May 5, 2023, 3:55 am | Read time: 5 minutes
When it comes to renovation measures for your own home, making big decisions can be difficult, especially if you have to make them alone. It can become even more complicated if you are part of a WEG–a homeowners’ association.
If you are part of a WEG, a homeowners’ association, you cannot simply renovate your property for energy efficiency, even if you are the owner. The land and the building, including the roof, facade, windows, heating, basement, water, and electrical lines, are only partially yours. They are co-owned with all other owners, and therefore, any changes require a collective decision. Not everyone wants or can do this, making it difficult to modernize such properties.
Homeowners’ Associations Mean Compromises
“Every decision is a compromise that often has to be painstakingly worked out,” says Eva Kafke, author of the book “Energetic Renovation in the Homeowners’ Association,” published by Stiftung Warentest. This is one reason why the renovation rate in WEG is currently low. But it is not impossible to convince homeowners of the necessity.
Rising energy costs and public-law obligations are strong arguments. Like all property owners, a homeowners’ association must meet the requirements of the Building Energy Act (GEG). Among other things, it stipulates that from January 1, 2024, every newly installed heating system should be operated with 65 percent renewable energy.
There Is No Fixed Schedule
The energy issues in WEG are the same as in single-family homes. “Often, for example, the installation of a new heating system is discussed in WEG to save energy,” says Eva Kafke. “This can then be the impetus for a comprehensive energy renovation.” Which projects are undertaken depends on the age and condition of the property and the composition of the homeowners’ association. There is no fixed schedule for renovation in WEG.
“Often, one or more owners approach the management board and the manager because they believe something needs to be done. Or the manager takes the initiative,” says Martin Kaßler, managing director of the Association of Property Managers Germany in Berlin. Then it is clarified whether an individual measure is sufficient or a more comprehensive renovation is necessary. External expertise is required for this, such as from an energy consultant, an architect, or construction professionals. The manager usually obtains this.
Also interesting: The 5 Most Important Insurances for Owners
Good Preparation Helps in Decision-Making
Legal advice and support are also advisable in advance. “Whether renovation projects can really be implemented in WEG depends on the right resolutions being passed with the necessary majorities,” says attorney Michael Nack from the Consumer Protection Association Wohnen im Eigentum in Bonn. It can certainly happen that measures that were already well advanced in planning ultimately fail because individual owners vote against them.
The procedure is complicated. “All renovation measures must be decided in a homeowners’ meeting,” says Nack. First, it must be decided whether to renovate at all. Then, based on company offers, a vote is taken on which measures should be implemented.
In addition, financing must be secured. This includes deciding whether financing will come from the maintenance reserve or if a special levy is necessary. A combination of both financing sources and taking out a loan is also possible. Additionally, funding can be applied for. “This is a package of measures that usually requires several homeowners’ meetings,” says Nack. “The more precisely the individual agenda items are prepared, the faster the decision-making process and thus the implementation will be.”
The Role of the Administrative Advisory Board in a Homeowners’ Association
How Homeowners Can Get a Solar System
Double Qualified Majority Eases Financing
The resolutions are then passed by a simple majority. However, for structural changes that a renovation entails, only those who vote in favor bear the costs. “Understandably, this is not desired,” says Michael Nack. “Why should a simple majority want to bear the costs for everyone?”
To get all owners on board for financing, a double qualified majority is necessary. This means that at least three-quarters of all eligible voters must agree, who also hold more than half of the co-ownership shares. An alternative would be proof that the measure pays off. If this is provided, all owners must also share the costs.
This large organizational effort naturally takes time. “Sixty-six percent of all renovation projects in WEG take three years or longer,” says Eva Kafke. “In the meantime, not only do technical possibilities evolve, but the framework conditions also change, funding expires, and new funds are set up.” Then the work for the WEG starts all over again.
Initiative Can Come from Various Parties
In many WEG, the organization and management of energy renovation are in the hands of the manager. But owners and the management board can also get involved. “Such projects involve a lot of work,” says Martin Kaßler. The homeowners’ association should definitely set and approve the fees for the manager and external experts in advance. “A corresponding incentive system also leads to projects running more quickly.”
Funding is also a big topic. “It is a misconception that homeowners are automatically wealthy,” says Kaßler. Often, they are older people who have paid off their condominium over their lifetime and now live rent-free. They cannot finance large renovation projects out of pocket and therefore oppose them. Others are still paying off loans for the apartment and have no financial leeway.
With material from dpa