards of the Association for Electrical, Electronic & Information Technologies (VDE)/Forum Network Technology/Network Operation in VDE (FNN), plug-in solar devices are currently understood to mean small PV systems with a maximum inverter output of 600 watts (W). As a rule, these are devices operable by laypersons, consisting of (at least) one photovoltaic module, a grid-connected inverter, a connected load and a plug for connection to final circuits. More on legal questions surrounding tenancy law and property – click here.

Virtual owners’ meeting

Number 2 creates a resolution competence for purely online meetings (“virtual condominium owners’ meetings”). The existing possibility of enabling online participation in in-person meetings (“hybrid condominium owners’ meetings”) remains unchanged. In future, there will therefore be the option of holding condominium owners’ meetings in person, in a hybrid format or purely virtually. § 23 WEG is supplemented by a para. 1a, which reads: “(1a) The apartment owners may resolve with at least three quarters of the votes cast that the meeting shall take place or may take place within a period of no more than three years from the date of the resolution without the physical presence of the apartment owners and the administrator at a meeting venue (virtual condominium owners’ meeting). The virtual condominium owners’ meeting must be comparable to an in-person meeting with regard to participation and the exercise of rights.”

Transitional provision until 2028

In addition, § 48 WEG, which contains the transitional provisions, was supplemented by a paragraph 6: “(6) If the apartment owners pass a resolution pursuant to § 23 paragraph 1a before 1 January 2028, at least one in-person meeting must be held per year until and including 2028, unless the apartment owners waive this by unanimous resolution. A violation of this obligation does not lead to the invalidity or contestability of resolutions passed at a virtual condominium owners’ meeting.” This transitional provision is intended to facilitate the transition to virtual condominium owners’ meetings for apartment owners and to prevent less tech-savvy people from being “caught off guard” by purely virtual owners’ meetings. Since an evaluation of the condominium ownership reform is to be carried out in 2027, the timeframe until 2028 has not been chosen by chance. This is intended to give the legislator the opportunity to remedy any weaknesses of the virtual owners’ meeting through legislative amendments before this deadline expires.

Practical note

The administrator should inform the apartment owners about the new possibilities and at the same time – if not already done – review their technical capabilities for conducting virtual owners’ meetings and adapt them to the requirements if necessary. The possibility of holding purely virtual owners’ meetings could also significantly simplify the administrator’s life, as the tight time restrictions currently often assumed in case law for owners’ meetings (no meetings during holiday periods, no meetings at “inconvenient times”) could become a thing of the past thanks to the ability to dial in from anywhere. This could also make the profession of condominium property manager more attractive. Letting owners can now hardly defend themselves against the often disparagingly viewed balcony power plants vis-à-vis their tenants, since they themselves have a right to installation against the owners’ association and the reasonableness threshold is thereby considerably lowered. Administrators could proactively pass basic resolutions here to make life easier for landlords.

Obligation of the condominium owners’ association to complete construction after developer insolvency

On 20 September 2024, the Federal Court of Justice (BGH) deliberated on a central question in condominium ownership law: Must the condominium owners’ association (WEG) complete a residential development when the developer becomes insolvent? KFR – Kanzlei für Real Estate explains the background and significance of the proceedings.

Background of the proceedings

The press office of the BGH confirmed the hearing date for 20 September 2024 at 09:00 a.m. Case reference: BGH V ZR 243/23. The press office of the BGH announced that the hearing on the above question will take place on 20.09.2024 at 09:00 a.m. Previous instances: AG Koblenz – Judgment of 18 May 2022 – 133 C 1875/21 WEG LG Koblenz – Judgment of 20 November 2023 – 2 S 29/22 WEG § 18 WEG, § 22 WEG, § 44 WEG

The facts: “Stalled” construction

A derelict property was to be demolished. Subsequently, a new building was to be constructed, in which condominium ownership was established. The developer ceased work and became insolvent. An owner demands, by way of a resolution proposal at an owners’ meeting, the completion of the demolition and the full construction of the building. The resolutions are rejected. By way of a resolution challenge and resolution substitution action, the owner contests the rejection of the resolutions.

Decisions of the lower courts

The district court dismissed the action. Upon the plaintiff’s appeal, the regional court partially upheld it. The defendant association, however, argues that the regional court did not sufficiently take into account the particularities of the so-called “stalled” construction. By analogous application of § 22 WEG, the initial establishment of common property could only be demanded if it had already been constructed to more than half of its value. In any case, however, the substitution resolution was not sufficiently specific. The BGH must now decide on this matter.

Practical note from KFR – Kanzlei für Real Estate

The BGH’s decision could bring clarity on a long-disputed issue. Particularly given the challenges that today’s developers face and the therefore likely insolvency of many developers to be expected, the decision could provide the “surviving” apartment owners with clarity as to whether the purchased apartment could realistically be completed – or whether the dream of condominium ownership was shattered with the developer’s insolvency.

Update: Read the ruling here.