1. Maintenance Management Systems for Condominium Owners’ Associations under the German Condominium Act
Prof. Dr. Andreas Saxinger, Miriam Hansel B.Sc.

2. Maintenance Management Systems for Condominium Owners’ Associations
Prof. Dr. Andreas Saxinger
Miriam Hansel B.Sc.
Maintenance Management Systems for Condominium Owners’ Associations
Agenda
Introduction – definitions and questions
Calculation models
Sample calculations of practical examples
Review of the results
Conclusions

3. Maintenance Management Systems for Condominium Owners’ Associations
Prof. Dr. Andreas Saxinger
Miriam Hansel B.Sc.
Maintenance Management Systems for Condominium Owners’ Associations
Introduction (1)
Current challenges for the property management
Most residential buildings were built between 1965 and 1986
Average construction age of 67% of the German property portfolio is over 50 years
Technical defects of buildings or lack of technical knowledge of the property managers
Current situation is unsatisfactory regarding maintenance planning due to a lack of legal provisions and appropriate strategy

4. Maintenance Management Systems for Condominium Owners’ Associations
Prof. Dr. Andreas Saxinger
Miriam Hansel B.Sc.
Maintenance Management Systems for Condominium Owners’ Associations
Introduction (2)
Condominium Owners´ Association
The rights and obligations of the Condominium Owners´ Association are defined in the German Condominium Act (Wohnungseigentumsgesetz - WEG)
Owners establish an association with partial legal capacities in order to maintain the property held in joint ownership
Condominium Owners´ Association is justified by ensuring the creation of common areas held in common ownership and individual unit held in individual ownership
Property manager
The property manager is elected by the Condominium Owners´ Association by simple majority
The property manager does not need to fulfill special professional qualifications
Obligatory tasks are the current maintenance and repair of the common areas and building up sufficient maintenance reserves

5. Maintenance Management Systems for Condominium Owners’ Associations
Prof. Dr. Andreas Saxinger
Miriam Hansel B.Sc.
Maintenance Management Systems for Condominium Owners’ Associations
Introduction (3)
New maintenance management systems are required
Ageing buildings and rising construction costs lead to reconsideration of maintenance planning
Maintenance managements systems need to react at an early stage to pending costs and repairs
Proactive maintenance planning can not only be seen as a refurbishment, but also as a possibility to enhance property values

6. Maintenance Management Systems for Condominium Owners’ Associations
Prof. Dr. Andreas Saxinger
Miriam Hansel B.Sc.
Maintenance Management Systems for Condominium Owners’ Associations
Calculation models (1)
- Peters‘ formula -
The formula was developed by the architect Peters in 1984
One of the few formulas, but most commonly used for calculating the maintenance reserve
Formula: Construction costs x 1.5 x 65 / 80 x floor space x 100
Key determinants:
Building age: 80 years
Maintenance costs: One and a half times of the construction costs, applied to % - 70% of the floor area of the building

7. Prof. Dr. Andreas Saxinger
Miriam Hansel B.Sc.
Maintenance Management Systems for Condominium Owners’ Associations
Calculation models (2)
- Second Calculation Regulation -
Formula was initially designed to calculate the maintenance charges per unit for publicly-subsidized housing (not for the private sector)
Also used by property managers to calculate the maintenance reserve
Figures must be adjusted to the differing building standards and exclude individual units
Key determinants:
Maintenance charges per unit depending on the building age
Maintenance charges per unit are continuously adjusted to the underlying consumer price index
Source: Own diagram based on the II. Calculation Regulation, The development of the maintenance flat charges, December 2016

8. Sample calculations (1)
Prof. Dr. Andreas Saxinger
Miriam Hansel B.Sc.
Maintenance Management Systems for Condominium Owners’ Associations
Sample calculations (1)
- Approach -
An overview of the three sample properties provided by a leading property management company in Munich, Germany
Presenting the property management company’s original calculated expenses
Calculating the reserve by using Peters’ formula and the Calculation Model of the Second Calculation Regulation
Making adjustments to the well-known formulas by preparing a 5-year-forecast of the expected maintenance and repair measurements required on the basis of the building condition
Reviewing the results and evaluating the different calculation modules

