Checking a WEG management contract: the clauses that matter

Appointment and contract are two different things

A WEG manager is appointed by resolution of the owners’ meeting. That gives them the office. The management contract (Verwaltervertrag) separately sets out what they deliver and for what fee. The two are linked but legally distinct — which matters, especially when it comes to ending them.

An appointment may last at most five years, and the first after the condominium is created at most three (§ 26(2) WEG). The association can remove the manager at any time without good cause; the contract then ends no later than six months later (§ 26(3) WEG). A longer commitment cannot be agreed by contract.

Why standard-terms law applies

Management contracts are almost always pre-drafted terms supplied by the manager. According to the courts, an owners’ association is treated like a consumer if at least one owner is a consumer — which is nearly always the case. German standard-terms review under §§ 307 et seq. BGB therefore applies in full.

For you, that means many problematic clauses are not merely unfavourable but invalid. It is still worth removing them before the vote — a dispute over validity costs time and energy.

The clauses that matter

Term and end of contract. Does the contract term match the appointment? Is there a provision for the end after removal? Clauses meant to secure the manager fees or compensation for more than six months after removal breach § 26(3) WEG.

Base services. The contract should describe specifically what the base fee covers: one ordinary meeting, budget, annual statement, asset report, bookkeeping, insurance administration, organising maintenance, property inspections. The vaguer the description, the more room for special fees.

Dates. A good contract names a date for the annual statement and a period for the ordinary meeting. Without both, in a dispute you only have the vague standard of proper management. Why that matters is shown in annual statement missing.

Special fees. Every special service should be in a list, with an amount or a clear basis of calculation — such as a percentage of the construction sum for larger projects. Blanket wording like “other services charged at cost” is problematic (§ 307 BGB). How special fees affect the total is worked through for a typical year in comparing property management offers.

Liability. Excluding or limiting liability for intent and gross negligence, or for injury to life, body and health, is invalid (§ 309 no. 7 BGB). Limiting liability for slight negligence to the insured sum is common and generally permissible.

Spending limits and authority. Externally, the manager represents the association without limit. Internally, without a resolution, they may only take measures of minor importance or urgent ones (§ 27 WEG). The association can define this by resolution, for example with a value limit per order and per year. If the contract contains such a limit, check that it suits the size of your property.

Price adjustment. Index or stepped clauses are common and permissible if properly drafted. Check the reference value, frequency and whether adjustments work in both directions.

Accounts. The association’s accounts are in its own name. A clause providing for a trust account in the manager’s name no longer fits current law.

Handover at the end. The manager must hand over all records. A good contract also covers handing over electronic data in a readable format, with a deadline. You only notice how much that matters at the next change; see changing manager: deadlines and handover.

Checklist for the board and owners

On the last point, our article on the certified manager explains what certification means. What management should generally cost is covered in property management costs.

From contract to resolution

The contract is not negotiated between the manager and a single owner but approved by the owners’ meeting. Towards the manager, the chair of the advisory board then represents the association and signs (§ 9b(2) WEG). What the board may do here is covered in the advisory board: duties and rights.

Contract review therefore belongs before the invitation: requested changes should be agreed with the candidate before their offer goes to the owners. Draft resolutions for appointment and contract are in our templates for changing your manager.

If you also have a let flat managed under separate unit management (Sondereigentumsverwaltung), different rules apply to that contract — especially on termination. See changing your unit manager.

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We are happy to send Ravenica’s management contract to the board and owners for review before the meeting, with the list of special fees and a contractual date for the annual statement. Get in touch via our contact form; how a change works is on our page on changing property managers.