You are hamstrung without the good will of your neighbours. This applies to the peaceful co-existence within a home-owners’ association, and can also hold true when you move out again and wish to sell your apartment. In many instances, § 12 of the German Residential Property Act (Wohnungseigentumsgesetz, WEG) gives the home-owners’ association a veto right when it comes to the sale of one of the apartments.
This regulation – also known as a restriction on sales (Veräußerungsbeschränkung) – gives the community of apartment-owners a legal instrument to protect themselves against unsuitable new co-owners. For the seller, this means that although the apartment is exclusively their property, they require the approval of both the property-management company and the other apartment-owners before they can sell up.
Why do other owners get a say over the sale of your apartment?
Let us assume that you have received an exceedingly high purchase offer from a very solvent-seeming businessman. However, upon closer inspection, it turns out that your potential buyer owns a brothel. The suspicion that he might end up also using your apartment for this purpose is not entirely misplaced. As the seller, you might not care too much about this, as long as the purchase price is right. Yet the other owners certainly have a justified interest in avoiding the potential nuisance by preventing the effective sale of your owner-occupied apartment to this buyer. This is the purpose of the restriction on sales – § 12 WEG.
The limits on the right of veto
However, your neighbours’ right of veto is not unlimited and exists only if it has also been recorded in writing within the articles of your home-owners’ association. In addition, the agreement must have been entered in the German Property Register. If you have any reason to suspect that your potential buyer may be unpalatable to your neighbours for whatever reason, you should start by checking whether there is any mention of a right of veto in the articles of your home-owners’ association. If this is the case, you might be well advised to seek legal advice. This is because, in a worst-case scenario, a purchase contract may become void after the fact if it turns out that you did not have the approval of the other owners at the time of exchanging contracts. Talking to your neighbours in good time and seeking their approval of your buyer is, of course, also a good strategy. It is also worth mentioning that it doesn’t come down to the opinion of any one individual owner, who might be suspicious no matter who the buyer is and who views every child running up the stairwell as guilty of a breach of the peace. A majority decision on the part of the other owners is required to prevent the sale of your apartment. Furthermore, they must cite a valid reason to reject the sale, such as the aforementioned example.
One last tip to conclude with: sell your apartment via a professional estate agent! They will always have an overview of all the relevant legal matters during property transactions, and from the very outset will only consider serious candidates when selecting potential buyers. They will thereby ensure that the home-owners’ association is satisfied with the new neighbour, and that you get the sale price you desire.
Do you wish to sell your apartment in a straightforward and legally compliant way while generating the maximum profit? Then get in touch with us! We are happy to assist you.
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Disclaimer: This article does not constitute tax or legal advice in individual cases. Please consult a solicitor and/or accountant to clarify the circumstances of your specific case.
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