April 22, 2023, 10:12 am | Read time: 2 minutes
Managing rentals, hiring contractors, preparing utility bills: property managers have a long list of tasks. Some of these activities can be compensated separately–under certain circumstances.
A property manager is usually paid a flat fee by the homeowners’ association for their services. However, not all services are always included. For some efforts, the manager may seek additional compensation. What property owners should know about this and what they should pay special attention to is covered in this article. Additionally, a court has already addressed this issue.
Precisely Regulate Additional Compensation for the Manager
A corresponding agreement should clearly specify which activities of the manager are eligible for additional compensation. The Working Group on Tenancy and Real Estate of the German Bar Association (DAV) refers to a relevant decision (Case No.: 31 C 389/21) by the Buxtehude District Court.
Related: How to Recognize a Reliable Property Manager?
Basic Compensation or Additional Compensation?
In the specific case, the manager and the community of condominium owners disputed some of the additional services billed. The community, which had already paid, demanded a portion of the additional compensation back from the manager. Rightly so, according to the court.
While it is generally acceptable to agree on additional compensation for special services alongside the manager’s basic compensation, it must be contractually clarified which items are covered by the basic compensation and which fall under additional compensation.
The court did not see this requirement as met in the specific case, which is why the manager had to actually refund the collected additional fees.
with material from dpa