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WHAT ROLE DOES THE MAINTENANCE RESERVE PLAY WHEN SELLING AN APARTMENT?
The amount of the maintenance reserve is of decisive importance not only for the seller but also for the buyer. Many sellers want to know what happens to the maintenance reserve when an apartment is sold.
THE MAINTENANCE RESERVE SHOULD BE APPROPRIATE
The law obliges the community of owners to build up an appropriate maintenance reserve (German Condominium Act, WEG § 21 (5) No. 4). The amount saved in the maintenance reserve influences the value of the condominium. The condition of the common property and upcoming renovations should be taken into account.
DEVELOPMENT OF THE MAINTENANCE RESERVE
The owner pays the contribution to the maintenance reserve monthly together with the rest of the service charge (Hausgeld). The property manager reports on the development of the maintenance reserve in the annual statement. When a condominium is sold, the maintenance reserve is not paid out to the seller but passes to the new buyer.
STATE THE MAINTENANCE RESERVE IN THE PURCHASE CONTRACT
It is advisable to state the amount of the maintenance reserve in the purchase contract. This benefits the buyer when paying real estate transfer tax: the tax relates to the land acquired, and stating the maintenance reserve in the purchase contract reduces the real estate transfer tax. No buyer should miss out on this advantage.