Definition: What exactly is property management?Link to this section
A property management company manages real estate. This includes residential buildings and residential complexes with rental apartments and condominiums, as well as commercial properties. The responsibilities of a property management company encompass commercial, technical, and operational areas – such as organizing owners' meetings and implementing resolutions. More on this later in the article. Property management is managed either by a single person, i.e., a condominium manager, or by a team.
Types of property management companies and their specific tasks
The duties and responsibilities of a property management company vary depending on the type of property and the individual needs of the owners. As a homeowners association, you should therefore familiarize yourself in advance with the different types of property management and select a property management company that will optimally manage your property and represent your interests. Here is a brief overview of the duties and responsibilities of each type of management company.
WEG administration:The primary responsibility of a condominium association (WEG) is to manage the common property. The property manager organizes owners' meetings, prepares utility bills, commissions tradespeople for maintenance work, and ensures compliance with the house rules.Rental managementRental management focuses on renting apartments and houses on behalf of landlords. The management contract includes the following: The property manager finds suitable tenants, concludes rental agreements, manages rent payments, and takes care of the maintenance of the rental properties.Special property management: Property management combines elements of condominium and rental management. Property management manages both the shared property of a condominium and the individual apartments that are rented out.Commercial property management: The property management takes care of the leasing of commercial space, the billing of operating costs and compliance with tenancy law regulations.
The most important tasks of all property management companiesLink to this section
A professional property management company handles a wide range of tasks for property owners and homeowners' associations. The administrative tasks of property managers can be divided into three main areas:
Commercial administration:First, there are administrative tasks for the property management, such as preparing operating cost statements, annual financial statements, and business plans. Commercial management protects the owners' financial interests. Transparent and comprehensible accounting ensures that all costs are allocated correctly. Furthermore, the property manager ensures that owners are regularly informed about the property's financial situation.Technical Administration:The property manager will undertake regular inspections and maintenance of the property, commissioning tradespeople as needed, and thus ensuring the value and longevity of your property. Preventative measures and efficient management of maintenance costs can help you avoid unnecessary costs.Legal tasks:The legal aspects of property management extend far beyond simply managing rental income. Property management is responsible for ensuring compliance with rental agreements, tenant protection laws, and condominium laws. They act as an interface between owners, tenants, and authorities, thus contributing to the smooth handling of all legal matters relating to the property.
Below we explain the three areas of responsibility in detail:
Commercial tasks of property management
The property manager is responsible for the financial management of rental properties, residential complexes, and condominiums. Their duties and responsibilities include:
Preparation of utility billsCollection of maintenance fees and rent paymentsAccounting and auditingAnnual accounts and economic planningOrganization of owners' meetingsIf necessary, collection and administration of rent from tenants (in the case of rental management)
Rental management: An important task of property management companies
In addition to managing condominiums, many property management companies also handle rental management. They take care of the leasing of rental apartments and apartment buildings. Rental management tasks include:
Searching and selecting tenantsPreparation and management of rental agreementsCarrying out apartment handoversCollection of rent paymentsHandling tenant changes
What does property management mean for tenants?
The duties and responsibilities of property management also play an important role for tenants. Professional property management ensures the smooth handling of all tenancy-related matters.
Contact person:The property management is the first point of contact for all questions concerning the rental apartment in your apartment building.Maintenance:The property management ensures the maintenance of the rental apartments and corrects any defects as quickly as possible.Protection of rights:The property management company advocates for the rights of tenants.
What's included in the price at Ralph:
Ensuring timely, complete and proper accountingConsistent and regular reminders for maintenance paymentsPayment reminder from a property owner to fulfill his duties and obligationsPreparation of the certificate § 35 a EStG Household-related servicesCollection of maintenance fees, special levies and billing resultsExecution of all payment transactionsAnnual liquidity planning for the entire communitySeparate accounting of economic sub-communitiesPreparation of operating cost statements for rented common propertyReview of annual accounts from the previous administrator to the management takeover (on request)Collection and billing of special leviesProcessing of VAT-optimized objectsPreparation of separate invoices for third parties (tax consultants)
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Technical tasks of property management
In addition to commercial tasks, a property management company also assumes responsibility for the technical support of the residential building or complex. The following tasks and responsibilities are part of the manager's duties:
Assessment of the building condition before renovation workPlanning and coordination of construction projectsControl and monitoring of construction progressMaintenance and repair of technical equipment such as elevators or electric gatesRegular inspection of the technical systems in the house
What's included in the price at Ralph:
Establish a long-term maintenance planObtaining offersRegular site inspections with technical expertsEmergency service is available (provided by the specialist company responsible for the property, announced via building noticeboard). Every property manager is available in case of emergency.Monitoring / billing of maintenance work within the scope of the approved order amountSupport for construction work (plus administration fee, depending on the extent of the work)Processing of insurance claims (reporting to the insurance company, inspection with experts, commissioning, inspection, acceptance of tradesmen's services, settlement with the insurance company)
Legal tasks of property management
To properly manage a residential building, a property manager requires sound legal knowledge. Numerous legal pitfalls must be considered, especially when managing a homeowners' association. Knowledge of the German Condominium Act (WEG) is crucial. The legal responsibilities of a property manager include representing owners vis-à-vis third parties, ensuring compliance with legal requirements, and negotiating, concluding, and reviewing contracts.
