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As an owner, you trust your property management company to manage your condominium reliably, keep your finances under control and ensure that all matters run smoothly. Managing a condominium owners' association (WEG) is a demanding and responsible task that requires professionalism, organizational talent and a high level of communication skills.
But what happens if the property management company itself resigns and terminates the management contract? For many owners, this is an unexpected and unsettling situation that raises numerous questions and uncertainties. In this comprehensive article, you will find out why a property management company can resign, what the legal and practical consequences are and how you as an owner can react in the best possible way and future-proof your community of owners.
When the property manager resigns
Most owners don't really get to grips with the role of the property management company until problems arise. The fact that a property manager resigns of their own accord is an unexpected step for many. There are many reasons for this, ranging from personal changes and economic considerations to conflicts within the community.
The consequences of a resignation can be serious, especially if it occurs at short notice and without warning. This makes it all the more important to be prepared and to know the legal and organizational framework conditions. This article provides you with a detailed guide on how to proceed as a condominium owner after a resignation, what options you have and how you can best prepare your condominium for the future.
Typical reasons for resignation by the property management company
The reasons why a property manager resigns from office are as varied as the condominium owners' associations themselves. Below you will find the most common reasons that can lead to a resignation:
1. retirement and personal changes
Many property management companies are run by individuals or small teams. When they reach retirement age or want to change careers, they often have to step down. Smaller condominium owners' associations are particularly affected by this, as there are often no successors to take over the company.
2. economic considerations
The demands placed on property management companies have increased significantly in recent years. Legal requirements, digitalization, increasing administrative costs and growing demands from owners mean that managing small or unprofitable condominium owners' associations is often no longer worthwhile. The result: the property management company terminates the contract and resigns in order to concentrate on larger or more lucrative mandates.
3. conflicts and disturbed relationship of trust
A common reason for resigning from office is ongoing conflicts between the property management company and the community of owners. These can arise from differences of opinion, a lack of communication, unclear responsibilities or even personal hostility. If the relationship of trust is permanently disturbed, the property management company often sees no other option than to resign.
4. unacceptable working conditions
If apartment owners make the work of the property management company more difficult - for example by failing to make payments, missing documents, constant complaints or even insults - this can significantly impair the work of the management company. In such cases, resigning from office is understandable from the property management company's point of view and is often legally permissible.
5. health or family reasons
Personal strokes of fate, illness or family obligations can also lead to a property manager no longer being able or willing to perform their duties. This can lead to a short-term resignation, especially in smaller property management companies without a large team.
6. excessive demands due to new legal requirements
The legal requirements for property management companies have increased continuously in recent years. New regulations, such as the introduction of mandatory certification for property managers, the digitalization of property management and stricter data protection requirements, pose major challenges for many property managers. Not every property management company is willing or able to take on this workload, which can ultimately lead to resignation from office.
Legal basis: What does the law say about resigning from office?
The legal framework surrounding the resignation of a property manager is complex and not always easy for laypersons to understand. In principle, the following applies: The manager can resign from office and terminate the management contract - however, certain conditions and deadlines must be observed.
The separation of order and contract
It is important to distinguish between the appointment of the property manager (i.e. the election by the owners) and the management contract under the law of obligations. The so-called separation theory states that the appointment and the contract are legally independent of each other. This means that resigning from the position of property manager does not automatically mean that the management contract also ends - and vice versa.
Ordinary termination of the management contract
As a rule, an ordinary notice period is agreed in the management contract, usually between three and six months to the end of the calendar year. The property management company can terminate the contract in compliance with this notice period and resign from office at the end of the notice period. In this case, the owners have sufficient time to look for a new management company.
Extraordinary termination for good cause
In certain cases, extraordinary termination of the management contract without notice is possible. Good cause exists if the property management company can no longer reasonably be expected to continue the contract until the end of the notice period. Examples of this are
- Massive disturbances in the relationship of trust
- Non-payment of fees by the owners
- Refusal to provide necessary powers of attorney or documents
- Insults, threats or assaults by owners
- Incitement to unlawful conduct
In such cases, the property manager can resign from office with immediate effect. The apartment owners are then faced with the challenge of finding a new property manager at short notice.
Form and receipt of resignation
The resignation must be declared to the WEG. This can be done in writing or verbally, for example at an owners' meeting. It is important that the declaration is brought to the attention of all owners. Individual notification to each owner is not necessary - minutes of the meeting or a circular letter are sufficient.
Compensation for unfavorable timing
If the property management company resigns at a particularly unfavorable time and the condominium suffers damage as a result, it may be liable for damages. This is the case, for example, if important deadlines are missed or payments can no longer be processed. However, case law places high demands on such a claim for damages - in particular, the COA must prove that the damage is actually attributable to the resignation.
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Procedure for resigning from office: What happens after the resignation?
The resignation of the property manager is initially a shock for many owners. This makes it all the more important to proceed in a structured and level-headed manner. Below you will find a step-by-step guide on how to proceed following a resignation:
1. informing the owners
The WEG must be informed promptly after the resignation. This can be done by means of a circular letter, an e-mail or a notice in the building. The aim is to keep all owners at the same level of information and avoid uncertainty.
2. convening an owners' meeting
An owners' meeting should be convened as soon as possible to discuss the next steps and pass the necessary resolutions. All questions relating to the succession plan, the handover of documents and the search for a new management can be clarified here.
3. transfer of documents and accounts
The property manager is obliged to hand over all documents, keys, contracts and accounts of the condominium in a complete and orderly manner. This should be done as promptly as possible and recorded to ensure a smooth transition.
