The maintenance reserve in a German WEG: amount, saving and use

The maintenance reserve is the shared fund of a German condominium association (WEG) for common-property upkeep; accumulating a reasonable amount is part of proper administration (§ 19 (2) no. 4 WEG). The law names no figure: the owners resolve the amount and save the reserve through the monthly advances (Hausgeld). The reserve may pay only for upkeep, not running or administrative costs.

What is the maintenance reserve and what is it for?

Buildings wear out. Sooner or later the roof has to be reroofed, the facade refurbished, the heating renewed or the pipework replaced. Such measures quickly run to five- or six-figure sums. If an owners association had to raise these amounts at short notice each time through a special levy, it would regularly run into difficulty, especially if individual owners are unable to pay.

This is exactly the function of the maintenance reserve: the community continuously sets aside small amounts in order to pre-finance large expenditure on the upkeep of the common property. It is therefore the financial safety cushion of the WEG.

The terminology matters. Since the WEG reform (WEMoG, in force since 1 December 2020) the law uses the term Erhaltungsrücklage (maintenance reserve). The earlier term Instandhaltungsrücklage means the same thing and is still found in many declarations of division, contracts and statements. The renaming did not change the substance.

Legal basis: § 19 (2) no. 4 WEG

The maintenance reserve is not an optional extra but is anchored in law. Under § 19 (1) WEG, the condominium owners resolve on the proper administration of the common property where nothing else is regulated. § 19 (2) WEG lists what this includes in particular. Number 4 expressly names:

Example: § 19 (2) no. 4 WEG names as a measure of proper administration “the accumulation of a reasonable maintenance reserve”. A community that builds up no reserve at all therefore does not administer the common property properly. Each owner may demand that a reasonable reserve be formed.

The other numbers of § 19 (2) WEG show the connection: alongside the house rules (no. 1), the proper upkeep of the common property (no. 2) and adequate insurance at replacement value (no. 3), proper administration also comprises forming the reserve (no. 4) and setting advance contributions (no. 5). Reserve and upkeep duty are thus directly linked: the reserve finances the upkeep.

How is it saved? Hausgeld and budget

The maintenance reserve is not paid in at one go but built up continuously through the Hausgeld (the monthly advance). The framework for this is the annual budget.

Under § 28 (1) WEG, the manager draws up a budget (Wirtschaftsplan) for each calendar year. In it the owners resolve on the advances towards the costs and towards the reserves provided for under § 19 (2) no. 4. These advances are what the owners pay as their monthly Hausgeld. The Hausgeld therefore has two components:

• the share for the ongoing costs (operating and management costs), which is consumed, and
• the contribution to the maintenance reserve, which is saved and remains in place.

The reserve share is thus not spent but collected in a separate community account. How high the annual contribution is, the owners resolve together with the budget at the owners meeting. In our condominium management in Frankfurt we keep the reserve account separate from the operating account, so that saved and spent funds can always be told apart clearly.

What is a “reasonable” amount?

This is the most common point of uncertainty, because the law only helps to a limited extent: § 19 (2) no. 4 WEG merely requires a reasonable maintenance reserve and deliberately does not put a figure on the amount. What is reasonable, the owners must assess and resolve in each case.

The decisive factors are above all:

• the age and condition of the building - the older and more in need of refurbishment, the higher the requirement
• the size and construction, that is the area and substance to be maintained
• the expected measures of the coming years according to a condition assessment
• the balance already accumulated in the reserve

As rough guidance, various rules of thumb circulate, for example an amount per square metre of living space per year. Also well known is the so-called Petersche Formel, which derives a long-term maintenance requirement from the original construction costs. Such formulas are, however, non-binding orientation values and not a statutory standard. They replace neither a realistic assessment of the specific building condition nor the required resolution of the owners. A formula adopted across the board can be both too low and unnecessarily high.

It is sensible to align the reserve level with a multi-year maintenance plan: which measures are due in five, ten, fifteen years, and how much has to be saved for them? On this basis a contribution can be resolved that neither burdens the owners unnecessarily nor risks underfunding.

What may the reserve be used for, and what not?

