Definition and legal classification of the Administrative Advisory Board
Der Administrative Advisory Board is a committee that exists within a homeowners’ association (WEG-Gemeinschaft) under the German Condominium Act (Wohnungseigentumsgesetz, WEG). The central task of the Administrative Advisory Board is to assist the administrator in the performance of their duties and to safeguard the interests of the condominium owners. The main legal basis for the Administrative Advisory Board is Section 29 of the German Condominium Act (WEG).
Legal foundations
Legal basis in the Condominium Act
According to Section 29 WEG, the homeowners’ association may appoint an Administrative Advisory Board by resolution. This board usually consists of three members, including a chairperson and two other board members. Deviating arrangements can be stipulated in the community rules or an additional agreement.
Appointment and removal
The Administrative Advisory Board is appointed by resolution of the owners’ meeting and can likewise be removed by majority resolution. The term of office is not legally defined and may be regulated individually in the community rules or by owners’ resolution.
Duties and powers of the Administrative Advisory Board
Support and supervision of the administrator
The main task of the Administrative Advisory Board is to support and monitor the administrator. This particularly includes the following activities:
- Participation in the preparation and conduct of owners’ meetings
- Review of the business plan, annual accounts, and accounting documents
- Control and verification of the management of communal funds
- Advising the administrator on important matters
- Facilitating communication between administrator and owners
Powers of representation and authorization
The Administrative Advisory Board is not a representative body of the community, but acts solely in a supporting role. It does not possess its own decision-making or directive authority towards the administrator or the homeowners’ association unless explicitly granted by resolution.
Audit function
A central area of activity is the auditing of the annual accounts. The Administrative Advisory Board examines the documents and reports to the owners’ meeting on whether there are any objections and, if so, what they are. However, the board’s audit does not replace each individual owner’s independent review.
Special duties by resolution
Additional tasks can be assigned to the Administrative Advisory Board by resolution of the owners’ meeting, provided that the legal limits of task performance are not exceeded. In particular, the board can be tasked with obtaining quotes for maintenance work or supervising certain projects.
Rights and duties of the members of the Administrative Advisory Board
Duty to perform
Members of the Administrative Advisory Board are obliged to perform their duties conscientiously and carefully. Duties particularly include the objective and neutral representation of the community’s interests.
Liability
The liability of members of the Administrative Advisory Board is governed by Section 29 (3) WEG. They are liable only for intentional or grossly negligent breaches of duty. A potential obligation to pay damages to the homeowners’ association may arise if such a breach of duty by the board members can be proven.
Release and discharge
The discharge granted by the homeowners’ association mainly concerns the auditing and supervisory function of the board at the owners’ meeting. A discharge generally releases members from liability for the past, provided there have been no gross breaches of duty or intentional harm.
Remuneration and compensation of expenses
The Administrative Advisory Board generally performs its role on an honorary (voluntary) basis. Legally, remuneration is not provided for. However, the homeowners’ association may, by resolution, set a compensation for expenses or a flat-rate remuneration for members of the Administrative Advisory Board. The exact amount and structure can be determined by the community individually.
Composition and voting
Number of board members
According to Section 29 (1) WEG, the Administrative Advisory Board usually consists of three people: a chairperson and two assessors. A smaller or larger number is possible if it serves the interests of the community and is determined by resolution or in the community rules.
Election and removal from office
Election as well as possible removal of members is always by majority resolution of the owners’ meeting. Re-election is possible.
Termination of office of an Administrative Advisory Board member
The office of the board ends upon expiration of the term specified in the appointment, by corresponding resolution of the owners’ meeting, or by resignation of the member. The office also expires upon death or loss of membership within the homeowners’ association, for example due to a change of ownership.
Legal significance in the context of the homeowners’ association
Relationship to other bodies
The Administrative Advisory Board is not a decision-making body like the owners’ meeting, but rather a supportive and advisory committee. Its role is limited to support as well as control and audit functions.
Significance for the management of communal property
By involving the Administrative Advisory Board, the transparency of management is strengthened, the efficiency of administrative processes is increased, and the representation of the individual owners is ensured.
