Appointment of an Administrator

Appointment of a Property Manager - The appointment of a property manager is a resolution passed by a homeowners’ association meeting to appoint a property manager under the Condominium Act (WEG) to manage the common property. It forms the basis for the proper management of a homeowners’ association and is governed by the Condominium Act (WEG).

Procedure and Legal Basis

The appointment of the property manager is made by resolution of the owners’ meeting with a simple majority of the votes cast. Every condominium owner has the right to propose candidates. In practice, quotes from several professional property management firms are often obtained and compared at the meeting before a vote is taken.

Since the 2020 WEG Reform (which took effect on December 1, 2020), condominium owners have the right to appoint a certified property manager. Certification is granted through an examination administered by the Chamber of Industry and Commerce (IHK) and demonstrates that the manager possesses the necessary legal, commercial, and technical knowledge. Since December 1, 2023, any individual owner may demand that a certified manager be appointed-even against the will of the majority. A non-certified property manager may still be appointed if all owners agree (unanimously).

The term of the appointment is limited by law: For the initial appointment of a property manager, the term may not exceed three years; for reappointments, a maximum of five years is permitted. This restriction protects owners from being bound for too long to a property manager whose performance proves to be inadequate.

Appointment Resolution and Management Agreement

It is important to distinguish between the appointment resolution and the management agreement. The appointment resolution establishes the organizational relationship and grants the manager the authority to act on behalf of the community. It is a resolution passed by the owners’ meeting. The management contract, on the other hand, governs the contractual relationships-remuneration, scope of services, and liability issues. Both legal acts are independent of one another and must be decided upon separately.

In practice, the management contract is often voted on together with the resolution of appointment at the owners’ meeting. It is advisable to send the management contract to all owners prior to the meeting so that they are aware of the scope of the services to be provided and the compensation. A management contract without a corresponding resolution of appointment, or vice versa, is legally problematic and should be avoided.

Dismissal and Duties of the Manager

The dismissal of the property manager may be decided at any time by the owners’ meeting with a simple majority. Since the WEG reform, a valid reason is no longer required for this-meaning the owners do not have to justify their decision. In this case, the property management contract ends no later than six months after the dismissal, unless a shorter period has been agreed upon.

The administrator’s key duties include: convening and conducting the owners’ meeting, preparing the budget, preparing the annual financial statement, managing the common funds (maintenance reserve, maintenance fee accounts), enforcing the house rules, and commissioning necessary maintenance measures. Since the WEG reform, the property manager has also had expanded powers for measures of minor importance, which he may carry out without a separate resolution by the owners’ meeting (Section 27(1)(1) WEG).

The property manager is subject to a strict duty of loyalty to the community: He may not enter into conflicts of interest, accept commissions from contractors, and must strictly separate community funds from his own assets. Violations can lead to liability for damages and dismissal.

Practical Tip for Nuremberg and the Metropolitan Region

The market for WEG property management in Nuremberg and the metropolitan region is tight. Many management firms are no longer accepting new properties, and smaller communities with fewer than ten units, in particular, are having difficulty finding a property manager. We recommend that homeowners’ associations begin the search for a new manager or negotiations with the current one well in advance-at least six months before the existing contract expires.

In the Nuremberg metropolitan region, management fees for homeowners’ associations range between 25 and 40 euros per unit per month, depending on the size of the property and the scope of services. When making a selection, owners should consider not only the price but also IHK certification, local experience, verifiable references from comparable properties, and adequate professional liability insurance. We assist owners in assessing whether management services and fees are in line with market standards and, upon request, support the bidding process and selection.

Frequently Asked Questions About Appointing a Property Manager

Can a condominium association exist without a property manager?

In principle, yes; there is no legal obligation to appoint a property manager. However, every individual owner has the right to demand that a property manager be appointed and can enforce this in court if necessary. In practice, management without a professional property manager is only feasible for very small communities with two or three units, provided the owners agree to share the responsibilities. For communities with five or more units, we generally recommend professional management.

What happens if the owners’ meeting fails to appoint a property manager?

If no resolution is reached, any owner may apply to the local court for the appointment of a property manager by way of a preliminary injunction or through an action to replace a resolution (Section 44(1) WEG). The court will then appoint a property manager if proper management so requires. The costs of the proceedings are generally borne by the community. In Nuremberg, the Nuremberg Local Court has jurisdiction.

What should you look for when selecting a property manager?

Key factors include Chamber of Industry and Commerce (IHK) certification (mandatory upon request starting in 2023), adequate financial loss liability insurance (minimum coverage of 1 million euros), experience with comparable properties in the region, and transparent contract terms. We recommend obtaining at least three quotes and carefully comparing the service specifications-the base price often does not cover all activities, and special services (change of ownership, extraordinary meetings, construction supervision) are billed separately.

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