German Court Defines Rules for Cost Allocation in Property Owner Associations

The Federal Court of Justice allows cost redistribution among property owners under strict conditions to ensure fairness and justification.

The Federal Court of Justice (BGH) ruled that property owner associations (WEG) can redistribute costs to individual owners, provided the changes are well-justified and not arbitrary.
The court addressed disputes involving cost allocation for shared property elements, such as garages and heating systems, emphasizing the need for fairness in revised agreements.
One case involved a property owner being required to pay for garage repairs despite not owning a garage space; the BGH sent the case back to a lower court to assess justification.
The court upheld a WEG decision to shift cost allocation from ownership shares to heated living space, stating the previous arrangement unfairly favored some owners.
Property owners can challenge cost allocation changes through legal action, but the court noted that legal fees might still partially fall on successful plaintiffs in small associations.