9. Sample calculations (2)
Prof. Dr. Andreas Saxinger
Miriam Hansel B.Sc.
Maintenance Management Systems for Condominium Owners’ Associations
Sample calculations (2)
- Overview of the three example properties-
Property number
Location
Year of construction
Floor area
(m²)
Maintenance reserve
Peters‘ formula
II. Calculation Regulation 83
Oberföhring (Munich)
1965
8,177
28, €
114, € 39
Neuperlach (Munich)
1972
10,770
54, €
150, € 31
Haidhausen (Munich)
2004
10,032
147, €
86, €

10. Maintenance Management Systems for Condominium Owners’ Associations
Prof. Dr. Andreas Saxinger
Miriam Hansel B.Sc.
Maintenance Management Systems for Condominium Owners’ Associations
Property number 83 (1965; 8,177 m²)
Peters’ formula (Peters´sche Formel)
II. Calculation Regulation (II. BV)
 2017
2018
2019
2020
2021
Opening balance
316, €
319, €
-37, €
-308, €
-444, €
- calculated expenses
-24, €
-385, €
-300, €
-164, €
-143, €
+ maintenance reserve
28, €
Closing balance
-559, €
2017
2018
2019
2020
2021
Opening balance
316, €
405, €
134, €
-51, €
-101, €
- calculated expenses
-24, €
-385, €
-300, €
-164, €
-143, €
+ maintenance reserve
114, €
Closing balance
-131, €

11. Maintenance Management Systems for Condominium Owners’ Associations
Prof. Dr. Andreas Saxinger
Miriam Hansel B.Sc.
Maintenance Management Systems for Condominium Owners’ Associations
Property number 83 (1965; 8,177 m²)
Demand-oriented maintenance planning
2017
2018
2019
2020
2021
Opening balance
316, €
438, €
199, €
46, €
28, €
- calculated expenses
-24, €
-385, €
-300, €
-164, €
-143, €
+ maintenance reserve
146, €
Closing balance
32, €

12. Property number 83 (1965; 8,177 m²) - Results -
Prof. Dr. Andreas Saxinger
Miriam Hansel B.Sc.
Maintenance Management Systems for Condominium Owners’ Associations
Property number 83 (1965; 8,177 m²) - Results -
Peters‘ formula (Peters´sche Formel):
Maintenance reserve only covers the maintenance costs for the first year
Construction costs were very low in 1965, therefore maintenance measures can not be financed without extra special payments
The reserve calculated by the formula will not be sufficient to cover the rising maintenance costs and repairs of older buildings
II. Calculation Regulation (II. BV):
Maintenance reserve only covers the maintenance costs until the end of 2018
Annual maintenance reserves are too low in to cover the rising expenses of old buildings without extra special payments
Demand-oriented maintenance planning (Bedarfsorientierte Planung):
Maintenance reserve covers the maintenance costs of all years, by determining the annual reserve to nearly 150, €

13. Maintenance Management Systems for Condominium Owners’ Associations
Prof. Dr. Andreas Saxinger
Miriam Hansel B.Sc.
Maintenance Management Systems for Condominium Owners’ Associations
Property number 39 (1972; 10,770 m²)
Peters’ formula (Peters´sche Formel)
II. Calculation Regulation (II. BV)
 2017
2018
2019
2020
2021
Opening balance
305, €
359, €
407, €
422, €
356, €
- calculated expenses
0.00 €
-6, €
-38, €
-120, €
-2,075, €
+ maintenance reserve
54, €
Closing balance
-1,665, €
Opening balance
,00 €
,12 €
,24 €
,30 €
,94 €
- expenses
,34 €
,34 €
,00 €
,10 €
,75 €
+ maintenance deposit
,46 €
Closing balance
,23 €
2017
2018
2019
2020
2021
Opening balance
305, €
455, €
599, €
711, €
742, €
- calculated expenses
0.00 €
-6, €
-38, €
-120, €
-2,075, €
+ maintenance reserve
150, €
Closing balance
-1,183, €

14. Maintenance Management Systems for Condominium Owners’ Associations
Prof. Dr. Andreas Saxinger
Miriam Hansel B.Sc.
Maintenance Management Systems for Condominium Owners’ Associations
Property number 39 (1972; 10,770 m²)
Demand-oriented maintenance planning
2017
2018
2019
2020
2021
Opening balance
305, €
705, €
1,098, €
1,460, €
1,739, €
- calculated expenses
0.00 €
-6, €
-38, €
-120, €
-2,075, €
+ maintenance reserve
400, €
Closing balance
63, €

