Tasks of a property management: types of management and costs

Definition: What is a property management company? 

A property management company looks after real estate. This includes residential buildings and residential complexes with rental apartments and condominiums as well as commercial properties. The tasks of a property management company include commercial, technical and operational areas - such as the organization of owners' meetings and the implementation of resolutions. More on this later in the article. Property management is either carried out by a single person, i.e. a WEG administrator, or by a team.

Types of property management companies and their specific tasks

The tasks and duties of a property management company vary depending on the type of property and the individual needs of the owners. As a condominium owners' association, you should therefore inform yourself in advance about the different types of property management and select a property manager who will look after your property in the best possible way and represent your interests. Here is a brief overview of the tasks and duties of each type of property manager.

• Condominium management: The management of the common property is the main focus of condominium management. The property manager organizes owners' meetings, prepares utility bills, commissions tradesmen for maintenance work and ensures compliance with the house rules.
• Rental management: In rental management, the focus is on letting apartments and houses on behalf of landlords. The management contract includes the following: The property manager looks for suitable tenants, concludes rental agreements, manages rental payments and takes care of the maintenance of the rental apartments.
• Condominium management: Condominium management combines elements of condominium and rental management. The property management company manages both the communal property of a condominium and the individual apartments that are rented out.
• Commercial property management: Property management takes care of the letting of commercial space, the billing of operating costs and compliance with tenancy law regulations.

The most important tasks of all property management companies

A professional property manager takes on a wide range of tasks for property owners and communities of owners. The administrative tasks of property managers can be divided into three main areas:

• Commercial management: First of all, this involves administrative activities for the property management, such as the preparation of utility bills, annual financial statements and business plans. Commercial management protects the owners' financial interests. Transparent and comprehensible accounting ensures that all costs are correctly allocated. The manager also ensures that the owners are regularly informed about the financial situation of the property.
• Technical management: The property manager carries out regular checks and maintenance on the building, hires tradesmen if necessary and thus ensures that your property retains its value and has a long service life. You can avoid unnecessary costs through preventive measures and efficient management of maintenance costs.
• Legal tasks: The legal aspects of property management go far beyond simply managing rental income. The property manager is responsible for ensuring compliance with tenancy agreements, tenant protection laws and condominium laws. It acts as an interface between owners, tenants and authorities and thus contributes to the smooth handling of all legal matters relating to the property.

In the following, we explain the three task areas in detail: 

Commercial tasks of property management 

The property manager is responsible for the financial management of apartment buildings, residential complexes and condominiums. The tasks and duties include

• Preparation of service charge statements
• Collection of house charges and rent payments
• Accounting and auditing
• Annual financial statements and business planning
• Organization of owners' meetings
• If applicable, collection and administration of rent from tenants (in the case of rental management)

Tenancy management: an important task of property management companies

In addition to managing condominiums, many property management companies also take on rental management. Here they take care of the letting of rental apartments and apartment buildings. The tasks of rental management include

• Searching for and selecting tenants
• Preparation and administration of rental agreements
• Implementation of apartment handovers
• Collection of rent payments
• Processing of tenant changes

What does property management mean for tenants?

The tasks and duties of property management also play an important role for tenants. This is because professional property management ensures that all matters relating to tenancy law are handled smoothly.

• Contact: The property management company is the first point of contact for all questions relating to the rental apartment in your apartment building.
• Maintenance: The property management company takes care of the maintenance of the rental apartments and rectifies any defects as quickly as possible.
• Safeguarding rights: The property management company stands up for the rights of tenants.

What all comes with the prize at Ralph's: 

• Ensure timely, complete, and proper bookkeeping
• Consistent and regular reminder system for house payments
• Payment reminder from a condominium owner to fulfill his duties and obligations        
• Preparation of the certificate § 35 a EStG household services
• Collection of house money claims, special allocations and settlement results
• Execution of all payment transactions
• Annual liquidity planning for the entire community
• Separate accounting of economic subcommunities
• Preparation of operating cost accounts of rented common property
• Review of annual accounts from the pre-administrator to the administrative takeover (upon request).
• Collection and settlement of special levies 
• Processing of VAT-optional objects
• Preparation of separate statements for third parties (tax advisors)

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Technical tasks of the property management

In addition to commercial tasks, a property manager is also responsible for the technical management of the residential building or complex. The following topics are among the tasks and duties of the manager:

• Assessment of the building condition before renovation work
• Planning and coordination of construction measures
• Control and monitoring of the progress of construction
• Maintenance and repair of technical equipment such as elevators or electric gates
• Regular inspection of the technical systems in the building

What all comes with the prize at Ralph's: 

• Establishment of a long-term maintenance plan
• Obtaining offers
• Regular object inspection with technical experts
• Emergency service availability (by the specialist company responsible for the property, announced on the house notice board). Each property supervisor can be reached in case of emergency.
• Monitoring / invoicing of maintenance work within the scope of the approved contract sum 
• Monitoring of construction measures (plus flat administrative fee, depending on the extent of the work)
• Processing of insurance claims (notification to the insurance company, inspection with experts, commissioning, inspection, acceptance of craftsmen's services, settlement with the insurance company)

Legal tasks of property management

A property manager needs good legal knowledge to properly manage a residential building. There are numerous legal pitfalls to consider, especially when managing a homeowners' association. Knowledge of the WEG law is of great importance here. The legal tasks of a property manager include representing the owners vis-à-vis third parties, complying with legal requirements and negotiating, concluding and reviewing contracts.