However, the property management company doesn't always handle all tasks itself. Rather, it is responsible for organizing and coordinating the various activities. If specialized expertise is required, for example, for complex construction projects, the property management company can, by resolution of the owners' association, commission external experts such as architects, caretakers, or specialist companies.
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Common property vs. separate property: Key concepts for owners and property managersLink to this section
For you as an owner, it's also important to understand the difference between common property and separate property. This distinction has far-reaching implications for the responsibilities and obligations of all involved.
Community ownership: shared responsibility
Common property includes all parts of a building that are jointly owned by all owners. These typically include:
StairwellsElevatorsroofsCommunal gardens or outdoor areas
The management of the common property falls within the responsibilities of the condominium administrator. They coordinate maintenance measures, organize owners' meetings, and implement the decisions of the condominium association.
Private property: Individual responsibility
In contrast, special property refers to self-contained units with a residential purpose, such as individual apartments. The following special features apply to special property:
The owner has the sole right of use and disposal.The management can be carried out by the owner himself or outsourced to third parties as a service.Special property management companies take care of these individual units specifically.
Understanding this distinction is fundamental to effective property management and harmonious coexistence in residential complexes. Owners should understand their responsibilities and obligations with respect to both forms of ownership to avoid conflicts and ensure smooth management.
Property management tasks: 3 important tasks in focusLink to this section
The main tasks of a property management company include the following services:
Accounting and business plan
The responsibilities of property management companies include not only monitoring incoming payments from owners, but also checking, paying, and accurately recording expenses. All disbursements must be stored in an unalterable manner and documented by a detailed invoice. A standard cash flow statement is usually sufficient to provide an overview of receipts and withdrawals.
Before the start of each year, the property management company prepares a budget that forecasts the expected payments for the coming year and estimates the anticipated maintenance fee payments. Based on contracts and experience from previous years, the required funds are calculated and allocated to the individual owners in accordance with the declaration of division and the agreed allocation schedule.
After the end of the fiscal year, the final settlement is based on actual invoices and payments. Any discrepancies between the budget and the settlement are settled through a corresponding additional payment. If more money has been paid in than budgeted in the budget, the money can be added to the reserve or paid out to the owners.
Maintenance and renovation
Another important area of property management is the technical tasks related to the property being managed. It's important to note that property management does not automatically include a concierge service. While some property managers do offer a concierge service, since it's not part of the typical management tasks, it's usually billed separately.
The actual task of a property management company is to determine the need for repairs and maintenance measures, commission them, and monitor them. To do this, the property management company must regularly inspect the condition of the property, paying particular attention to hidden damage or future problems. Should a problem arise with the property, it is the property management company's responsibility to find a suitable tradesman and commission him to repair the property. For major renovations, the project is put out to tender to determine the best offer with the optimal price-performance ratio. However, it is important to note that repairs that must be carried out quickly must be distinguished from renovation, modernization, or renovation measures, which require longer preparation.
A forward-looking property management company also creates a long-term renovation plan that lists measures that must be implemented regularly. These plans also form the basis for calculating the condominium association's reserves.
Owners' meeting
The annual owners' meeting is an important part of property management and must be held annually. All owners of the community are represented at this meeting and, by resolution, also appoint the management. If a manager has already been appointed, this manager will also ensure that the owners' meeting is convened on time in subsequent years.
During the meeting, the property management is responsible for taking the minutes and ensuring the smooth running of the meeting. However, the property management does not have voting rights in resolutions; instead, it is solely responsible for recording the resolutions and voting ratios. Any major renovation, modernization, or refurbishment project to the building must be presented at the annual meeting and approved by a majority of the owners. Once a resolution has been passed, the management must implement it.
Conclusion Property Management TasksLink to this section
The condominium association (WEG) administration is responsible for the management of buildings where several owners jointly own a residential property, as defined by German condominium law. The condominium association administration handles the technical, financial, and commercial support of the condominium association, as well as the creation and enforcement of house rules, with the Condominium Association Act forming the basis for proper management.
The property manager of the condominium association is appointed by a majority vote of the owners' meeting and assumes tasks such as monitoring and collecting maintenance payments, as well as preparing a budget and annual financial statements. The condominium association management is also responsible for assessing needs, commissioning, and supervising repair and renovation measures. The management may offer a caretaker service as an additional service, but this is not a mandatory requirement.
Why you need good property management
As the owner of a property or condominium, you can benefit from the services of a property management company.
Relief:You will be relieved of the daily management of your property.Expertise:A property management company has extensive expertise in the field of real estateCost optimization:Through targeted measures, a property management company can reduce your operating costs.Legal certainty:A property management company knows the relevant laws and regulations and protects your rights.
Whether you own a rental property, a condominium, or a commercial property, a property management company can handle numerous tasks for you. We're happy to be at your side.
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