Condominium-converted apartment building: manager's related contractor and three quotations

For a condominium-converted apartment building, the owners' association should separate two questions before the manager places certain orders. Is the proposed contractor connected to the manager by a family or economic relationship? And do the works go beyond ongoing maintenance or amount to a major improvement, for which at least three quotations must be obtained? Section 20(4) WEG links these transparency duties to property management.

The rule creates a traceable basis for the owners' decision. It does not decide whether works are technically necessary, and this provision does not automatically require the cheapest quotation to be selected. This article deals exclusively with a WEG owners' association after condominium conversion. An undivided apartment building owned by one person must be assessed separately.

What section 20(4) WEG requires for a manager's order

Section 20(4) WEG sets out two separate duties. If the manager intends to enter into a legal transaction with a person connected to the manager by a family or economic relationship, the manager must inform the condominium owners of that relationship. For maintenance works beyond ongoing maintenance and for major improvement works, the manager must obtain at least three quotations.

The duties depend on different facts. The relationship concerns the connection between the manager and the contracting party. The three-quotation rule concerns the nature and scope of the works. The two questions should therefore be answered separately in the decision file.

The provision forms part of the management of an owners' association. It does not replace a review of the condominium agreement, technical planning or the resolution required for the particular matter. The specific order and the interests of the owners' association remain decisive.

When a relationship with the contractor must be disclosed

The duty to inform arises when the manager intends to enter into a legal transaction with a person connected to the manager by a family or economic relationship. The proposed contracting party is therefore central. A general statement about possible conflicts does not replace an assessment of the planned transaction.

Disclosure does not automatically make the order unlawful. It makes the connection visible to the condominium owners and allows them to consider the order with relevant information. The file should therefore link the contractor, the planned scope and the content of the disclosure.

If the relationship is unclear, the owners' association should clarify the relevant facts before deciding. A general suspicion is not enough for the legal assessment. Disclosure alone also does not establish the quality or price of the works.

Which works require three quotations

The three-quotation duty covers maintenance works beyond ongoing maintenance and major improvement works. A precise specification is therefore the first step. Calling a project a repair or renovation does not answer the legal classification by itself.

Section 20(4) WEG does not state a general euro threshold at which three quotations are always required. The relevant distinction remains the one between ongoing maintenance, further maintenance and major improvements. If the scope is uncertain, the technical and legal classification should be recorded.

For ongoing maintenance, the owners' association should not confuse the everyday maintenance question with the statutory rule for further works. Conversely, a major project should not be placed without a quotation comparison merely because of its label. The wording of the order is the starting point.

What information should be organised before the decision

Before the owners' association considers the matter, the file should show what work is to be ordered, who the contractor is and how the manager has classified the works. If there is a family or economic relationship, the specific disclosure should also be part of the decision record.

For works beyond ongoing maintenance and for major improvements, the at least three quotations should be placed side by side with their scope, price, execution conditions and material differences. This shows whether the quotations actually concern the same task.

This is a practical basis for a traceable decision. Section 20(4) WEG does not prescribe a particular table format in the provision reviewed here. The file should nevertheless be clear enough to explain the later resolution and the selection.

How the owners' association should compare quotations

At least three quotations create a basis for comparison. The scope of the promised work, the technical assumptions and the timetable should be compared first. Prices can be compared fairly only when the quotations cover the same work and additional items are visible.

Section 20(4) WEG requires at least three quotations. This subsection does not impose an automatic award to the cheapest quotation. The manager must also safeguard the common interests of the condominium owners and follow lawful instructions of the majority.

If the selected quotation differs from the others in price, quality, timing or risk, the difference should be explained in the decision note. That explanation does not replace any required consent, but it makes the selection reviewable by the owners' association.

Which questions the manager and owners should review separately

The manager should first record the facts: contractor, any family or economic relationship, work scope and quotation position. The owners' association can then assess whether the documents present the intended decision clearly and whether further information is needed.

Relationship disclosure and quotation comparison are connected but not identical. A contractor with no relationship to the manager may still require three quotations for a major improvement. Conversely, the disclosure duty remains relevant even where the three-quotation rule does not apply.

Separating the questions creates a clear file structure. One part records the relationship, another the work scope and a third the quotations and selection. This prevents one unresolved point from obscuring the entire decision.

Which documents should be kept for a later review

The review file should contain the order outline, the proposed contractor's details, the relationship disclosure and the specification. For further maintenance or major improvement works, it should also contain the at least three quotations and the comparison note.

The invitation or information provided to the owners, the relevant decision records, the resolution and subsequent communication should also be preserved. The article on the condominium agreement after conversion addresses the neighbouring framework. The article on taking over management after closing addresses the separate operational handover.

The file should show what information was available when the decision was made. Documents obtained later should not conceal earlier gaps. A chronological record makes the legal and factual review of the management process easier.

Next steps and legal updates

The owners' association and the manager should compare the proposed order, the relationship with the contractor, the work scope and the quotations as one decision file. New articles and legal updates from the firm are available through BRANDaktuellen Rechtsnews.