However, the property management company does not always take on all tasks itself. Rather, it is responsible for organizing and coordinating the various activities. If special expertise is required, for example for complex construction measures, the property management company can commission external experts such as architects, janitors or specialist companies by resolution of the owners' association.

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Common property vs. separate property: key concepts for owners and property managers

For you as the owner, it is still important to understand the difference between common property and separate property. This distinction has far-reaching effects on the tasks and duties of all parties involved.

Shared property: shared responsibility

Common property comprises all parts of a building that are owned jointly by all owners. This typically includes

• Staircases
• Elevators
• Roofs
• Communal gardens or outdoor facilities

The management of the common property is the responsibility of the condominium administrator. They coordinate maintenance measures, organize owners' meetings and implement resolutions of the community of owners.

Special property: individual responsibility

In contrast, separate ownership refers to self-contained units with a residential purpose, such as individual apartments. The following special features apply to separate ownership:

• The owner has the sole right of use and disposal.
• The management can be taken over by the owner or handed over to a third party as a service.
• Special property management companies look after these individual units in particular.

Understanding this distinction is fundamental to effective property management and harmonious coexistence in residential complexes. Owners should know their duties and obligations in relation to both forms of ownership in order to avoid conflicts and ensure smooth management.

Property management tasks: 3 important tasks in focus

The main tasks of a property management company include the following services: 

Accounting and economic plan 

The tasks of property managers not only include monitoring incoming payments from owners, but also checking, paying and correctly booking expenses. All disbursements must be stored unalterably and documented with a detailed invoice. A classic income statement is usually sufficient to provide an overview of incoming and outgoing payments.

Before the start of each year, the property management prepares an economic plan that forecasts the expected payments for the coming year and measures the expected house allowance payments. The required funds are calculated on the basis of contracts and experience from previous years and allocated to the individual owners in accordance with the declaration of division and the agreed apportionment table.

After the end of the business year, the final account is drawn up on the basis of actual invoices and payments. Differences between the business plan and the statement of account are settled by means of a corresponding additional payment. If more money has been paid in than estimated in the business plan, the money can be added to the reserve or paid out to the owners.

Maintenance and refurbishment

Another important area of property management is the technical tasks relating to the property to be managed. It should be noted here that property management does not automatically include a janitor service. Some property managers do offer a janitor service, but as this is not a typical management task, it is usually billed separately.

The actual task of a property manager is to determine the need for repair and maintenance measures, to commission these and to monitor them. To do this, the property management company must regularly check the condition of the property and pay particular attention to hidden damage or future problems. If a problem arises with the property, it is the property management company's job to find a suitable tradesman and commission them to repair the property. In the case of larger renovation measures, the project is put out to tender to determine the best offer with the best price-performance ratio. However, it should be noted that repairs that need to be carried out quickly must be distinguished from refurbishment, modernization or renovation measures that require longer preparation.

A forward-looking property management company also draws up a long-term renovation plan in which measures are listed that need to be carried out regularly. These plans also form the basis for calculating the condominium's reserves.

Owners' meeting 

The annual owners' meeting is an important part of property management and must take place once a year. All owners of the community are represented at this meeting and also appoint the management by means of a corresponding resolution. If an administrator has already been appointed, they will also ensure that the owners' meeting is convened on time in subsequent years.

During the meeting, the property management company is responsible for taking the minutes, managing the meeting and ensuring that everything runs smoothly. However, the property management company does not have the right to vote, but is solely responsible for recording the resolutions and voting ratios. Every major refurbishment, modernization or renovation measure on the building must be presented at the annual meeting and approved by the majority of owners. Once a resolution has been passed, the management must implement it.

Conclusion on property management tasks

WEG management is responsible for building management where several owners jointly own a residential property, as defined in German residential property law. The WEG administration takes care of the technical, economic and commercial management of the homeowners' association as well as the creation and enforcement of house rules, whereby the WEG law forms the basis for proper administration.

The property manager of the WEG is appointed by a majority resolution at the owners' meeting and is responsible for tasks such as monitoring and collecting payments of house fees and drawing up a business plan and annual accounts. The WEG management is also responsible for determining requirements, commissioning and supervising repair and renovation measures. The management can offer the additional service of a janitor service, but this is not an obligatory task.

Why you need a good property management company

As the owner of a property or condominium, you can benefit from the services of a property management company.

• Relief: You are relieved of the day-to-day management of your property.
• Specialist knowledge: A property management company has extensive expertise in the field of real estate
• Cost optimization: A property management company can reduce your operating costs through targeted measures.
• Legal security: A property management company knows the relevant laws and regulations and protects your rights.

Whether you own a rented house, a condominium or a commercial property - a property management company can take on numerous tasks for you. We are happy to stand by your side.

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