Management fee

Management Fee - The management fee is the compensation that a property management company receives for managing a property or a condominium association (WEG). It is calculated as a monthly amount per residential unit or as a percentage of rental income. The amount varies depending on the region, property size, scope of services, and administrative costs. In a WEG, the management fee is allocated to all owners via the maintenance fee.

Typical Fee Amounts

Management fees in Germany vary significantly depending on the type of management and the property:

HOA Management - approx. 20-35 euros per unit per month for standard services (convening and conducting the owners’ meeting, annual financial statement, budget plan, day-to-day management, maintenance fee accounting). For small WEGs (fewer than ten units), the fee is often 30-45 euros per unit, as the basic costs-one meeting per year, one annual statement-are incurred regardless of the number of units.

Rental Management (Condominium Management) - approx. 25-40 euros per unit per month or 5-8 percent of the net base rent. Services typically included are: tenant support, preparation of utility bills, rent collection (dunning), coordination of maintenance measures, and ongoing communication with the owner.

In addition, many property managers charge special fees for services not included in the base price: change of ownership (150-300 euros per transaction), dunning procedures (10-25 euros per reminder), extraordinary owners’ meetings (200-500 euros), and construction supervision during renovations (3-5 percent of the construction cost).

Value for Money and Contract Analysis

The lowest management fee is not automatically the best choice. What matters is the value for money-and this can only be assessed through a detailed comparison of the service specifications. Review the management contract for the following points:

What services are included in the base fee? How many owners’ meetings per year are included (standard: one regular meeting)? Is the annual property inspection included in the price? How are renovation measures billed-does the manager handle the bidding process and construction supervision, and what is the additional cost? What response times have been agreed upon (availability in emergencies)?

A detailed list of services in the contract protects against unpleasant surprises. Have the manager explain all items for which additional fees may apply, and estimate their frequency and cost-this will give you the actual total price of the management service.

WEG Management Fee and Tax Treatment

The WEG management fee is apportionable as operating costs under Section 2(1) of the Operating Costs Ordinance (BetrKV)-but only to the extent that it relates to the management of the common property. Costs associated with rental management (management of individual units), on the other hand, are not apportionable.

For owners who rent out their properties, management fees are fully deductible as business expenses against income from renting and leasing (Section 21 of the Income Tax Act) - both the WEG allocation and the costs of their own rental manager. This also applies to special fees and one-time costs such as change-of-ownership fees, provided they are related to the rented unit.

Market Development and Certification Requirement

Since the 2020 WEG reform and the certification requirement (IHK exam) for WEG property managers, which has been in effect since 2023, management fees have risen in many regions. Small and medium-sized management companies that were unable or unwilling to meet the requirements have withdrawn from the market-leading to a supply shortage amid rising demand. Nuremberg has been particularly affected by this trend.

At the same time, the demands on property managers are increasing: energy-efficiency renovation measures under the GEG, EV charging infrastructure in underground garages, and the digitization of maintenance fee billing-the administrative burden per unit has risen significantly in recent years.

Practical Tip for Owners in Nuremberg

We recommend that condominium owners in the Nuremberg metropolitan area consider not only price but also availability, response time, and local presence when selecting a property manager. In Nuremberg, the standard market rate for condominium management fees is 22 to 32 euros per unit per month. Managers who charge significantly less often cut corners on service, availability, or staffing.

Before hiring, obtain at least three comparative quotes and contact the manager’s reference condominium associations directly-not just those named by the manager, but also others you find through your own research, if possible. Since the 2020 WEG reform, the management contract can be concluded for a maximum term of five years (three years for the initial contract)-after which termination by a simple majority is possible at any time. Use contract expirations as an opportunity to reassess the market.

Frequently Asked Questions

Is the property manager’s fee apportionable to the tenant?

The WEG property manager’s fee is apportionable as operating costs (Section 2 No. 1 BetrKV)-but only to the extent that it relates to the management of the common property. It is included in the utility bill via the building maintenance fee. Costs of rental management (the landlord’s management of the individual unit) are, however, not passable on-they are the landlord’s costs and reduce their tax burden as business expenses.

Can I change the property manager?

Yes. Since the 2020 WEG reform, the property manager can be dismissed at any time by a simple majority vote of the owners’ meeting-a valid reason is no longer required. The management contract ends no later than six months after the dismissal. Changing managers requires organizational lead time: handover of documents (minutes, accounts, key management), account transfer, and notification of all service providers. Plan for at least three months’ lead time.

What additional costs may arise?

Typical additional costs beyond the base fee: Change of ownership 150-300 euros per transaction. Extraordinary owners’ meeting 200-500 euros. Dunning process 10-25 euros per reminder. Construction supervision for major renovations 3-5 percent of the construction cost. Initial registration of a new property (setup fee): 500-2,000 euros. Negotiate these items before signing the contract-and set upper limits for the additional fees in the contract.

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