Change of buildings management

Find support for the proposal and raise the sentiment for it among the owners.
Are you the only one who thinks that the work of the building management is unsatisfactory or do your co-owners see it the same way? Maybe you have discussed the subject in the house with neighbours or during owners’ meetings. Then it is now time to get active.

The wider the wish of the owners for a change of management, the more likely a motion for that is to succeed.

If many owners are all pulling in the same direction, this gives a signal to owners who have not yet engaged with the subject or are undecided.

A check must be made of the earliest possible time when the current management contract can be terminated.
Time-limited management contracts end at the agreed date. Premature termination is only possible if there are gross violations of obligations by the manager. A strict standard is applied to this check.

Management contracts for an indeterminate time with annual termination possibilities are predominantly agreed. Unless other termination arrangements are agreed, a management contract can be terminated by 30.9. of the current management year to take effect effect on 31.12.

Define what is really important to you in the management of your property.
Contact other building management companies and get them to send you a no-obligation quotation.

There is no standard which all quotations for management contracts must look like. Comparing quotations is thus not straightforward. Creating a quotation matrix with which the important services can be compared is recommended. You can also specify your particular wishes for building management. In all cases, create a catalogue of questions in advance which you can send to building management companies under consideration. This can simplify later comparison.

The decision to change building management is made via a resolution. A simple majority is sufficient. As of July 1, 2022, the majority requirement of absolute majority will be supplemented by a relative majority.

Resolutions can be made in various ways. Formalities must always be adhered to precisely (see below).

Those entitled to vote are fundamentaly all (registered) owners – in the case of owner partnerships, both owner-partners must vote the same way for their vote to count.

What is the vote on?
There are at least two decisions to make in the context of the resolution to change building management:

• Notice of termination of the current building management and
• Appointment of the new building management company.

The resolutions are normally taken at the same time. This has significant advantages for the organisational procedure. If, however, time is getting short for notice of termination of the existing building management and no internal decision has yet been made regarding the future building management, the resolutions can also be made separately.

How is the vote taken?
In the owners’ meeting

In order to be able to pass a valid formal resolution in the owners’ meeting, some (strict) formal stipulations must be met: every apartment owner must be informed at least 14 days in advance of the content of the proposed vote (§ 25 Sect. 2 WEG [Condominium Ownership Law]) by invitation to the owner’s meeting and issue of an agenda by a notice in the building and by letter to the last known delivery address.

By circular resolution

The initiators of a resolution send a voting form, together with an accompanying letter in which the reasons for a resolution are set out, which must be returned within an announced period (atleast 3 weeks is recommended).

Ermittlung des Beschlussergebnisses / Bekanntgabe
Resolutions bythe owners are – provided they do not have serious deficiencies – fundamentally legally valid from the day of the announcement. That means that a resolution is applicable and “valid” in content until the contrary is determined by a court.

Resolutions should be publicised both by a notice on the (noticeboard in the building) and written notification to the owners.

Reference to the possibility of dispute (under § 24 sect. 6 WEG) should be added. The contestation period starts with the day of announcement – the end of the contestation period should also be given.

The resolution comes into force ifthere are no disputes in court within the open period.

The existing building management must be terminated in good time in writing.

The termination letter must contain the outcome of the resolution and in order to avoid problems with evidence, must always be registered and sent in good time to the existing building management company. It should be noted that termination generally has to be received by 30.9 of a year.

Neutral and independent building management creates trust.

Occasionally a majority owner (more than 50% of the shares) will wish to keep or use “his” building management company. In this case, § 24 Sect. 3 WEG protects the remaining apartment owners if the objectof the proposed resolution is a legal transaction with an apartment owner or a person who is personally or commercially related. In this case, the affected co-owner has no voting rights. These shares are not considered and half of the shares of the co-owners with voting rights is sufficient.