The property management company is responsible for various tasks that arise within a homeowners' association on behalf of the owners. In this article, we answer the most important questions about the services provided by a homeowners' association management company. What are the management tasks and types of property management? How much does property management cost? What rights and responsibilities do homeowners' association managers have? We'll tell you all about them.
Definition: What is property management?Link to this section
Property management is an important component of the real estate industry, as it assumes the care, representation, and organization of residential and commercial properties in the interests of the owners or landlords. Here, a distinction is again made between condominium management, Rental management or commercial property management. Property management essentially ensures that properties are efficiently managed, maintained, and administered.
What are the responsibilities of a property manager?Link to this section
The Tasks of a property management company , especially for the Homeowners association (WEG) , are diverse and through the WEG Act clearly defined. According to Section 27, Paragraphs 1 and 2 of the German Condominium Act (WEG), the duties of a property management company include, in particular:
Correspondence with the apartment ownersAdministration of the WEG account and thus WEG assetsProper accounting of all income and expensesInclusion of the House money from the ownersControl and processing of payment transactions as well as dunning forLate payment of house moneyCreation of the Year-end statement in the form of overall and individual statements for all ownersDevelopment of the annual economic plan Preparation, convening and conduct of Owners' meetings Representation of the owners vis-à-vis third partiesNegotiation and conclusion of contracts (insurance, utilities, janitorial services)Monitoring and enforcement of House rules Handling complaints and violations of the house rulesMonitoring compliance with legal requirementsInitiation of maintenance and repair measures
... and many other tasks
The aforementioned tasks of property management represent only a portion of the management tasks. Depending on the individual agreement and the needs of the condominium association, additional specific services may be added and included in the management contract. Depending on the type of property management, the tasks may differ further. For example, a rental management company performs different tasks than a property manager.
Fundamentally, however, our list of tasks shows you how comprehensive the responsibilities of property management can be. The goal is always to preserve and increase the value of the managed properties and to ensure comprehensive representation of the interests of all owners.
New WEG law fundamentally changes the administration of WEGsLink to this section
The reform of the German condominium association (WEG), which came into effect in December 2020, has changed the management of real estate, especially shared property. Since then, responsibility for management has been entirely with the condominium association (WEG), which has increased, among other things, the duties and responsibilities of property managers and the liability risk.
We have summarized the new rules and changes for you:
Simple majority:Structural changes and modernizations can now be decided by a simple majority at the owners' meeting.Quorum:The owners' meeting always has a quorum, regardless of the number of condominium owners present. This prevents owners' meetings from being blocked due to insufficient participation.Virtual participation:It is now possible for owners to participate in the meeting virtually, which may increase willingness to participate.Right to structural changes:Every owner of the building has the right to request certain structural changes, such as measures for accessibility, e-mobility, burglary protection or fast internet access.Representation of the Community:The administration is now the unlimited representative of the WEG vis-à-vis third parties.Independent decisions:The administrator can decide on certain measures, such as repairs and minor purchases, on his/her own responsibility without having to obtain a resolution from the owners' meeting beforehand.Dismissal:The administrator can be removed more easily and without giving reasons. The management contract ends no later than six months after the removal.
Property management vs. caretaker: What's the difference?Link to this section
Property managers and caretakers assume two distinct roles that are often confused. Although both parties are responsible for the smooth running of a condominium complex, their duties and responsibilities differ significantly.
Craft activities:Caretakers are responsible for the maintenance and repair of the building, as well as the upkeep of the outdoor areas. Their duties include cleaning the stairwell, common areas, and outdoor areas; winter maintenance (i.e., clearing snow and gritting paths); carrying out minor repairs in and around the property; and maintaining green spaces, flowerbeds, and trees.No administrative tasks:Caretakers are generally not responsible for administrative or financial tasks.
However, both parties often work closely together. The property manager can assign specific tasks to the caretaker or assist them in fulfilling them. The caretaker, in turn, informs the property management about necessary repairs or other incidents in the building.
Practical examples:
The property manager instructs the caretaker to carry out repairs in the stairwell.The caretaker informs the property manager about a burst water pipe in the basement.The property manager organizes the repair of the burst water pipe and, if necessary, hires a specialist.
Property management vs. condominium management: What's the difference?Link to this section
In a homeowners association there are two types of property: special property and joint property Separate property refers to individual, rented apartments and certain components contained therein. These apartments belong to a single owner who rents them out. The separate property management takes care of these rented units, while the condominium association management is responsible for the common property, such as the stairwell, garden, or roof.
In order to clarify which parts of the building and property belong to the common property or to the private property, the Declaration of division as the authoritative document. This defines in detail which areas fall under the jurisdiction of the common property and which are therefore considered separate property.
