Cancel property management - in three steps

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Overview
Overview

What changes make it easier to quit?

Changing property managers has become much easier and works relatively smoothly with Ralph's assistance. Leave us a message and we will get back to you to discuss in more detail. We answer 100% of the inquiries personally.

  • With the modernization of the German Condominium Act (WEMoG) as of 01.01.2020, WEG owners now have extensive freedom to dismiss the property management. There is no longer any need for good cause, as was previously the case. Pursuant to Section 26 (3) Sentence 1, (5) WEG, the property manager can be removed from office at any time, even without justification.
  • However, in most cases there is an important reason on the basis of which the owners decide against the current management and in favor of a new or different type of WEG management. If the property management is recalled, the management contract automatically ends six months after the date of recall (Section 26 (3) sentence 2 WEG), and no additional notice of termination is required. However, if the owners' association wishes to terminate the contract before the end of the six-month period, it may do so early in accordance with the notice periods agreed in the property management contract or the statutory provisions.
  • Owners' meetings (ETVs) now always have a quorum, even if only a few owners are present. A simple majority (more than 50% of the votes) of the owners present at the meeting is sufficient for the dismissal of the current property management. For example, if only three owners: inside appear at the ETV, two votes are sufficient for the change. It is common that the term of property management contracts is linked to the appointment of the property manager. Therefore, the administrator's contract ends as soon as it has been decided to dismiss the administrator.
  • Another option is extraordinary termination without notice, but this requires good cause. If the administrator is dismissed due to extraordinary termination, his contract ends immediately.

Step 1: Obtain bids and convene meeting

To obtain offers, a search on Google is often sufficient, but there are also comparison portals such as Hausverwalter-Vermittlung, Deutsche Hausverwalter or HausverwalterScout, which forward your request to property managers. This way you will receive offers within a few days.

Of course, it is helpful if the offers of the property management companies are as comparable as possible. We will therefore send you a service catalog for comparing the offers. You can then have the other administrations fill this out so that you have an overview of all services and costs. The devil is often in the details, so we strongly recommend that applicants ask for details.

Once you have quotes, you can plan the decision.

If the owners' meeting of the current calendar year has not yet taken place, the owners usually ask the acting property management to include the resolution in the agenda. The acting property management is legally obliged to include this resolution. This should happen before the invitation to the meeting is sent out, otherwise some administrations even refuse to adjust the agenda within three weeks! If your WEG has already had an owners' meeting in the current calendar year or if the acting administration refuses to include the resolution, you can call a so-called extraordinary owners' meeting yourself. This is not complicated, but we are happy to help you with it.

If your WEG has already had an owners' meeting in the current calendar year or if the acting administration refuses to include the resolution, you can call a so-called extraordinary owners' meeting yourself. This is not complicated, but we will gladly help you with it.

The agenda of the owners' meeting should include the following proposed resolutions.

  • Termination of the administrator's contract and dismissal of the administrator
  • Acceptance of the new administrator contract and appointment of the new administrator

Step 2: Conduct of the meeting and resolution

On the day of the owners' meeting, the resolution on the change of management shall be put to the vote.

Can't attend the meeting but want to vote? 

All co-owners who cannot attend the meeting may, for example, give their neighbor a written power of attorney so that their vote counts despite their absence. It is important that this power of attorney actually exists in the original, because a copy is not sufficient in an emergency!

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Step 3: Handover 

As soon as the change is through, the newly appointed administration takes care of the handover. Funds, accounts and documents are handed over. Often this can take 1-2 months until the handover is finally completed. Often, only then can the work of the new property management really start.

Unlike most other management companies, there are no costs for your WEG when switching to Ralph. Ralph takes care of all the details.

What steps happen in the first 2-3 weeks after the meeting?

  • Signing the contract: As the advisory board, you sign the new management contract on behalf of the WEG.
  • Transfer of the opening of the accounts: The WEG accounts of the previous administration can be taken over with the resolution protocol. If the incumbent AGM works with a bank with which we do not cooperate, we will open the WEG accounts for house money and reserves at DKB on behalf of the WEG.
  • Handover of documents: We coordinate the collection of all documents with the previous administration. You do not have to worry about anything.
  • Digitization of documents: We search out the most important documents and digitize them.
  • Welcome letter: We send an initial welcome letter to all owners and, if applicable, inform the owners of the new IBAN of the new WEG account.
  • Invoices: We subsequently take care of the final accounts of the previous year
  • Portal: We sort, check and label the digitized documents and then also activate our portal so that you have access to all important documents, resolutions and upcoming topics.
  • Certification of the minutes of the resolution: Depending on the declaration of division, we may require your certified signature of the minutes of the resolution in order to be able to issue administrator approvals in the future. We may contact you separately in this regard after we have checked the TE. You could then have the minutes briefly certified by our notary, or a notary of your choice.

