The directors of homeowners’ associations have more to do than ever this year. On the one hand, this is due to the many innovations induced by the reform of the co-ownership law (WEG), which entered into force on December 1, 2020. On the other hand, it is because the owners’ meetings that failed due to the pandemic must be rescheduled. These closed-door meetings take place at least once a year, during which the community of owners makes key decisions for the future. In doing so, it votes, for example, the business plan or an energy modernization of the residential complex.
But in many communities there has not been a date for the meeting for a long time, which is why important decisions are delayed. Federal and state corona regulations, which determine the number of people allowed to meet, also play a role. The interest of apartment owners in the new option of online participation in the owners’ assembly, created as part of the WEG reform, is constantly growing. However, digital gatherings like this are uncharted territory for many owners and managers.
Can the manager invite to a purely digital owners meeting?
The WEG defines these meetings as face-to-face meetings. The owners of an apartment building are therefore not allowed to decide at a meeting of owners to generally move it to the virtual room or to hold it in pure conference call. According to paragraph 23, paragraph 1 of the amendment, the community can accept that owners who wish to participate via electronic communication, for example via video chat, phone or Whatsapp. Owners can also join the discussion if they are in a town far from the meeting location. This can be of particular interest to large homeowner communities if, due to the high incidence, only some of the owners are allowed to meet in person.
However, according to the WEG, the basic possibility for all owners to participate in attendance must remain. This means: The manager has the duty to reserve a room. To hold the meeting in a purely digital way, even considers Rudolf Stürzer, president of Haus & Grund Munich, as “illegal”, since in this case some of the owners would be excluded from the vote. Because there are many older members of homeowners associations who do not have an Internet connection and “never had an iPhone in their hands.”
What do trade associations think of the new online entry option for owners?
Opinion leaders in the real estate industry agree that whatever the Corona crisis is, it is appropriate to include digital communication channels in the owners meeting. Stürzer considers hybrid formats “a good compromise”. They can be used to counter “the huge backlog of renovation measures” resulting from the Corona crisis, explains Martin Kaßler, managing director of the Association of Property Managers of Germany (VDIV). The online participation option means long journeys are no longer necessary. As a result, “attendance at owner meetings is likely to increase,” believes Gabriele Heinrich, Managing Director of Housing in Real Estate. “According to the reformed WEG, they always have a quorum, regardless of the number of owners present. That is why it is all the more important that many get involved here.”
Do you need a decision to participate online?
With the WEG amendment, the legislator makes the meeting of owners of hybrid apartments socially acceptable. Before that, however, owners must agree to the relevant agenda item, i.e. the possibility of online participation for individual owners, in the owners meeting. A simple majority decision is sufficient. “Online participation can be decided for the next meeting or for several years,” says Annett Engel-Lindner, property management specialist at the German Real Estate Association IVD. The lawyer adds that the community can change such decisions.
Make digital decisions: some homeowners associations just do it. “Recent practice has shown that members of young homeowners associations in particular vote via zoom without formal resolutions,” reports Engel-Lindner. “We strongly advise against it, as such decisions can be questionable.”
Is there a legally secure way to hold the owners meeting exclusively digitally?
This is a question that even experts cannot answer with absolute certainty. “Yes,” says Rudolf Stürzer, “owners can specify this in a written agreement, provided everyone agrees.” However, he only considers the procedure practicable in a small community. “This procedure can be set retrospectively in Community regulations, provided all owners agree,” Engel-Lindner said of purely digital collection. In this case, however, a physical room for such meetings is excluded, explains Michael Nack, legal adviser at the Association for Accommodation on Property (WiE) in Bonn. “I see this as a strong interference with the fundamental right of owners to face-to-face meetings, which is why such an agreement would likely be ineffective.”
What is the content of the decision of the assembly of hybrid owners?
“We are now deciding that you can connect digitally” – such a “broadly worded decision would be void,” said Nack, a lawyer specializing in tenancy and residential property law. The opening decision should specify the rights that owners are allowed to exercise. “For example, if you can only vote digitally or participate in discussions. Additionally, the resolution should identify the communication channels allowed at the owners meeting. These include video and audio conferencing as well as chat textual.” Concrete rules for online participation can protect the community and the administrator from being challenged by an individual.
What else do homeowners need to consider when planning?
The legislator only defines the general framework for online participation. Homeowners’ associations must themselves determine the exact terms. To this end, professional associations, such as IVD and habitat, have drawn up guidelines. A hybrid professional event is associated with an organizational and technical effort. This is another reason why Engel-Lindner of the IVD recommends, as a first step, “to make a decision on whether to participate online as soon as possible in the owners meeting and to allow the administrator to get specific offers for the implementation. “The second step is to agree on the specific organization and technology for online meetings. In this context, the choice of server also plays a role:” The IVD votes for an EU service provider so that the administrator can act safely.
Who is responsible for technical issues?
“Of course, the administrator must ensure a stable Internet connection”, emphasizes Kaßler from VDIV. “However, it has no influence if the connection is lost because the owner is crossing the Atlantic with his boat and is in a dead zone.” Michael Nack advises homeowners associations “to establish in advance the possibility for the individual owner to issue a short-term proxy – in case he cannot vote because he has a bad internet connection.” But it is not always easy to determine if there is an internet malfunction in the area if someone was not able to participate in the vote. Maybe the owner doesn’t get along with the software? “You have to look for the cause of a technical malfunction,” says Engel-Lindner. “The proof, however, can be difficult in individual cases.” In a context where there is still a lack of practical experience and there is no case law on the subject, the subject of technology could “cause a lot of problems”, warns Stürzer.
How do you prevent someone who is not part of the owner community from attending the meeting?
According to WEG, the owners’ meeting is a non-public event. This is why the manager meticulously checks who is present and who is not. It’s not that easy online. “If someone is connected by video, you never know who is acting in the background and influencing the owner. I think that’s a big deal,” says Stürzer. And what to do when an owner sits down in a busy street cafe and logs in to the owners meeting? “The meeting manager should step in and kick him out of the event,” Nack notes. It would make more sense if the community had made it clear in advance that such behavior would not be tolerated.
Who bears the additional costs for the hybrid assembly?
In principle, there are additional costs for hybrid owner meetings. This can lead to discussions about what homeowners will have to put up with. “You have to be very careful about the costs that the administrator wants to pass on to the community for a hybrid meeting. in the meeting room because it conveys these items can also be used for meetings of other owners. He has to bear these costs himself, ”explains specialist lawyer Nack. “Only the extra costs that arise for a specific meeting,” he could charge owners. It is conceivable, for example, that the administration needs technical assistance or a moderator for the videoconference.
How can the community remain in a position to act if there is no date in sight for the owners meeting?
If there is an imminent danger, for example when rainwater enters the residential complex, the community can use the circulation method. But also in other situations. “Circular resolutions are suitable, for example, when the stairwell needs to be urgently renovated or when the annual bill needs to be voted on,” explains Martin Kaßler of the VDIV.
However, the obstacles are high: the circular resolution must be adopted unanimously from the start. First, all owners must vote for the process to be used. It is therefore not suitable for controversial topics. After all, during the WEG reform, owners were given the opportunity to vote on a single issue by a majority of the votes cast. However, they must agree to this procedure beforehand – also by simple majority. While circular resolutions had to be done in writing before the WEG reform, this can now also be done in text form – for example by email or Whatsapp.
Either way, in the future more and more communities will incorporate digital technologies into their owner meetings – also because younger members are joining them. After the positive decision to participate online, you have one year to prepare for the hybrid convention. Seems like a long time. But that’s not the case if you know what else needs to be managed in a community of owners.