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What does a property manager actually do?

What does a property manager actually do? “Aside from creating a lot of bother”, is how some might well spontaneously extend this question. Irrespective of whether they’re the property owner or the tenant. One side wants the greatest possible return with minimum effort, whilst the other side wants a functioning apartment with as few ancillary costs and maintenance hassles as possible. Property management is “stuck” somewhere in the middle, being expected to safeguard everyone’s interests in the sense of an attractive rental/residential property. A field of activity that harbours huge potential for conflict and demands a great deal of responsibility.

Property management in Austria: Tasks, obligations and a lot of work

In Austria, the duties of a property manager are legally established in the case of privately owned properties. The applicable law is the Property Ownership Act (Wohnungseigentumsgesetz, WEG). Essentially, this says that the manager of a property must represent the interests of the owner vis-à-vis third parties, in the most economical and expedient way possible. The WEG then goes further and specifically organises the tasks and obligations of a property manager into the following four areas:

  • Maintenance and renovation
  • Cost calculation and reserves
  • Duty of information and transparency
  • Property owners’ meetings

The tasks envisaged by the legislator are extremely diverse, spanning the timely execution of maintenance measures (e.g. refitting of windows, repairing water damage), the oversight and care of the property and external premises with corresponding assignment of repair work (e.g. on electrical, water and gas lines or lifts), the invoicing of operating costs and calculation of heating and hot water costs, the formation of reserves, the duty of information vis-à-vis all owners, an annual projection of any renovation measures due and, every two years at least, the convening of a property owners’ meeting to provide information on the state of the property, changes in costs and future investments. In doing so, the property manager always also functions as a discussion platform for complaints and problems, thus placing property management in the role of problem-solver. This obviously often involves having to come up with compromises, and not every individual interest can be guaranteed 100%.

Management in the case of rental properties

Generally speaking, these tasks also apply in the case of rental properties. However, there are no statutory requirements for rental properties like those under the WEG; rather, contractual arrangements are made between the property owner and the property manager. It is the property management’s task to represent and enforce the interests set down in these arrangements vis-à-vis the tenant. In principle, the tasks and obligations are the same as with owner-occupied properties but with deviations and/or restrictions in the area of the transfer of operating costs and dispute resolution.

What does property management cost?

In terms of costs, the legislator swaps position: these are regulated in the area of rent when it comes to tenancy but for private ownership there are no statutory requirements nor fixed rates; rather, the “normal” contractual factors such as size and number of properties, location or, for example, common areas that are also to be managed are decisive here. As a guide: a price of between €3.00 and €3.60 per m²/year is currently taken as a costings basis for property management in the private ownership segment in Austria. In the case of rental properties, the Austrian Tenancy Act (Mietrechtsgesetz) (Section 6 Remuneration Guidelines Regulation) regulates the rate at an annual €3.80 per m² (as of: 09/05/2022). Limited-profit housing associations are an exception: in this case, the Remuneration Guidelines Regulation (ERVO) applies. This states that the management costs for a limited-profit housing association are levied annually taking the average rate of change of the consumer price index of the previous year into account.

And: which property management is the right one?

This is a question that property owners and especially project managers should ask themselves at as early a stage as possible. The range on offer is huge and, despite the complexity of the duties to be covered, there are many both large and small service providers who know their business inside and out. If you are talking to your project developer or redevelopment company in the course of a – larger – investment project, take the time to also discuss the later technical and commercial management of your property. At WEGRAZ, this holistic philosophy applies here too: when we execute a project, then we also know who we can recommend for the utilisation, supervision and management. In our case, this is Immobilienverwaltung Seria. Decisive factors for us are unfailing reliability, perfect service and legally compliant implementation. After all, a property will make a truly profitable venture only when it is properly maintained and its potential marketed appropriately. Ultimately, the choice of the right property manager is a question of trust – as is the choice of the right project and property developer.