Property management vs. rental management: What's the difference?Link to this section
As a property owner and landlord, it is equally important to understand the difference between property management and rental management, as these two types of property management cover different areas of responsibility for the rental property.
Rental management focuses on managing individual rented apartments and the relationship between landlord and tenant. Key responsibilities include:
Search and selection of tenantsLease contract conclusion and managementRent collection and monitoring of rent paymentsCommunication with tenantsMaintenance and repair of rented units Billing of additional costs the rental apartmentTermination management
The main differences between rental managers and condominium managers are based on the following aspects:
focus: Rental management focuses on individual condominiums, while property management manages entire residential complexes and the common propertyClient: Rental management works for individual landlords, while property management works on behalf of all ownersLegal basis: The tasks of rental management are based on individual contracts. The tasks of condominium management are based on the Condominium Act and the management contract.engagement: The appointment of a rental management is voluntary and can relieve you as a landlord of a lot of work, while a WEG management can be mandatory if a property owner requests it
As a property owner, you should decide what type of management you need for your condominium based on your situation. If you rent out a single apartment, rental management may be sufficient. However, if you own an apartment in a homeowners association, property management is usually necessary to manage the entire shared property.
Important: In condominium associations (WEG), the appointment of a property manager may be mandatory if a co-owner requests it.
What are the costs for property management?Link to this section
Property management costs can vary and depend on various factors. It's therefore difficult to make a blanket statement about management costs. However, there are some guidelines and factors that play a role in determining pricing.
For larger apartment buildings with many residential units, the average cost for professional property management is approximately €30 to €40 per month per unit. However, for smaller communities or two- to three-family houses, the cost per unit can be significantly higher. This is because the administrative burden remains relatively constant regardless of the number of units and is therefore spread across fewer shoulders in smaller units.
Administrative costs are influenced by factors including:
Location of the house:In urban areas and sought-after residential areas, property management fees are often higher than in rural areas.Age and condition of the building:Older buildings in need of renovation or with complex structural structures generally require more administrative effort and thus lead to higher costs.Number of units to be managed:The more residential units a condominium manager manages, the lower the management costs per unit are.Type of administration:Whether the management involves condominium association (WEG) or rental management also impacts the costs. Condominium association (WEG) management is often more complex and time-consuming than rental management.Scope of agreed services:The more services the property management company provides, the higher the costs.In the case of a conflict-ridden homeowners association:If disputes arise frequently among owners, this can significantly increase the administrative burden and thus drive up costs.Price differences between urban and rural areas:In urban areas, property management fees are often higher than in rural areas due to higher demand and higher personnel costs.Local market conditions and competitive situation:In regions with many property management companies, there is greater competition, which can have a positive effect on prices.
Some property management companies also offer percentage-based compensation models based on the annual gross rental income. This can simplify cost planning for owners, as the costs are directly linked to rental income.
Please contact Ralph for more information about our Property management costs
Future prospects: Digital property management as a modern solution for condominiumsLink to this section
In our opinion, the concept of a digital property management THE groundbreaking answer to the challenges of condominiums of the future. At Ralph, a digital property management company from Berlin, we achieve this by focusing on efficiency, transparency, and user-friendliness. Digital property management companies like Ralph offer both for our certified administrators as well as for you as owners and tenants numerous advantages and is a decisive step towards modern and sustainable condominium management.
What is digital property management?
At its core, digital property management is based on a system that combines all aspects of condominium management on a central, digital platform. This online platform enables a variety of functions that simplify the daily lives of managers, owners, and tenants, as follows:
Online access to important documents:Whether house rules or billing statements – all relevant documents can be viewed online anytime and from anywhere.Digital management of defect reports:Defects can be reported quickly and easily via the platform, which shortens processing times.Automated data and document management:The platform takes care of organizing and storing owner data, saving time and reducing the error rate.
Advantages of digital WEG management
The advantages of digital property management are manifold and have a positive impact on the care and management of residential complexes:
Accessibility and transparent services:Information is accessible 24/7 and from any location, increasing communication and transparency between managers and owners.Increased efficiency:Automated processes accelerate procedures and minimize manual errors in the management of the WEG propertyCost savings:By reducing printing, postage and archiving costs, significant savings can be achieved in property managementTransparency:All processes and documents are clear and understandable, which strengthens trust in the administration.Environmental friendliness:The reduced paper consumption through digital document management contributes to environmental protection.Accelerated communication:The direct and fast interaction between property managers and apartment owners ensures smooth processes and services
Do you already know Ralph?
Ralph is your modern, digital property management company from Berlin. At Ralph, we take care of all aspects of your property, so you can relax. Our experienced property managers handle the management, maintenance, and support of your property – from tenant communication to optimizing operating costs and more.
Trust in our expertise and benefit from a comprehensive service that saves you time and stress. Contact us today for a free offer!
