Fees & contracts
Management contract term: renewal, automatic extensions and the right moment to switch
Short answer
A WEG property manager may be appointed for at most five years, or three for the first manager after the association is created (§ 26(2) WEG). There is no automatic extension: every reappointment needs a new resolution, passed no earlier than one year before expiry. To switch, appoint the new manager for the end of the current term.
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Appointment and contract: two clocks that usually run together
When owners talk about the “management contract”, they usually mean two things at once. Legally, there are two:
- The appointment (Bestellung) makes the manager the association’s representative. Only an appointed manager may act for the association, operate accounts and conclude contracts.
- The management contract (Verwaltervertrag) sets out services and fees.
In practice, the two usually run in parallel, and the contract is often expressly linked to the appointment term. But for the question “How long are we bound?”, the appointment sets the pace.
The maximum: five years, three at the start
The law limits the appointment to at most five years (§ 26(2) WEG). For the first manager after the association is created – typically in a new build – the maximum is three years. More on this in our article on the first property manager in a new build.
If a longer term is resolved anyway, the resolution is not entirely invalid. The appointment simply ends automatically when the permitted maximum expires.
Why there is no silent renewal
Many contracts contain sentences like “The contract is extended by one year unless terminated.” That changes nothing for the appointment. A reappointment always needs a new resolution of the owners. And that resolution may be passed no earlier than one year before the current appointment expires (§ 26(2) sentence 2 WEG). This prevents the five-year limit from being circumvented by early extensions.
What still often happens in practice: the appointment expires, nobody notices, and the manager simply keeps working. Legally, the association is then without a manager and is represented by all owners jointly (§ 9b(1) WEG). At the latest when a bank asks for proof of the appointment or a tradesperson sues for payment, this becomes a problem. What to do in that situation is explained in our article WEG without a manager.
Tip for advisory boards: note the end of the appointment term somewhere nobody can miss it – and put the question “renew or tender?” on the agenda in good time.
Three ways out of the contract
1. Expiry. The simplest and cheapest route: the association doesn’t reappoint the current manager and elects a new one in good time. There are no run-off costs, and nobody has to give reasons.
2. Dismissal at any time. The association can dismiss the manager at any time during the term, without reason. The contract then ends no later than six months afterwards (§ 26(3) WEG); until then, the fee may continue.
3. Termination without notice. If there is an important reason, the contract ends immediately. How this works is explained in our article on dismissing your property manager.
Switching at year end: plan backwards
Most associations switch on 1 January, because the financial year is then closed and the new manager starts with a clean break. One consequence you should know: if the old manager’s term ends on 31 December, the Federal Court of Justice holds that the new manager has to prepare the annual statement for the year just ended (BGH, judgment of 26 September 2025, V ZR 206/24) – unless the old management contract expressly obliges the predecessor to do so. So ask candidates whether, and at what price, they will take on that statement. To make the change go smoothly, start early:
January to March
Check when the appointment ends
When exactly does the current appointment end? Is there dissatisfaction in the association? The advisory board decides whether to renew or tender.
March to May
Obtain quotes
Good managers plan their capacity early. If you only ask in autumn, you often won’t find anyone for 1 January.
May to July
Resolution at the meeting
The ordinary meeting in spring or summer is the ideal date: new appointment from 1 January, term, fee, authority to sign the contract.
October to December
Prepare the handover
Old and new manager coordinate records, accounts, running contracts and open matters.
1 January
Start
The new manager takes over – and, according to the Federal Court of Justice, also prepares the annual statement for the previous year unless the old management contract says otherwise. Clarify this when choosing a quote.
Our guide to tendering property management helps with the selection. If you’re running late, you can still switch – via an extraordinary meeting or at a later date. What the handover includes is covered in our article on deadlines and handover when changing managers.
What is the right term?
For a new manager, two to three years has proven itself: long enough for the onboarding to pay off, short enough to decide afresh after a trial period. With a proven manager, there is nothing against five years. Since owners can dismiss their manager at any time, a long term is no longer a prison anyway – the question is rather how long the agreed prices should apply. What else to look for in the contract is explained in our article on reviewing the management contract.
Your appointment expires at the end of the year? Ravenica takes over owners’ associations in Nuremberg, Fürth and Erlangen at the turn of the year and coordinates the handover with your previous manager. You’ll find the process on our page about changing your property manager.
Frequently asked questions
Does the management contract renew automatically if nobody terminates it?
The appointment as manager does not. It ends when the agreed term expires, and a reappointment needs a new resolution (§ 26(2) WEG). An extension clause in the contract cannot extend the appointment. If the manager simply keeps working, they do so without an appointment.
When can the owners vote on a reappointment?
No earlier than one year before the current term expires. An earlier resolution would undermine the five-year maximum and is therefore not permitted.
What happens if the appointment expires without a new resolution?
Legally, the association then has no manager and is represented by all owners jointly. That can quickly become a problem for banking, contracts and emergencies. Ask the previous manager to call a meeting immediately, or use the advisory board chair’s right to call one.
Can an appointment for ten years be resolved?
No. Such a resolution is only invalid to the extent that it exceeds the maximum term. The manager is then validly appointed, but only for five years – or three years for the first manager after the association was created.
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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