15. Maintenance Management Systems for Condominium Owners’ Associations
Prof. Dr. Andreas Saxinger
Miriam Hansel B.Sc.
Maintenance Management Systems for Condominium Owners’ Associations
Property number 39 (1972; 10,770 m²)
- Results -
Peters‘ formula (Peters´sche Formel):
Maintenance reserve covers the maintenance costs until the end of 2020,
The initial calculation in 2017 is already sufficient with an amount of 305, €, therefore the maintenance measures can be financed
II. Calculation Regulation (II. BV):
Maintenance reserve covers the maintenance costs until the end of 2020
Maintenance reserve would be high enough to break even the costs except for the modernization measures in 2021
Demand-oriented maintenance planning (Bedarfsorientierte Planung):
Maintenance reserve covers the maintenance costs of all years, by budgeting the annual reserve with 400, €
Exceptional case because modernization planned in 2021 with estimated costs of 2,000, €

16. Maintenance Management Systems for Condominium Owners’ Associations
Prof. Dr. Andreas Saxinger
Miriam Hansel B.Sc.
Maintenance Management Systems for Condominium Owners’ Associations
Property number 31 (2004; 10,032 m²)
Peters’ formula (Peters´sche Formel)
II. Calculation Regulation (II. BV)
 2017
2018
2019
2020
2021
Opening balance
733, €
837, €
954, €
757, €
681, €
- calculated expenses
-43, €
-31, €
-344, €
-224, €
-15, €
+ maintenance reserve
147, €
Closing balance
813, €
2017
2018
2019
2020
2021
Opening balance
733, €
776, €
831, €
573, €
436, €
- calculated expenses
-43, €
-31, €
-344, €
-224, €
-15, €
+ maintenance reserve
86, €
Closing balance
507, €

17. Maintenance Management Systems for Condominium Owners’ Associations
Prof. Dr. Andreas Saxinger
Miriam Hansel B.Sc.
Maintenance Management Systems for Condominium Owners’ Associations
Property number 31 (2004; 10,032 m²)
Demand-oriented maintenance planning
2017
2018
2019
2020
2021
Opening balance
733, €
839, €
958, €
764, €
690, €
- calculated expenses
-43, €
-31, €
-344, €
-224, €
-15, €
+ maintenance reserve
150, €
Closing balance
824, €

18. Maintenance Management Systems for Condominium Owners’ Associations
Prof. Dr. Andreas Saxinger
Miriam Hansel B.Sc.
Maintenance Management Systems for Condominium Owners’ Associations
Property number 31 (2004; 10,032 m²)
- Results -
Peters‘ formula (Peters´sche Formel):
Annual maintenance reserve is sufficient to cover all maintenance measures
Construction costs were very high therefore the amount of the reserve at the end of 2021 is almost as high as at the beginning of 2017
The reserve calculated by the formula for new buildings turns out to be very high in comparison to the low maintenance costs
II. Calculation Regulation (II. BV):
Maintenance reserve covers all maintenance costs
It might be reasonably to assume that the maintenance charges per unit can be considered as too low in order to cover all maintenance costs without sufficient reserve at the beginning of 2017
Demand-oriented maintenance planning (Bedarfsorientierte Planung):
An annual maintenance payment of 150, € enables the implementation of the current and the preventive maintenance measures

19. Maintenance Management Systems for Condominium Owners’ Associations
Prof. Dr. Andreas Saxinger
Miriam Hansel B.Sc.
Maintenance Management Systems for Condominium Owners’ Associations
Conclusions
The pure application of the well-known, strict and short-term formulas does not fully meet actual needs. Dynamic elements are important for a better adaption to changing needs and strategic planning.
Proactive maintenance planning enables to reduce the financial burden for the owners and gradually less maintenance backlogs.
Extra special payments can be avoided and contingencies can be financed in advance.
Demand-oriented maintenance planning is based on long-term views and establishes a common basis for developing strategies and decisions making. In addition it can greatly enhance property values.

20. Thank you for your attention!
Prof. Dr. Andreas Saxinger
Nurtingen-Geislingen University Parkstraße 4 D Geislingen
Tel.: 0049 / 7331 / / -543
Miriam Hansel, B.Sc.
Nurtingen-Geislingen University Parkstraße 4 D Geislingen
Tel.: 0049 / 171 / 3255/ -876