Fees & contracts
Property manager fees increased – is the manager allowed to do that?
Short answer
During the contract term, a manager may only raise the fee if the contract expressly and validly provides for it – for example as a fixed stepped increase. Without such a clause, they need a resolution of the owners. Automatic index clauses in management contracts are legally risky, and vague adjustment clauses are usually invalid.
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First of all: you are not the only one
If your property manager is asking for more money right now, it is rarely about your building. The whole industry is raising prices. According to the industry barometer of the managers’ association VDIV, the average fee for owners’ association management in 2025 was 29.12 euros net per unit per month. For 2026, managers plan an average increase of 9.1 per cent, and for small associations of up to ten units, just over 12 per cent. More than half of managers say their previous prices no longer cover their costs.
That doesn’t mean every increase is justified. It does mean that the question “Are they allowed to?” should come with a second one: “What would the alternative be?”
What the contract says applies
An owners’ association and its manager are bound by the agreed fee. During the term, the manager can therefore only demand more if the contract itself provides for an adjustment. There are three typical variants:
Fixed stepped increase. The contract states from the outset by how much the fee will rise and when – for example a fixed percentage per year or specific amounts. This is legally unproblematic and transparent for everyone.
Automatic index clause. The fee is meant to follow the consumer price index without any further action. That sounds fair but is risky: such self-executing clauses are generally prohibited under the Price Clauses Act (Preisklauselgesetz), and the exceptions usually require very long terms – management contracts run for five years at most. Specialist literature therefore regularly regards such clauses in management contracts as inadmissible. However, a prohibited price clause only becomes invalid once this has been finally established by a court; increases paid until then generally stand.
Vague adjustment clause. Wording such as “The manager may adjust the fee to general cost developments” usually doesn’t survive scrutiny in standard-form contracts (§ 307 BGB). It is too vague and unreasonably disadvantages the association.
No clause at all. Then the manager can only ask during the term. An increase requires a resolution of the owners’ meeting.
What to do about a unilateral increase
If the manager raises the fee without a valid basis and simply debits the higher amount from the association’s account, that is a serious problem. The association can reclaim the overpayment. Raise this in writing as the advisory board and put it on the agenda. A manager who helps themselves in this way also gives the association grounds for a separation – more on this in our article on dismissing your property manager.
How to respond wisely to a fee demand
Most increases don’t come unilaterally but as a request – often in connection with an upcoming reappointment or after the property manager has been sold. Then you have room to negotiate. Proceed as follows:
Check the contract: is there a stepped increase or clause? When does the appointment end?
Ask for reasons: what has changed in the workload, and what does the association get for it?
Compare with the market: is the new fee within what associations of your size pay?
Look at total costs: base fee plus extra fees over the last two years
Negotiate something in return: for example fixed dates for the annual statement, an owner portal or a stepped increase instead of a one-off jump
If necessary, obtain alternative quotes – that gives both sides clarity
For the market comparison, our article on property management costs helps. How to get quotes from other managers without immediately deciding to switch is covered in our guide to tendering property management.
Is paying more sometimes the better choice?
An honest answer: yes. If you are happy with your manager, you shouldn’t switch over a euro or two a month. A change takes time, and good managers aren’t accepting every building right now. The Federal Court of Justice sees it similarly: a fee above the usual rates is not automatically uneconomical (BGH, judgment of 5 July 2019, V ZR 278/17).
It is different when the increase meets poor performance: statements arrive late, requests go unanswered, resolutions aren’t implemented. Then the fee demand is a good occasion to rethink the relationship. How to recognise good work is covered in How to spot a good property manager.
What to look for in the new contract
If you reach an agreement or move to a new manager, look for a transparent price adjustment in the contract: ideally a fixed stepped increase whose amounts you already know today. Then there are no surprises during the term and no arguments about indices. Which other clauses matter is explained in our article on reviewing the management contract.
At Ravenica, every price component is in the quote before you sign – base fee, extra fees and future adjustments. If you need a comparison for your association in Nuremberg, Fürth or Erlangen: request a quote.
Frequently asked questions
Can the manager simply raise the fee with a circular letter?
No. A circular doesn’t change a contract. Without a valid adjustment clause in the contract, a resolution of the owners’ meeting is needed. The association can reclaim payments made from its account on the basis of a unilaterally increased fee.
Are index clauses allowed in a management contract?
They are legally risky. A clause that automatically links the fee to a price index is, for contracts with a short term, regularly a price clause prohibited under the Price Clauses Act (PrKG). Fixed stepped increases with amounts or percentages set in advance are unproblematic.
Do we have to agree to an increase?
No. The association can refuse. The manager may then consider ending the relationship, and at the next reappointment they will renegotiate anyway. So check calmly whether the demand is in line with the market before you say no.
Is a fee above average automatically inadmissible?
No. The Federal Court of Justice has ruled that a fee is not uneconomical simply because it is above the usual rates (judgment of 5 July 2019, V ZR 278/17). What matters is whether price and service are justifiable overall.
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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