The property developer appoints the initial property manager: how long does that last?

Buyers of a new build apartment usually find the property management company already in place. The property developer appointed it, often in the declaration of division and long before the first owner picks up the keys. There are good reasons for this: a community that does not yet exist cannot hire anyone, and without a property manager nothing gets done, from the budget to the house rules. Many buyers, however, read something into this that is not there: that they are permanently bound by this decision. They are not.

Three years is the maximum

For the initial property manager, the law deliberately draws a tighter line than usual. Under Section 26 (2) of the German Condominium Act (WEG), the first property manager of a newly established condominium owners' association may be appointed for no more than three years. For every subsequent appointment, the limit is five years.

This difference is no accident. Lawmakers know that the first property manager was not chosen by the community, and therefore give the community an earlier, guaranteed point at which it decides for itself. At the latest then, the question is on the table, and it is yours to answer.

You do not have to wait for that

The truly decisive point is a different one, and it has not yet registered everywhere. Since the WEMoG, Germany's condominium law reform that took effect in December 2020, an owners' association can remove its property manager at any time and without cause. A simple majority at the owners' meeting is sufficient (Section 26 (3) WEG). The management contract then ends no later than six months after the removal.

This also applies to the initial property manager. The appointment by the property developer therefore does not bind the community for better or worse, but only for as long as the community wants it to. And one more important point: even a clause in the declaration of division that seeks to lock in the property manager permanently changes nothing about this.

You are able to act as soon as the community can pass resolutions. For that, not all apartments need to be sold and transferred in the land register: even the so-called emerging owners' association can already adopt resolutions. How resolutions and majorities work in detail is explained in our guide WEG and the law.

The point that really matters

The interesting question is not whether the property developer selected a property manager, but how that manager handles one particular constellation. In the first years after completion, the issue is almost always defects in the common property: roof, facade, basement, underground garage, heating. The property manager has to assert these defects against the property developer on behalf of the community, in other words against the very party to which it owes its mandate.

That is not an accusation, it is a description. Many initial property managers handle this very cleanly. But it is the point where looking closely pays off. Good questions to ask the property manager are:

• How do you document defects in the common property, and when do you inform us?
• Who tracks the warranty periods, and how do you monitor them?
• How many properties do you manage for this developer?
• What happens if we want to file a formal defect notice and the developer disagrees?

A manager who answers these questions concretely has a process in place. One who dodges them is telling you something as well.

For most new communities this is a relaxed starting position: they begin with a property management company that keeps things running from day one, and still keep the decision in their own hands. Use the first owners' meeting to assess the cooperation calmly, and give the property manager a fair chance. If you later want to compare, you will find the procedure, the deadlines and the matter of comparative offers in our guide on switching your property management company. The path there is usually shorter than it looks at the start.