Condominium owners’ associations with outstanding claims dating from 2022 should act quickly, advises the consumer association Wohnen im Eigentum (WiE). Many claims that became due in 2022 become time-barred on 31 December 2025, including unpaid service charges.
WiE explains how owners’ associations should deal with outstanding claims and highlights common pitfalls.
The property manager must act
In an owners’ association, collecting outstanding claims is the property manager’s responsibility. The manager must keep track of unpaid amounts and pursue them promptly to prevent claims from becoming time-barred. Courts also take this view because the expiry of claims can cause financial losses for the association.
The importance of the statement of assets
Outstanding claims must be shown in the association’s statement of assets. WiE also recommends recording when claims fall due and whether legal action has already been initiated. This makes an approaching limitation deadline visible at a glance. Owners’ associations should pass a resolution requiring these details to be included.
Unpaid service charges and special assessments
Claims by an owners’ association against individual owners for unpaid service charges and special assessments are subject to the standard three-year limitation period under the German Civil Code. The period begins at the end of the year in which the claim became due.
Monthly advance service charge payments set out in the association’s business plan become due during the relevant year. The limitation period for payments dating from 2022 therefore began at the end of 31 December 2022 and ends at the end of 31 December 2025. The same applies to special assessments that became due in 2022.
Additional payments arising from annual accounts
If an owner is required to make an additional payment after the association approves the annual accounts and fails to do so, the claim is also subject to a three-year limitation period. It runs from the end of the year in which the association adopted the resolution and set the due date. Claims arising from the 2021 annual accounts may therefore remain enforceable until 31 December 2025 if the relevant resolution was passed in 2022.
Recourse claims against property managers
An association seeking damages from a property manager for breach of duty must also observe the three-year limitation period. Crucially, the period does not begin when individual owners learn of the breach, but only when the association as a body becomes aware of it. Incorrect decisions and actions by management may therefore remain relevant to liability years later if the association learns of them only at a later date.
Claims to reverse unauthorised structural alterations
If an owner makes structural alterations to jointly owned property without a resolution, the association may demand restoration of the proper condition. However, the three-year limitation period applies to the claim against the owner. Once it expires, the owner can no longer be required to pay for the reversal. The association must then bear the cost, while the owner is required only to tolerate the work. This can be very expensive for the community.
Claims arising from tenancies
Rent and operating cost claims are also subject to the standard three-year limitation period. Owners who let their apartment and still have claims dating from 2022 must therefore act before the end of the year. The same can apply to an association that lets commercial premises. Claims for damage to a dwelling are different: they generally expire six months after the landlord regains possession.
How management should proceed: court payment order or legal action
A court payment order can suspend the limitation period. It is generally cost-effective and particularly suitable for straightforward claims that are unlikely to be disputed. Proceedings should begin as early as possible because a claim may still expire if the debtor’s address is unknown and the order cannot be served in time.
Alternatively, the association can stop the limitation period by filing a lawsuit. Public service may be available if the other party cannot be located, but management must first demonstrate that it attempted to establish a valid address, for example through the population register. The action must be filed by the owners’ association, represented by its property manager, with the competent local court.