Summary
The Administrative Advisory Board according to the WEG is a central committee within a homeowners’ association, acting particularly in an advisory, supervisory, and supporting capacity. The legal foundations, tasks, duties, and rights are especially governed by Section 29 WEG as well as by resolutions of the owners’ meeting. The role of the Administrative Advisory Board makes a significant contribution to a transparent, effective, and community-oriented management of condominium property and is an integral part of modern homeowners’ association structures.
Frequently Asked Questions
Can the Administrative Advisory Board be held liable for damages to the community?
Under certain circumstances, the Administrative Advisory Board can be held personally liable. Liability in particular may arise if the board violates its duties intentionally or with gross negligence and thus causes damage to the homeowners’ association. Key duties include, among others, the review and supervision of the administrator’s actions, monitoring the annual accounts, and assisting in the preparation of owners’ meetings. If the board neglects these due diligence obligations in its role as supervisor, so-called ‘organ liability’ may apply. This is legally based on the principles of mandate law (§§ 662 ff. BGB) and Section 21 (9) WEG (Wohnungseigentumsgesetz). However, in an individual case, actual damage must have occurred as a result of the breach of duty. Liability for simple misconduct (ordinary negligence) is generally excluded, unless different regulations exist in the community rules. To protect the Administrative Advisory Board, the homeowners’ association may also take out professional indemnity insurance.
Is there a mandatory obligation to accept the role of Administrative Advisory Board member?
In general, there is no statutory obligation to accept the position of Administrative Advisory Board member under German condominium law. The office is expressly voluntary pursuant to Section 29 (1) WEG. No one can be appointed to or compelled to remain in the Administrative Advisory Board against their will. Election to the Administrative Advisory Board always requires the consent of the person concerned. Furthermore, a board member may resign from office at any time for good cause, provided that proper administration is not thereby jeopardized. In rare cases, different arrangements may be made in the community rules or by agreement.
Is the Administrative Advisory Board subject to a duty of confidentiality?
Yes, members of the Administrative Advisory Board are bound by confidentiality obligations regarding confidential information they obtain while exercising their office. This particularly concerns personal data of owners, details of tenancy law disputes, or financial information of the community. The duty of confidentiality arises from the duty of loyalty and the protective interests of the homeowners’ association, as well as data protection requirements, in particular the GDPR. Violations of this duty may result in claims for damages and, if necessary, premature removal from office.
What rights does the Administrative Advisory Board have in relation to the administrator?
Pursuant to Section 29 WEG, the Administrative Advisory Board has the right to inspect all documents of the homeowners’ association, such as accounts, business plans, and contract documents. It may request the administrator to provide or present specific documents if required for its supervisory function. Furthermore, the board may question the administrator on certain matters and request information. However, there is generally no right to issue instructions to the administrator; the board acts in an assisting and supervisory capacity but does not make independent administrative decisions. In individual cases, the community rules may grant additional rights to the board.
Can the Administrative Advisory Board be removed and under what circumstances?
Members of the Administrative Advisory Board can be removed at any time by majority resolution of the condominium owners, without the need for a special important reason. This rule follows from the nature of the board office as an office revocable at any time. However, the community rules may stipulate a different arrangement, such as requiring a valid reason for removal. For evidential purposes, the removal should be recorded in writing. Upon removal, the office ends immediately, unless a different procedure is defined in the community rules.
Is the Administrative Advisory Board authorized to make independent decisions for the community?
No, the Administrative Advisory Board is primarily a supervisory and supporting body as defined by Section 29 WEG. It may not make independent legal transactions or binding decisions for the homeowners’ association, unless the association has granted it a specific power of attorney in an individual case. Any powers beyond the supervisory and advisory role must be expressly conferred by resolution of the owners or via the community rules. Without such authorization, legal transactions by the board on behalf of the association are invalid.
Can the Administrative Advisory Board receive remuneration or compensation for its activities?
As a general rule, the office of the Administrative Advisory Board is performed without remuneration (Section 29 (3) WEG). Nevertheless, the condominium owners may, by appropriate majority resolution or by provisions in the community rules, determine reasonable compensation of expenses or remuneration. This remuneration must be transparent, appropriate, and clearly defined, and should be recorded in the minutes of the owners’ meeting. Tax aspects—particularly with regard to possible income tax liability—should also be considered.