What is the difference between ordinary and extraordinary termination?

The termination of the administrator's contract can be done in two ways: ordinary termination and extraordinary termination without notice. 

  • Ordinary termination is possible without good cause, but the terms of the contract must be adhered to. If there is no other contractual provision, the notice period is 6 months from the dismissal of the administrator.‍
  • An extraordinary termination without notice, on the other hand, requires an important reason representing misconduct on the part of the manager, such as misappropriation of WEG funds or failure to adequately fulfill the necessary duties. Other important reasons may be listed in the contract or in the law.

As soon as good cause is known, the notice of termination must be received by the administrator within two weeks. Although the reason does not have to be stated, the administrator can demand that the reason be stated. In summary, it can be said that extraordinary termination without notice is only possible if there is good cause. In the absence of good cause, the contractual relationship ends within 6 months of the administrator's dismissal, unless otherwise contractually agreed.

We will be happy to advise you on your cancellation options free of charge and without obligation.

How does the ordinary termination within 6 months?

Thanks to the latest WEG reform (year 2020), notice periods from administrator contracts are no longer valid. Instead, a maximum notice period of 6 months applies without exception. For the termination owners: inside have two options

Option 1: Cancellation via an owners' meeting:

A majority resolution at an owners' meeting is required to change the WEG management. This is because the contract was concluded with the WEG itself, not with individual owners.

If an owners' meeting is planned in the near future, you as the owner can: in the acting property management simply to include the resolution in the agenda. It is advisable to send the items ideally by e-mail and registered mail to the property management. This way you are on the safe side, even if the administration should refuse to include the items. The acting property management is legally obliged to include this resolution. 

Important tip: This should ideally happen before the invitation to the meeting is sent out, otherwise some administrations even refuse to adjust the agenda within three weeks! 

If your WEG has already had an owners' meeting in the current calendar year or the acting administration refuses to include the resolution, the WEG can independently convene a so-called extraordinary owners' meeting. This is not complicated, but we will gladly help you with it. 

The agenda of the owners' meeting should include the following proposed resolutions.

  • Termination of the administrator's contract and dismissal of the administrator
  • Acceptance of the new administrator contract and appointment of the new administrator

Option 2: Cancellation by circular resolution:

Pursuant to Section 23 (3) of the German Condominium Act (WEG), the circular resolution represents a kind of "shortcut" for achieving resolutions in the condominium owners' association. Particularly in the case of decisions that need to be made quickly, the circular resolution offers an attractive option, as only a request in text form needs to be sent to all co-owners.

If you live in a well-organized WEG in which people communicate a lot with each other, you can also pass the resolution as a circular resolution (i.e. in text form) and dispense with a meeting completely. However, it is important that all co-owners confirm the circular resolution briefly (an e-mail or WhatsApp is sufficient). Often some WEGs fail exactly because they do not have all contact data among themselves. Therefore, the meeting - whether self-organized or by the acting property management - is the more frequently chosen way.

Conclusion: If a property management was recalled during an owners' meeting or by a circular resolution, then the property management contract ends automatically after a period of 6 months in accordance with § 26 para. 2 sentence 2 WEG.

There is often a clause in administrator contracts that links the end of the contract to the dismissal of the administrator. In this case, no extraordinary termination is required, but the administrator's contract ends automatically as soon as the dismissal is legally effective.


When is early termination without notice possible?

In most cases, there are also other termination options without notice that allow the contractual relationship to be terminated before the end of the appointment period or the 6 months following the recall. 

Extraordinary termination in accordance with Section 626 of the German Civil Code is possible if the continuation of the contractual relationship is unreasonable for one of the parties. In this case, notice of termination must be given within two weeks of becoming aware of the reason for termination.

