The declaration of division/community rules can no longer be amended at the developer’s unfettered discretion once third-party rights have been entered in the land register, in particular financing land charges of the purchasers or their priority notices of conveyance. As from that point in time, amendments are, as a rule, subject to consent.
At the same time, there is a great practical need for later adjustments to the declaration of division/community rules.
The (supposed) solution lies in granting a power of amendment in favor of the developer. In relation to the land registry office (legal “can”), the power of attorney should be granted without restriction. This means that the land registry office only has to check for any obvious cases of abuse. In relation to the buyers (legal “may”), the power of attorney must be restricted to avoid arbitrariness and abuse. Powers of attorney that are unlimited in content and time are, in any case, invalid under general terms and conditions law when dealing with consumers.
The Federal Court of Justice has now once again emphasized in its ruling of January 23, 2026, Case No. V ZR 91/25, that such a power of amendment must be limited to compelling reasons. These compelling reasons must be specified in the relevant power of attorney clause, and the requirements must be formulated sufficiently clearly for the buyer. It is not sufficient to provide a general limitation to compelling reasons and to add a “negative catalog” of what the exercise of the power of attorney must not lead to.
In its ruling, the Federal Court of Justice also provides a “guideline”: Compelling reasons can be the fulfillment of official requirements, securing development, rectifying planning defects, or fulfilling special requests. These reasons must, of course, actually exist when the power of attorney is exercised.
If the invalidity of the power of attorney clause results in a blockade of consent for necessary amendments, this can have a massively damaging effect on the project. The advice must therefore be: Invest as much care as possible from the outset, both in drafting the declaration of division/community rules itself and in formulating the power of amendment.
