Property management companies that also act as estate agents forfeit their entitlement to commission. The Federal Court of Justice clarified this in a judgement dated 21 May 2026 (BGH, Case No. I ZR 224/25). The ruling applies not only to commissions paid by tenants, but also, explicitly, to those paid by landlords to the property manager.
What had happened?
A property owner had transferred around 129 residential units to a property management company. The management contract stipulated that the management company was also to find new tenants and, in return, receive a commission of two months’ basic rent for each new tenancy, capped at 10,000 euros per year. Over the course of three years, 13 flats were let to new tenants, and the owner paid a total of around 16,800 euros in commission. Upon the contract’s expiry, she demanded the money back.
Whilst the Krefeld Regional Court (judgement of 22 May 2024, ref. 7 O 15/24) still rejected the claim for repayment, the Düsseldorf Higher Regional Court (judgement of 24 October 2025, Case No. 7 U 101/24) and, finally, the Federal Court of Justice (BGH) ruled in favour of the owner.
The legal basis
The Housing Agency Act (WoVermittG) is the relevant legislation. Section 2(2), first sentence, point 2 of this Act excludes any entitlement to commission if the housing agent is also the property manager. Until the Federal Court of Justice (BGH) ruling, it was disputed whether this prohibition applied only to tenants or also to landlords.
The Federal Court of Justice has now taken a clear stance: as the provision does not expressly refer to the concept of a person seeking accommodation, it is deliberately worded in broader terms. The court justifies this on the grounds that, from an economic perspective, a landlord could pass on the agency fees to the tenant via the rent. This would mean that the tenant would, after all, bear the cost of the commission indirectly – which is precisely what the legislature sought to prevent.
What does this mean in practice?
For property management companies that have hitherto received commissions for brokering flats from their portfolio, the consequences are significant. Commissions already paid may be reclaimed, with retroactive effect within the statutory limitation period. This period is three years, calculated from the end of the year in which the claim arose and the landlord was aware of it or could have been aware of it.
In the case of large property portfolios with regular new lettings, this can quickly result in five- or six-figure recovery amounts.
Exception: WEG administrator
According to established case law of the Federal Court of Justice (BGH), anyone who manages solely the common property of a flat owners’ association is not regarded as the manager of the individual flats. Such flat owners’ association managers may, in principle, continue to charge a commission for brokering the sale of flats within their development. However, the precise contractual arrangements in each individual case are also decisive here.
Beware of attempts to circumvent the rules
According to the Federal Court of Justice (BGH), anyone who attempts to circumvent the ban on commissions by increasing the administrator’s ongoing remuneration or by outsourcing brokerage activities to a subsidiary will fall into the next trap. The law expressly covers economically interlinked companies as well, and hidden commission agreements are invalid in their entirety.
Action required by property managers and owners
Existing property management contracts containing commission clauses for new tenancies should be reviewed as a matter of urgency and, where necessary, renegotiated. This requires a delicate touch, as raising the issue openly with landlords may be the first time they become aware of potential claims for repayment. Anyone wishing to err on the side of caution should seek legal advice.
Source: Haufe: Property
This post and the accompanying image were created with the help of AI and have been editorially reviewed.
