Property business plan

What is meant by an economic plan?

The business plan contains a list of WEG's expected income and expenses. It also contains information about the addition of maintenance reserves for the upcoming financial year.

Who creates the economic plan?

The business plan of an owners' association contains a list of the WEG's expected income and expenses for the coming financial year. The German condominium law requires the property manager to create this.

Is a business plan mandatory?

Yes, because the WEG business plan is part of the proper management of residential property investments. This is what the Condominium Ownership Act (WEG) provides. The property manager is responsible for the annual creation without having to be explicitly requested to do so by the owners.

When does a business plan have to be drawn up?

Since the WEG reform on December 1, 2020, the owners' association no longer decides on the business plan. The apartment owners only decide on the advances to cover costs and the planned reserves.

Can an economic plan be decided retroactively?

An economic plan for the future financial year should, in principle, be decided on in the previous year. Nevertheless, a retroactive decision is possible.

Is the economic plan binding?

The business plan sets out in a binding manner what proportion of the total costs the individual apartment owner must advance for the financial year.

How high should the reserve be for condominiums?

The pure manufacturing costs are multiplied by 1.5 and then divided by 80 (years). This usually results in a reserve amounting to 65 to 70 percent of all maintenance costs.