The court approved a limited liability company that owns three floors of a dilapidated parking garage in Augsburg
(Photo: dpa)
Frankfurt The dispute between the owners of a dilapidated parking garage in Augsburg could also have expensive consequences for other property owners. Because on Friday the Federal Court of Justice (BGH) decided in what is actually a special case, but the judges closed a loophole in the law that, according to real estate experts, should also affect other apartment owners’ associations.
Specifically, the BGH was about a commercial building in the Bavarian city that has been making headlines in the local media for years and engaging the courts. The more than 40 year old “problem parking garage” with 550 parking spaces on eleven floors belongs to several owners.
However, they have different ideas about what should happen to the property: one wanted to renovate, the other to tear it down. The two parties blocked each other so that nothing happened and the building became increasingly dilapidated. Eight years ago, the parking garage management closed the parking garage to a large extent with reference to static and fire protection deficiencies.
The community of owners decided against a joint renovation. The overruled opposing side – the owner of three floors – could at most renovate at their own expense. He did not want to accept that and went to court.
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There they initially decided against him. Normally, a WEG is obliged to remedy a dangerous situation. According to the law, the renovation obligation does not apply if a building is “destroyed to more than half of its value”, argued the Bavarian judges. And that is the case in this case: the car park in itself is worth around 3.6 million euros in the refurbished condition, but the necessary refurbishment costs would amount to around 4.9 million euros.
High costs do not protect against redevelopment
Therefore, according to Paragraph 22 Paragraph 4 WEG old version (now Paragraph 22 WEG), an obligation to rebuild is excluded. This paragraph also applies if the condition of the building is due to insufficient maintenance; the cause of the dilapidation is irrelevant.
But in Karlsruhe there is a different opinion, as the court made clear on Friday (Az. V ZR 225/20): Property owners are obliged to renovate their property even if it is more expensive than the actual value of the property. A possible economic overstrain of individual owners should not lead to a refurbishment failing.
The corresponding Paragraph 22 Paragraph 4 WEG old version (now Paragraph 22 WEG) allows an exception, but this only applies in the event of destruction by “punctual events” such as a fire, flooding or an explosion, and in this case that is where the property is above The judge in charge had previously stressed that her rulings also apply to residential real estate, not just to commercial real estate.
“It’s an exciting verdict because it should affect one or the other apartment owner association in Germany – even if not the majority,” said Gerold Happ, Federal Managing Director at the Haus & Grund association. “There are some WEGs in Germany with renovation backlogs, although only a small part of them should have already reached the point that the case now being negotiated applies”.
But one could “certainly imagine the case that an investor would speak out against renovation measures for years in the hope that one day, invoking the exception clause § 22 Paragraph 4 WEG old version (now § 22 WEG), the entire house against the will of one demolish another homeowner, ”he says. “This gap has now been closed”.
In other words: Anyone who lives in a property that is increasingly falling into disrepair because the owners’ meeting shies away from the costs of renovation does not have to fear that one day the house will be demolished on the grounds that it would now be cheaper than renovation.
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