How to Create an Operating Project (Budget) in Apartment and Site Management:

According to Article 20 of the Condominium Law (KMK), ensuring sustainability in the use and management of a main property is one of the most fundamental responsibilities. The foundation of orderly and transparent management relies on a properly prepared operating project (budget).

How do you prepare an operating project that prevents disputes among flat owners and residents while fully complying with legal regulations? Here is a guide-style article that you can directly publish on your website or blog:

1. Preparation and Analysis of Existing Data

Before starting the project, past financial data and the physical needs of the building should be thoroughly reviewed.

Past Year Expenses: Review electricity, water, cleaning, elevator maintenance, and personnel costs incurred over the last 1–2 years.
Inflation and Price Increases: Factor in upcoming minimum wage increases, updates to maintenance contracts, and general market price hikes.
Fixture and Maintenance Needs: Anticipate extraordinary expenses in advance, such as roof insulation, exterior painting, elevator overhauls, or fire system maintenance.

2. Determining Expense Items

Expense items form the backbone of an operating project. The more transparent and detailed these items are, the higher the trust of the flat owners. The main expense headings include:

Personnel Expenses: Salaries, social security (SGK), severance pay provisions, and meal expenses for doormen, security guards, or cleaning staff.
Maintenance and Repair Expenses: Periodic elevator maintenance, booster pump repairs, landscaping, and common area fixture repairs.
Energy and Consumption: Common area lighting electricity bills, water bills, and central heating/fuel expenses, if applicable.
Administrative and Service Expenses: Professional management fees, accounting expenses, notary fees, stationery, and postal costs.

3. Distribution of Expenses (Condominium Law Article 20)

The most critical stage of the operating project is distributing costs to flat owners in compliance with the law. According to the Condominium Law, expense allocations are based on these principles:

Equal Distribution: Expenses for doormen, heating operators, watchmen, and gardeners, as well as general management expenses, are divided equally unless decided otherwise.
Distribution Based on Land Shares: Premiums for property insurance and expenses for the repair and strengthening of common areas are distributed in proportion to the land shares of the flat owners.
Distribution Based on Consumption: Expenses such as heating (central heating heat cost allocators) and hot/cold water are reflected according to actual consumption amounts.

4. Drafting and Serving the Project

Once all calculations are completed, the project is formalized into an official document. The project must include the following details:

Management period (e.g., January 1 - December 31)
Total estimated budget amount
Monthly advance payment (dues) amount per independent section
Payment deadlines and bank account information

This prepared project is served to the flat owners or those effectively utilizing the independent sections (tenants) via signature, registered mail, or e-mail. If no objection is made to the project within 7 days from the date of service, the operating project becomes finalized and forms the legal basis for enforcement proceedings.

Conclusion

Preparing a professional and transparent operating project minimizes delays in collection of dues and reinforces trust between flat owners and management. To save time on complex calculations and avoid legal risks, you can leverage modern apartment and site management software tools.