The relevant legal text: 

Pursuant to Section 626 of the German Civil Code (BGB), termination without notice is subject to certain conditions: that "the continuation of the employment relationship" has becomeunreasonable

With what valid reasons is termination without notice possible?

The most common reasons for termination without notice in practice: 

  • Resolutions of the WEG are not implemented.
  • The condominium owners were not invited to meetings over a long period of time, despite requests to do so. 
  • The WEG documents were kept incorrectly or inspection was refused. 
  • Contracts were awarded without a resolution or instruction from the owners
  • The business plan was prepared late or not at all 
  • WEG funds have been embezzled or the manager has not kept a WEG own account and has mixed his private assets with those of the WEG. 

Who prepares outstanding annual statements?

In practice, when there is a change of manager within a business year, the question often arises as to which management has to prepare the outstanding annual accounts (operating costs, ancillary costs, house charge accounts). 

If the transition happens within the first 6 months of the year, the outgoing administrator is no longer obliged to prepare the house charge statement for the previous year. Therefore, the new administrator should take over the settlement. The outgoing administrator is obliged to prepare the statement in an orderly manner and to hand over all invoices in a well sorted manner. 

If the transition happens after the first 6 months of the year, from the beginning of the second half of the year the condominium administrator is no longer obliged to prepare the condominium fee statement for the expiring year. 

If the outgoing administration itself has not yet completed the settlement of the previous year (e.g. in the case of a change at the beginning of 2023, it turns out that the outgoing administration had not yet completed the 2022 settlement either), the acting administration usually takes over the workup for the WEG, but charges the costs of the old debts to the previous administration. 

When there is a change of administrator, the outgoing administrator must provide the new administrator with essential information about the condition of the property, the community's assets, or other important matters that are not clear from the records.

Step 3: Handover 

As soon as the change is through, the newly appointed administration takes care of the handover. Funds, accounts and documents are handed over. Often this can take 1-2 months until the handover is finally completed. Often, only then can the work of the new property management really start.

Unlike most other management companies, there are no costs for your WEG when switching to Ralph. Ralph takes care of all the details.

What steps happen in the first 2-3 weeks after the meeting?

  • Signing the contract: As the advisory board, you sign the new management contract on behalf of the WEG.
  • Transfer of the opening of the accounts: The WEG accounts of the previous administration can be taken over with the resolution protocol. If the incumbent AGM works with a bank with which we do not cooperate, we will open the WEG accounts for house money and reserves at DKB on behalf of the WEG.
  • Handover of documents: We coordinate the collection of all documents with the previous administration. You do not have to worry about anything.
  • Digitization of documents: We search out the most important documents and digitize them.
  • Welcome letter: We send an initial welcome letter to all owners and, if applicable, inform the owners of the new IBAN of the new WEG account.
  • Invoices: We subsequently take care of the final accounts of the previous year
  • Portal: We sort, check and label the digitized documents and then also activate our portal so that you have access to all important documents, resolutions and upcoming topics.
  • Certification of the minutes of the resolution: Depending on the declaration of division, we may require your certified signature of the minutes of the resolution in order to be able to issue administrator approvals in the future. We may contact you separately in this regard after we have checked the TE. You could then have the minutes briefly certified by our notary, or a notary of your choice.

What is the difference between ordinary and extraordinary termination?

The termination of the administrator's contract can be done in two ways: ordinary termination and extraordinary termination without notice. 

  • Ordinary termination is possible without good cause, but the terms of the contract must be adhered to. If there is no other contractual provision, the notice period is 6 months from the dismissal of the administrator.‍
  • An extraordinary termination without notice, on the other hand, requires an important reason representing misconduct on the part of the manager, such as misappropriation of WEG funds or failure to adequately fulfill the necessary duties. Other important reasons may be listed in the contract or in the law.

As soon as good cause is known, the notice of termination must be received by the administrator within two weeks. Although the reason does not have to be stated, the administrator can demand that the reason be stated. In summary, it can be said that extraordinary termination without notice is only possible if there is good cause. In the absence of good cause, the contractual relationship ends within 6 months of the administrator's dismissal, unless otherwise contractually agreed.

We will be happy to advise you on your cancellation options free of charge and without obligation.

How does the ordinary termination within 6 months?