The maintenance reserve is earmarked. It may only be used for the upkeep of the common property, that is for maintenance (care and servicing) and repair (mending and renewal). Typical permitted uses are:

• roof refurbishment, facade painting, renewal of thermal insulation
• replacement or repair of the heating system
• renewal of riser and waste water pipes
• repair of the lift, stairwell or underground garage

This list assumes that the measure merely preserves or restores the existing condition. Where it goes beyond that, for example fitting thermal insulation for the first time or switching to a different heating technology rather than simply replacing the existing system, it may count as a structural alteration under § 20 (1) WEG, with its own resolution and the cost rules of § 21 WEG; the statute does not settle such borderline cases itself, so the resolution should state the classification. In practice the maintenance reserve is then drawn on at most to the extent of the upkeep share, the part that renewing the existing system would have cost anyway. See our guide to structural alterations in a WEG for more.

By contrast, the reserve may not be used to pay for:

• ongoing operating costs (insurance, refuse, communal electricity, cleaning)
• management costs such as the manager’s fee
• measures on individually owned property (Sondereigentum), for which the respective owner is responsible

Example: The community has the leaking flat roof refurbished for EUR 40,000. The roof is common property and the refurbishment is a repair, so the cost may be taken from the maintenance reserve. The annual building insurance of EUR 6,000, by contrast, is an ongoing operating cost item and is paid from the advances for ongoing costs, not from the reserve.

The owners decide on any withdrawal from the reserve by resolution at the owners meeting. The manager may not access the reserve account on their own authority but implements a corresponding resolution.

For an owner who lets the flat, the reserve also has a tax side. In its judgment of 14 January 2025 (IX R 19/24) the Bundesfinanzhof, the Federal Fiscal Court, held that crediting Hausgeld payments to the maintenance reserve justifies no deduction as Werbungskosten, income-related expenses, against income from letting and leasing; the necessary causal link arises only if and so far as the association spends the funds on maintenance. What counts is therefore the share of the later spending, not the payment in. It is deductible at once only so far as the measure paid for is maintenance expenditure in tax terms; where it counts as production cost, the share works only through the depreciation. That tax classification is a different question from the classification under the WEG. What follows from this for the tax return is set out in our guide to taxes for landlords in Germany.

Relationship to a special levy

If the accumulated maintenance reserve is not enough for a specific, often unforeseen measure, the community can resolve a special levy (Sonderumlage). This is a one-off additional payment by the owners, charged on top of the ongoing Hausgeld, usually in proportion to the co-ownership shares.

The difference is fundamental:

• The maintenance reserve is the planned, continuous provision. It is meant precisely to avoid special levies.
• The special levy is the unplanned emergency solution when the provision has not been enough or an extraordinary need arises.

The more solidly the reserve is funded, the rarer short-notice special levies become, and the more predictable living in the community becomes. A chronically low reserve, by contrast, shifts the burden into unpleasant one-off payments.

Proof and balance: the asset report

Where does it say how much has been saved? The answer is the asset report (Vermögensbericht). Under § 28 (4) WEG, the manager must prepare a report after the end of the calendar year that states the balance of the reserves and a list of the essential community assets. The balance of the maintenance reserve is thus an express mandatory part of this report.

Through the asset report each owner receives a clear overview once a year: how high the reserve is, how it has developed and what other assets the community holds. Certified property management discloses the reserve balance transparently and traceably. The report is to be seen separately from the annual statement, which under § 28 (2) WEG accounts for the income and expenditure of the year.

Tips for owners and buyers

For members of a community a regular look at the asset report is worthwhile: does the reserve balance match the foreseeable maintenance plan? A reserve that stagnates or falls over the years while the building ages is a warning sign and should be raised at the owners meeting.

For prospective buyers the reserve balance is one of the most important figures of all. Before buying a condominium you should ask to see the asset report, the budget and the latest minutes of the owners meeting and check:

• How high is the maintenance reserve relative to the age and condition of the building?
• Are major measures pending for which the reserve may not be sufficient?
• Have special levies been resolved or announced recently?

A well-funded reserve is worth real money: it lowers the risk of unexpected special levies after the purchase. Bear in mind that the accumulated reserve belongs to the community and is not paid out on sale but reflected in the purchase price.

A forward-looking, well-funded and cleanly documented maintenance reserve is ultimately what carries the long-term value of a property over decades, and what protects owners and buyers alike from nasty surprises.

Editorial responsibility: digo.immo Verwaltung & Invest - certified residential property manager under § 26a WEG (IHK Frankfurt), licence under § 34c GewO. About the certification

This article provides general information only and does not replace individual legal advice. It was created with AI assistance; the legal statements have been checked against the official texts of the law. Legal status: 28/08/2026; laws and case law may change. No warranty is given as to completeness, accuracy or timeliness. When in doubt, please seek qualified advice.