The annual statement: from the first booking to the resolution

The annual statement is the work a condominium management practice is judged on. A mistake in it also surfaces latest and costs most, namely when thirty owners hold their statement and one of them checks the arithmetic.

This article walks the path from the individual booking to the resolution. It looks most closely at the point that has been got wrong most often since the German WEG reform.

The path, in four steps

1. Bookings. All year, income and expenditure are booked and every document is assigned to a cost type. That is the foundation, and it is where the quality of the statement is created, or is not. A statement is never better than the assignment of its documents.

2. Cost types and distribution keys. Every cost type has a key by which it is apportioned across the units: by co-ownership share (Miteigentumsanteile), equally per unit, by consumption, or by a separately resolved key. Because the key decides who pays, it is the most important setting in the whole system.

3. Apportionment. The year's costs are apportioned per cost type by its key. This has to come out cent-exact, which means the sum of the individual shares must equal the apportioned total precisely. Rounding differences are precisely what an attentive owner finds.

4. Comparison. The apportioned costs are set against the advance payments made. The difference per unit, the Abrechnungsspitze or balancing amount, results in either an additional contribution or a credit.

The point many get wrong since the reform

Until the 2020 reform, owners resolved on the annual statement as a whole. Today, under § 28 (2) WEG, the unit owners resolve on the collection of additional contributions or the adjustment of the resolved advance payments, that is, on the balancing amount and not on the figures behind it.

That has practical consequences:

• The subject of the resolution is a different one. A resolution reading "the 2025 annual statement is approved" no longer addresses what is to be resolved. It is therefore open to challenge even when every figure is right, because the vote was on the wrong thing.
• The agenda has to support it. What is announced in the invitation must match the resolution.
• The statement itself remains an account of stewardship. It is presented to the owners and explained; what is resolved is the additional contributions and the adjustment of advances.

Word the motion accordingly. Because a great deal hangs on the exact wording, this is a point where a specialist lawyer's eye genuinely pays for itself. This article does not replace one.

The asset report

The reform added a second point that is easily overlooked in practice: § 28 (4) WEG requires the manager to prepare an asset report (Vermögensbericht) after the end of the calendar year, showing the state of the maintenance reserve and a statement of the material common assets. It has to be made available to the owners.

The report is neither part of the statement nor the subject of the contribution resolution. It is mandatory all the same, and if it is missing, that is certain to come up in a challenge.

Why approval has to freeze things

Once resolved, a statement must not change any more. What can go wrong here is mundane and happens constantly: the statement is resolved, and three weeks later a prior-year booking is corrected, perhaps a misassigned document or a credit note that arrived late. If the statement reacts to that, the figures in your system diverge from the ones the owners received. Nobody notices until somebody lays two printouts side by side.

Approval therefore has to freeze the statement and, with it, the bookings it rests on. A correction that becomes necessary afterwards belongs in the current year, not retroactively in the closed one.

Condomana is built that way: approval freezes the annual statement and its bookings, so the figures owners received can never quietly change. By the same principle, the economic plan and special levies are fixed once they are resolved.

The most common errors in the statement itself

Costs in the wrong year. The cash principle applies: what matters is when payment was made, and not when the service was rendered or the invoice issued. The December invoice paid in January therefore belongs to the following year.

Reserve not cleanly separated. Contributions to and withdrawals from the maintenance reserve must be identifiable. A repair paid from the reserve must not additionally be apportioned as a current cost.

Ownership change during the year. If a unit was sold in the course of the year, the statement has to say who bears which part. For that, the system has to record since when somebody has been the owner, and that is exactly the field most often missing in data migrations. There is more on this in Getting your data out of your old software.

Rounding that does not add up. Thirty units and twenty cost types produce six hundred divisions. Without a procedure that distributes the rounding remainder deliberately, a few cents go missing in the end, and they then appear in the statement.

Consumption-based costs. Where heating costs are billed by consumption, the values come from the metering service and their allocation follows its own rules. You carry the values from the metering report over without recalculating them.

A timetable that works

Real time can only be saved at the first point. Capture documents continuously and you have a statement in January; stockpile them and you have a box in January.

Quick check before sending

The last of these six questions takes the least work and is still the one missing most often.

1. Sum of apportioned costs = sum of individual shares, cent-exact?
2. Every cost type apportioned by the key actually resolved for it?
3. Reserve shown separately, withdrawals not apportioned twice?
4. Ownership changes during the year apportioned correctly by time?
5. Asset report prepared and enclosed?
6. Motion worded as additional contributions and adjustment of advances, and not as "approval of the statement"?