Thanks to the latest WEG reform (year 2020), notice periods from administrator contracts are no longer valid. Instead, a maximum notice period of 6 months applies without exception. For the termination owners: inside have two options

Option 1: Cancellation via an owners' meeting:

A majority resolution at an owners' meeting is required to change the WEG management. This is because the contract was concluded with the WEG itself, not with individual owners.

If an owners' meeting is planned in the near future, you as the owner can: in the acting property management simply to include the resolution in the agenda. It is advisable to send the items ideally by e-mail and registered mail to the property management. This way you are on the safe side, even if the administration should refuse to include the items. The acting property management is legally obliged to include this resolution. 

Important tip: This should ideally happen before the invitation to the meeting is sent out, otherwise some administrations even refuse to adjust the agenda within three weeks! 

If your WEG has already had an owners' meeting in the current calendar year or the acting administration refuses to include the resolution, the WEG can independently convene a so-called extraordinary owners' meeting. This is not complicated, but we will gladly help you with it. 

The agenda of the owners' meeting should include the following proposed resolutions.

  • Termination of the administrator's contract and dismissal of the administrator
  • Acceptance of the new administrator contract and appointment of the new administrator

Option 2: Cancellation by circular resolution:

Pursuant to Section 23 (3) of the German Condominium Act (WEG), the circular resolution represents a kind of "shortcut" for achieving resolutions in the condominium owners' association. Particularly in the case of decisions that need to be made quickly, the circular resolution offers an attractive option, as only a request in text form needs to be sent to all co-owners.

If you live in a well-organized WEG in which people communicate a lot with each other, you can also pass the resolution as a circular resolution (i.e. in text form) and dispense with a meeting completely. However, it is important that all co-owners confirm the circular resolution briefly (an e-mail or WhatsApp is sufficient). Often some WEGs fail exactly because they do not have all contact data among themselves. Therefore, the meeting - whether self-organized or by the acting property management - is the more frequently chosen way.

Conclusion: If a property management was recalled during an owners' meeting or by a circular resolution, then the property management contract ends automatically after a period of 6 months in accordance with § 26 para. 2 sentence 2 WEG.

There is often a clause in administrator contracts that links the end of the contract to the dismissal of the administrator. In this case, no extraordinary termination is required, but the administrator's contract ends automatically as soon as the dismissal is legally effective.


When is early termination without notice possible?

In most cases, there are also other termination options without notice that allow the contractual relationship to be terminated before the end of the appointment period or the 6 months following the recall. 

Extraordinary termination in accordance with Section 626 of the German Civil Code is possible if the continuation of the contractual relationship is unreasonable for one of the parties. In this case, notice of termination must be given within two weeks of becoming aware of the reason for termination.

The relevant legal text: 

Pursuant to Section 626 of the German Civil Code (BGB), termination without notice is subject to certain conditions: that "the continuation of the employment relationship" has becomeunreasonable

With what valid reasons is termination without notice possible?

The most common reasons for termination without notice in practice: 

  • Resolutions of the WEG are not implemented.
  • The condominium owners were not invited to meetings over a long period of time, despite requests to do so. 
  • The WEG documents were kept incorrectly or inspection was refused. 
  • Contracts were awarded without a resolution or instruction from the owners
  • The business plan was prepared late or not at all 
  • WEG funds have been embezzled or the manager has not kept a WEG own account and has mixed his private assets with those of the WEG. 

Who prepares outstanding annual statements?

In practice, when there is a change of manager within a business year, the question often arises as to which management has to prepare the outstanding annual accounts (operating costs, ancillary costs, house charge accounts). 

If the transition happens within the first 6 months of the year, the outgoing administrator is no longer obliged to prepare the house charge statement for the previous year. Therefore, the new administrator should take over the settlement. The outgoing administrator is obliged to prepare the statement in an orderly manner and to hand over all invoices in a well sorted manner. 

If the transition happens after the first 6 months of the year, from the beginning of the second half of the year the condominium administrator is no longer obliged to prepare the condominium fee statement for the expiring year. 

If the outgoing administration itself has not yet completed the settlement of the previous year (e.g. in the case of a change at the beginning of 2023, it turns out that the outgoing administration had not yet completed the 2022 settlement either), the acting administration usually takes over the workup for the WEG, but charges the costs of the old debts to the previous administration. 

When there is a change of administrator, the outgoing administrator must provide the new administrator with essential information about the condition of the property, the community's assets, or other important matters that are not clear from the records.

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