Property Management

Property Management refers to the ongoing administration, maintenance, and organizational management of a property on behalf of the owner. It encompasses all measures that ensure the property retains its value and operates smoothly-from communicating with tenants and coordinating contractors to billing for operating costs. Property management is a core component of professional real estate management.

Scope of Property Management Services

Property management is divided into commercial, technical, and infrastructural tasks:

Commercial tasks:

• Rent collection and dunning for late payments
• Operating cost statements (annual heating cost statements, utility costs)
• Rent adjustments based on rent indices or index clauses
• Review and processing of insurance claims
• Lease agreement management and document maintenance

Technical tasks:

• Monitoring of statutory maintenance intervals (heating, elevator, fire protection systems, smoke detectors)
• Damage assessment and coordination of repair and maintenance measures
• Planning and supervision of renovation measures
• Energy consumption monitoring and optimization recommendations

Infrastructural tasks:

• Janitorial services and key management
• Cleaning of common areas (stairwells, outdoor facilities)
• Winter maintenance and landscaping
• Waste disposal management

The scope of services is defined in the management contract between the owner and the service provider. Reputable providers define services precisely and establish response times for emergencies.

Distinction: Property Management vs. Building Management

The term “property management” is often equated with “building management,” but the two are not identical. Building management for a condominium association (WEG) operates within the framework of the WEG Act, with decision-making authority resting with the owners’ meeting, whereas property management for a rental property is carried out directly on behalf of the individual owner.

For larger portfolios-e.g., multi-family buildings in Nuremberg neighborhoods-property management can also be organized by a dedicated property manager or a specialized service provider. For individual condominium units within a WEG, the WEG administrator manages the common property, while the unit owner is responsible for their own unit or hires a separate unit management service.

Costs of Property Management

The costs for professional property management typically range between 20 and 50 euros per residential unit per month, depending on the scope of services and the size of the property. For commercial properties or technically complex buildings, the costs can be significantly higher.

A portion of the management costs can be passed on to tenants as apportionable operating costs, provided this is agreed upon in the lease agreement. In particular, the costs for janitorial services, building cleaning, and landscaping are apportionable under the Operating Costs Ordinance (BetrKV). Administrative costs in the narrower sense (bookkeeping, dunning) cannot, however, be passed on to the tenant.

Legal Obligations of the Owner

Regardless of whether an external property management service has been hired, the owner remains responsible for complying with all legal obligations. The most important obligations include:

• Duty to ensure public safety: Protecting tenants and visitors from harm caused by defective building components (e.g., loose roof tiles, icy sidewalks)
• Maintenance obligations: Regular inspection and maintenance of heating systems, elevators, and fire safety equipment
• Smoke detectors: In Bavaria, smoke detectors are mandatory in bedrooms, children’s rooms, and hallways - retrofitting and maintenance are the owner’s responsibility
• Energy performance certificate requirement: A valid energy performance certificate must be presented when renting out a new property or selling it

Professional property management ensures that all these obligations are systematically fulfilled and documented.

Practical Tip for Owners in Nuremberg and Franconia

Many owners in Nuremberg and the metropolitan region initially manage their rental properties themselves-and underestimate the time required. At the latest when there are two to three tenants or if the owner lives far away, it’s worth considering professional property management. The cost of external management is generally tax-deductible as business expenses and quickly pays for itself in terms of the time saved.

We recommend clearly defining the scope of services and compensation in the management contract-including a provision for emergencies outside of business hours. At least once a year, you should verify that all legal maintenance obligations (heating, smoke detectors, fire extinguishers, elevator) are being met. A structured handover report when tenants change and proper documentation help prevent future disputes.

Frequently Asked Questions

Who is responsible for property management in a homeowners’ association?

In a condominium association (WEG), the appointed WEG manager handles property management for the common areas. Each owner is personally responsible for their own unit (their own apartment) or may hire their own manager. Management of individual units and WEG management can be handled by the same provider but must be legally separated.

Can I deduct property management costs from my taxes?

For rented properties, management costs are deductible as income-related expenses against rental income. For owner-occupied properties, portions of the management costs (household-related services under Section 35a of the German Income Tax Act) can be claimed for tax purposes-up to 20% of a maximum of 20,000 euros in expenses, meaning up to 4,000 euros in tax relief annually.

How do I find a reputable property manager in Nuremberg?

Look for certification (e.g., membership in the VDIV-Association of Real Estate Managers-or IVD), transparent contract terms, verifiable proof of services rendered, and clear billing structures. References and recommendations from other property owners are also valuable. Upon request, we can connect you with suitable partners from our network in the Nuremberg region whom we know from years of collaboration.

What should a good management contract cover at a minimum?

A solid property management contract should clearly define the following points: the exact scope of services (commercial, technical, infrastructural), the monthly fee, and any additional fees for unscheduled services (e.g., coordination of major renovations), response times in emergencies (recommended: max. 2 hours), the authority to independently award repair contracts up to a defined amount (typically: 500-1,500 euros), as well as provisions regarding the contract term and notice period. In the Nuremberg metropolitan region, a minimum term of twelve months with a three-month notice period is standard in the market. We recommend having the contract reviewed by a specialist attorney for tenancy and condominium law before signing.

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