Changing managers
Dismissing your property manager: removal, important reason and deadlines under § 26 WEG
Short answer
Since December 2020, an owners’ association can dismiss its manager at any time – without an important reason, by simple majority (§ 26(3) WEG). The management contract then ends no later than six months afterwards. An important reason now only decides whether the contract ends immediately, saving the association the fee for those six months.
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The good news first
Many owners still believe they must first prove serious mistakes before they can get rid of their manager. That was true until 2020. Since the reform of German condominium law, the rule is: the manager can be dismissed at any time (§ 26(3) WEG). No reason is needed. And a clause saying otherwise is invalid – the law allows no deviation (§ 26(5) WEG).
There are, however, two things to separate that often get mixed up in everyday use: the dismissal (Abberufung) and the contract.
Dismissal and termination: two different things
The manager has two roles. They are the association’s representative – acting for it externally, signing contracts, operating accounts. And they are a contractual partner – with a management contract that sets their fee.
- With the dismissal, the manager immediately loses the representative role and may no longer act for the association.
- The contract ends no later than six months after the dismissal (§ 26(3) sentence 2 WEG). If it was due to expire earlier anyway, it ends earlier.
For the association, this means: it is rid of the old manager straight away but may have to keep paying them for up to six months. As a rule, the manager must offset what they save in work and costs.
When an important reason still matters
The important reason (wichtiger Grund) did not disappear with the reform. It just has a different job: it decides whether the contract ends immediately. If there is an important reason, the association can terminate the contract without notice (§ 626 BGB) and save the fee for the run-off period.
Courts have accepted an important reason, for example, where
service charges were kept in a trust account of the manager instead of an account of the association,
annual statements were repeatedly not presented or far too late,
the manager did not call a meeting demanded by more than a quarter of the owners,
resolutions were not implemented over a long period,
there were irregularities with the association’s money,
the manager grossly insulted owners or took sides one-sidedly against individual owners.
Whether it is enough in a given case is a matter of judgement. Two practical tips: first, document the reasons – with dates, emails and missed deadlines. Second, termination without notice is generally subject to a short deadline for declaring it (§ 626(2) BGB). If you tolerate a problem for months, it becomes harder to rely on it later as an important reason. When a lot of money is at stake, a brief legal check is worthwhile.
A safe approach is to combine both in the resolution: dismissal without reason, and alternatively termination without notice for an important reason. If the important reason doesn’t hold, the dismissal still stands.
How to prepare the resolution
The right agenda items
To keep things cleanly separated, you usually need four resolutions:
- Dismissal of the manager with effect from a specific date.
- Termination of the management contract – without notice for an important reason, alternatively at the earliest possible date.
- Appointment of the new manager from the same date, with term and key fee details.
- Authority for one person – usually the advisory board chair – to declare the termination and sign the new contract.
A ready-made wording suggestion is in our article Request to change property manager – template.
Dismissal and appointment at the same meeting
Don’t dismiss the old manager without appointing a new one at the same time. Otherwise the association has no manager and must be represented by all owners jointly – with accounts, invoices and tradespeople that nobody deals with. Obtain quotes beforehand and send them out with the invitation. Our guide to tendering property management explains how.
If the manager won’t put the item on the agenda
Not every manager is keen to invite people to their own dismissal. This is where the request to convene helps: if more than a quarter of owners demand a meeting, the manager must call it. If they refuse, the advisory board chair may send the invitation (§ 24(2) and (3) WEG). Explained step by step in our article on the extraordinary owners’ meeting.
The majority
A simple majority of the votes cast is enough for dismissal and appointment (§ 25(1) WEG). If the manager is also an owner in the building, case law says they may not vote on their own dismissal for an important reason.
After the resolution
After the meeting, owners have one month to challenge the resolutions (§ 45 WEG). Our challenge deadline calculator shows you the exact date. Incidentally, the dismissed manager cannot challenge the resolutions themselves – since the reform, only owners can.
Then the handover begins: records, accounts, logins, open matters. What it includes and which deadlines apply is covered in our article on deadlines and handover when changing managers. For an overview of the whole process in Nuremberg, see our article on changing your WEG manager in Nuremberg.
Ravenica guides owners’ associations in Nuremberg, Fürth and Erlangen through the change – from the draft resolution to taking over the records. More on our page about changing your property manager.
Frequently asked questions
Do we need an important reason to dismiss the manager?
No. Since 1 December 2020, the manager can be dismissed at any time (§ 26(3) WEG). Provisions in the declaration of division or the contract that limit dismissal to an important reason are invalid (§ 26(5) WEG). A majority resolution at the owners’ meeting is enough.
Do we still have to pay the manager after the dismissal?
Possibly. The management contract ends no later than six months after the dismissal. Until then, the manager can claim the fee even without working. As a rule, however, they must offset what they save as a result. If there is an important reason for termination without notice, the contract ends immediately.
What counts as an important reason for termination without notice?
A reason that makes further cooperation unreasonable for the association. Examples from case law include keeping service charges in a trust account of the manager, repeatedly missing annual statements, refusing to call a meeting demanded by more than a quarter of owners, or irregularities with the association’s money. It always depends on the individual case.
Can the dismissed manager challenge the resolution?
No. Since the WEG reform, only owners can challenge resolutions. The manager can at most pursue their fee claim under the contract.
Who signs the termination of the contract?
The association has to declare the termination to the manager. So that nobody has to guess who may do this, the resolution should expressly authorise one person – usually the advisory board chair or the new manager.
About the author
Julius Launhardt
Founder, owner & managing director of Ravenica · Dipl.-Ing. (TUM)
Graduate engineer (Dipl.-Ing.) and M.Sc. in Management from the Technical University of Munich, IHK-certified property manager, TÜV-certified sustainability manager and long-standing member of the volunteer fire brigade. As founder and managing director of Ravenica in Nuremberg, he is responsible for day-to-day business, processes and long-term strategy. Knows building services, refurbishments, energy and inheritance cases first-hand, and owns several properties himself.
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