Special assessment for buying and selling a condominium

Anyone who owns real estate in a homeowners association will inevitably encounter the term special levy. This term refers to funds that must be paid by individual owners into the association treasury to cover extraordinary or unforeseen costs of the community. Thus, the special levy does not affect the Exclusive property, but rather the Common property. The assessment of the special levy generally affects the entire condominium owners' association. However, condominium owners should look closely when selling an apartment. This is because the rule applies that whoever resolved the expenses must pay them. As a rule, a special levy is levied when the Maintenance reserve is not sufficient for the intended measure.

The special assessment helps with cash flow shortages

The name says it all: A „special assessment“ serves to, exceptional and unforeseen costs to be covered. If a severe weather event causes damage to common property, extensive repairs may become necessary. If the insurance payouts and the existing maintenance reserves of the homeowners' association are not sufficient for this, apartment owners can Levy a special assessment resolve. In other cases, purchases can be made through the special assessment.

In some cases, apartment owners agree on a special assessment if the budgeted financial resources in Business plan is not sufficient and the funds of the homeowners' association need to be replenished with fresh money. The special assessment was intended to Funding gaps avoided be carried out so that necessary repair measures can be implemented. Good property managers monitor the development of the maintenance reserve and, if financial needs arise, propose owner resolutions to increase the reserve.

In contrast to the regularly paid maintenance fee, which is used to cover the ongoing costs of the community, a special levy should remain the exception through forward-looking calculation by the property management and the Only supplement the business plan. The resolution on the special levy can be proposed by the property manager of the community. The manager has a wide margin of discretion and is entitled to set the amount of the special levy arbitrarily high, provided that their calculation corresponds to the financial requirement. The decision is made by the majority of owners at the meeting.

For simple repair work, usually only one simple majority necessary. At new construction measures however, the legislature sets a unanimous decision ahead. In individual cases, the property manager should therefore check in advance which majorities are necessary.

For the special assessment, there is a Payment obligation (see § 16 sec. 2 of the Condominium Act [WEG]). Certain prerequisites would have to be met. The costs must concern the common property and the homeowners' association must [approve] the payment by a effective resolution determine. In doing so, the distribution key must be taken into account within the scope of the resolution. The specifications regarding the apportionment key result from the community rules or the declaration of division. In most cases, the decision is made by statutory allocation keys, depending on the size of the apartment, how much each property owner has to pay. A deviation from the agreed or statutory cost distribution is only possible if a double qualified majority of the apartment owners agrees.

How is the special assessment billed?

The special assessment complements the business plan and must be properly accounted for by the property manager. Once the amounts have been paid by the owners, the property manager may Billing do not create separately for the special payments, but only first in the annual statement.

The time of the transfer of ownership is what matters!

A special assessment is paid by the person who owns one or more apartments within the community. The decision regarding the special assessment is made by the Owners' meeting. The individual owners are bound by the resolutions of the owners' meeting. Therefore, they must contribute to the decided special assessment. As long as ownership does not change, the matter is usually clear. Questions arise when an ireal estate sale is coming up. Because then it depends on when, when the levy was decided, when it is due, and when the purchase is completed with the entry in the land register.

With the sale of the real estate and the lawful Entry in the land register the rights and obligations arising from property ownership pass to the new owner. In this respect, a special assessment is to be paid by the former owner if it was decided before the property sale and became due before the sale. Conversely, the new owner is naturally obligated if the special assessment was decided after the fully completed, legally binding property sale.

As a rule, a special assessment is immediate due date decided. In these cases, difficulties rarely arise. However, disputes frequently occur when the special levy is decided before the sale, but only becomes due after the sale. The legal situation in this case is also clear. Indeed, recent court rulings establish that the new owner must pay the special assessment if the previous owner agreed to the special assessment before the property sale, but the special assessment only becomes due after the property sale. The new owner assumes the obligation arising from the resolution, even if they themselves were not involved in the resolution. In fact, the logic behind this is easy to understand. This is because the special assessment is generally used for measures that preserve the value of the property. If, for example, the special assessment is used for necessary renovation work, this measure serves directly to Protecting property from further damage and loss of value. The beneficiary of this measure is the new owner. The fact that the new owner was not able to participate in the decision regarding the special levy is irrelevant in this regard.

Seller's obligation to provide information

Since the buyer of a property in a condominium association not only acquires ownership but at the same time numerous Duties takes over, he must be informed before the purchase of the real estate. In particular, the seller must draw the buyer's attention to the fact if a special assessment has already been decided upon., which only becomes due after the sale is completed. Nevertheless, it can still be worthwhile for the seller to insist on a late due date for the special assessment if the sale is planned in the near future.

Tips for owners renting out their property

Real estate investors who rent out their apartment can deduct the special assessment for repair measures as Income-related expenses in the tax return to state. Landlords should take into account that the payment is deducted in the year in which the measure actually took place and the amount of money was spent for this. Thus, the Due date and concern the tax treatment of different years.

Can the special assessment be passed on to the tenant?

The maintenance fee payments cannot be passed on entirely to the tenant, but rather the landlord must distinguish between so-called recoverable and non-recoverable costs. The usual Landlords may not pass maintenance costs on to the tenant, and this also applies to special levies.. Because the special levy is intended for the maintenance of the property. The costs for maintenance or repairs may therefore not be charged to the tenant. However, the special levy is for the landlord tax-deductible.

Are you thinking about selling your condominium?

Do you own an apartment and are you thinking about selling? You are very welcome to contact us. As experienced real estate agents we place great importance on taking the time for your request and considering your individual wishes. Because selling an apartment is a very far-reaching economic process. We accompany the change of ownership professionally and comprehensively. Here you can learn about our Real estate sales service and like others Real estate sellers rate our work.