4. appointment of a new WEG administration
The condominium owners must decide how to proceed: do they look for a new external property management company, organize the management themselves or rely on digital support? A new management company is appointed by resolution at the owners' meeting or by circulation procedure.
5. transitional arrangements
Until a new administrator is found, the COA can appoint a temporary administrator to take over the most important tasks. In exceptional cases, an emergency administrator can also be appointed by the court, for example if urgent payments are due or important deadlines need to be met.
Options after resigning from office: What options do owners have?
After resigning from office, condominium owners are faced with the decision of how the management of the condominium should be organized in the future. There are essentially three options:
1. appointment of a new external property management company
The classic way is to look for a new, professional property management company. The owners should obtain various offers, check references and carefully compare the conditions. It is important that the new management company matches the size and structure of the condominium and has sufficient experience.
Tips for choosing a new property management company:
- Make sure you have valid certification and adequate insurance.
- Check the experience with comparable properties.
- Clarify accessibility and communication channels.
- Value transparency in terms of costs and services.
- Ask for references and talk to other WEGs.
2. self-administration of the community of owners
Self-administration can be an attractive alternative, especially for smaller condominiums. In this case, the owners take on the tasks of administration themselves, for example by electing an internal administrator or an administrative advisory board. The advantages are obvious: lower costs, more transparency and direct influence on all decisions.
Requirements for self-administration:
- Sufficient time and commitment from the owners
- Basic knowledge of WEG law and accounting
- Willingness to take on responsibility
- Clear regulation of responsibilities and distribution of tasks
3. digital support from service providers
Modern service providers offer digital solutions that make self-administration easier and provide professional support. Here, owners can draw on expert knowledge, templates and digital tools to organize their administration efficiently and with legal certainty.
Advantages of digital support:
- Professional support for all administrative steps
- Digital document storage and communication
- Automated accounting and billing
- Support with legal and technical issues
4. interim solutions: Provisional administrator and emergency administrator
Until a permanent solution is found, owners can fall back on temporary solutions:
Provisional administrator
A provisional administrator is appointed by the community of owners to take on the most important tasks and maintain the administration. This can be a member of the WEG or an external person. The appointment is made by resolution and is limited in time.
Emergency administrators
In exceptional cases, the local court can appoint an emergency administrator upon application, for example if no other solution can be found and the ability of the homeowners' association to act is at risk. The emergency administrator takes over all the tasks of the administrators until a permanent solution is found.
The most important tasks after the resignation
After the resignation, there are numerous tasks that must be taken over by the owners or the provisional administrator. These include
- Management of joint accounts
- Collection of house charges and settlement of invoices
- Organization of repairs and maintenance measures
- Preparation of business plans and accounts
- Communication with service providers and authorities
- Preparation and implementation of owners' meetings
Especially during the transition period, it is important that all tasks are completed reliably in order to avoid financial and legal disadvantages for the community of owners.
Practical tips for owners after resigning from office
Resigning from office is a challenge, but also an opportunity to reorganize the management of the community of owners. Below you will find practical tips on how to successfully master this phase:
1. keep calm and act prudently
Even if the situation is worrying at first, keep calm and act prudently. Panic or rash decisions are rarely helpful.
2. ensure communication
Inform all apartment owners promptly and comprehensively about the situation. Clear communication creates trust and prevents misunderstandings.
3. distribute tasks
Divide the most important tasks among the condominium owners, such as managing the accounts, organizing the meeting or communicating with service providers.
4. obtain legal advice
You should seek legal advice, especially if you have complex questions or uncertainties. A specialist lawyer for condominium law can support you in clarifying liability issues, reviewing contracts and appointing a new administration.
5. obtain and compare offers
If you are looking for a new property management company, obtain several offers and compare them carefully. Pay attention not only to the price, but also to the services, experience and references.
6. document handover
Have the handover of all documents, keys and accounts confirmed in writing. This will help you avoid later disputes about missing documents or unclear responsibilities.
7. strive for long-term solutions
Take the opportunity to put the management of your community on a solid footing for the long term. Check whether the previous administration has met the requirements and what improvements are possible.
Challenges and opportunities: The WEG after the resignation
Resigning from office is undoubtedly a challenge for any community of owners. It forces the condominium owners to take a closer look at the organization and processes of the administration. But in every crisis there is also an opportunity: take the opportunity to modernize the management of your condominium, optimize processes and involve the community more closely.
Digitization and transparency
Digitization offers numerous opportunities to make administration more efficient and transparent. Digital platforms enable simple communication, centralized document storage and automated accounting. This allows all homeowners to maintain an overview and play an active role.
Strengthening the community
The phase following the resignation requires cooperation and commitment. Use this time to strengthen the community, distribute tasks and promote cooperation. A strong community is the best foundation for a successful administration.
Professionalization of the administration
Whether you opt for a new external administration, self-administration or digital support - take the opportunity to professionalize the administration of your community. Clear structures, transparent processes and open communication are the key to success.
Conclusion: resignation as an opportunity for a fresh start
The resignation of the condominium administrator is initially a shock for many condominium owners. However, with the right approach and good organization, the situation can be overcome - and even used to the benefit of the community. Whether you opt for a new external administration, self-administration or a digital solution: It is important that the interests of all owners are safeguarded and that the community remains capable of acting.
Take the opportunity to modernize the management of your condominium, optimize processes and strengthen the community. With commitment, transparency and open communication, you can lay the foundations for a successful future for your community of owners.
Do you already know Ralph?
Are you looking for a new condominium management company because your current management contract has been terminated following a resignation? Switching to Ralph means that your property is in competent hands. Simply send us a message to let us know that you are interested in a change - we will contact you immediately to discuss all the details surrounding the termination of your current management contract and a smooth transition.
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