Federal Court of Justice (BGH) ruling on commission in property management: What managers need to know now

Problem: On May 21, 2026 (Case No. I ZR 224/25), the Federal Court of Justice (BGH) ruled that property managers may not charge a commission for brokering leases from their own managed portfolio, and commissions already paid can be reclaimed.

Cause: Many property management contracts included re-letting as a commission-like extra remuneration alongside the base fee, even though Section 2 (2) sentence 1 no. 2 of the German Housing Brokerage Act (WoVermittG) entirely excludes the housing broker's entitlement to remuneration if they are also the property manager.

Thesis: The value of rental property management lies in the process: Those who manage their re-letting workflow in a structured, transparent, and fully documented manner can justify their performance to owners, regardless of the specific remuneration model.

What did the BGH rule regarding commissions in rental property management?

Direct answer: On May 21, 2026 (Case No. I ZR 224/25), the BGH ruled that property managers may not charge a commission for brokering leases from their own managed portfolio, neither from the tenant nor from the owner. This affects rental property management in the residential sector. HOA/condominium management (WEG), commercial property, and sales are excluded. Commissions already paid can be reclaimed.

What the judgment specifically states

With its judgment of May 21, 2026 (Case No. I ZR 224/25), the First Civil Senate of the Federal Court of Justice clarified the legal situation for rental property management. The legal basis is Section 2 (2) sentence 1 no. 2 of the Housing Brokerage Act (WoVermittG): A housing broker has no right to remuneration if they are simultaneously the manager of the brokered apartment.

2.1 The decisive point compared to previous case law: It was disputed whether the commission ban only protects housing seekers or also landlords and owners. The BGH adopted the broad interpretation. The wording of Section 2 (2) sentence 1 no. 2 WoVermittG was clear: The housing broker's claim to remuneration is excluded in its entirety. A limitation to claims against the housing seeker cannot be inferred from the statute. In other parts of the WoVermittG, the legislature expressly referred to claims against the housing seeker; in the provision relevant here, such an addition is absent.

2.2 What is affected, what is not: Affected is rental property management in the residential sector if the property manager brokers leases at the same time. Not automatically affected are pure HOA/condominium management without lease brokerage, commercial property, and sales. Reclamation claims for commissions already paid are subject to the standard limitation period under Sections 195, 199 of the German Civil Code (BGB): three years, starting at the end of the year in which the claim arose and the owner obtained knowledge of the circumstances giving rise to the claim or should have obtained it without gross negligence.

This article does not provide legal advice. Questions regarding contract drafting, reclamation risks, and the structure of your remuneration are best clarified with a specialist attorney for tenancy law or your real estate association (VDIV, IVD).

Why this is a process issue, not just a legal issue

The ruling eliminates a remuneration avenue that many property management contracts contained as a supplement to the base fee. That is a legal fact. The operational question arising from this is different: How well is the re-letting process documented in your property management and made visible to owners?

The BGH identifies the management activity itself as a legitimate framework for value creation. What is not permitted is a commission-like extra remuneration for brokerage services from the manager's own portfolio. What remains permitted and sensible: providing and justifying re-letting as a clearly defined, documented management service.

Those who do not document the re-letting process have nothing to show in the event of a dispute or in discussions with owners. No listing timestamp, no structured applicant management, no selection record, no proof of the timeframe from initial inquiry to contract signing. This is not a problem created by the judgment. It is a process risk that the judgment exposes.

How audit-proof is your re-letting process today? You can find the Compliance Maturity Check here: Compliance Maturity Check

The case before the BGH

The underlying facts: An owner had commissioned a property management company to manage 129 apartments and 134 garages in Düsseldorf and Essen, including concluding rental contracts in her name. The property management contract provided for a commission of two months' cold rent for each new lease. For 13 new leases, the property management billed a total of 16,815.71 euros. The owner paid initially, but demanded the money back after terminating the management contract. The Regional Court of Krefeld initially awarded her only a small partial amount and dismissed the remainder of the action. Upon her appeal, the Higher Regional Court of Düsseldorf ordered the property management company to pay the remaining amount, so that in the end she received back the full 16,815.71 euros. The BGH upheld this decision and dismissed the property management's appeal on points of law.

How efficient is your re-letting process today? This refers to the complete procedure: placing listings, structuring applications, checking creditworthiness, coordinating viewings, preparing and signing leases. Those who run this process from a single system can shorten the duration of the procedure and document the process; those who coordinate it via email, Excel, and phone can do neither. Vacancy reduction is a measurable service: If you cannot measure it, you cannot justify it.

How do you document the re-letting service to owners? Owners ask the same questions as always: How many applications were received? What criteria were used to make the decision? When was the contract signed? Answering these questions from a system is substantially better than reconstructing them from email folders. Those who cannot demonstrate their own performance will find it difficult to negotiate its value.

How is re-letting anchored in your remuneration? How remuneration can be structured in individual cases following the judgment has not yet been definitively clarified by the highest court. This is a question for specialist attorneys and the association. What already applies now: The clearer and more complete the documentation of the delivered process, the better the service can be justified to owners, regardless of the specific remuneration model.

Conclusion

The BGH judgment of May 21, 2026, is not a shock, but a signal. It brings to light what has long been true: Property managers in the residential sector who brokered leases and relied on commission-like remuneration were standing on shaky legal ground. The basis was Section 2 (2) sentence 1 no. 2 WoVermittG. The BGH has now answered this question definitively.

The value of rental management lies in the process. Those who run their re-letting workflow in a structured, transparent, and fully documented manner hold an advantage that no court ruling can take away.

Schedule a demo: How EverReal supports your re-letting process efficiently and with full documentation.

What this means strategically

Property managers who deliver their re-letting services quickly, in a structured way, and transparently set themselves apart. That was true before the ruling. It holds even more true after it.

Pressure is mounting especially for management companies that have treated re-letting as a separate revenue stream alongside the base fee without structuring the process behind it. For property managers who have already documented their workflow completely and communicated it to owners, the starting position hardly changes.

A clearly managed process from the initial inquiry to the signed contract reduces vacancy, creates owner transparency, and forms the basis for a coherent discussion about performance and remuneration. This is not a new idea. The ruling adds urgency to it.

What EverReal delivers (and what it doesn't)

EverReal runs the re-letting process in clear steps: from the inquiry through structured applicant management, credit checks, and viewing coordination, right up to contract signing, fully digital and without media breaks. Applications and checks remain traceable in the system. You can see the letting status in the system at any time.

What EverReal does not deliver: Legal advice, interpretation of rulings in individual cases, contract drafting. For questions regarding remuneration structures following the BGH ruling, a specialist attorney for tenancy law is the right contact.

Legal Notice and Sources

We do not provide legal advice. Property managers are best advised to clarify specific legal questions with a specialist attorney or their professional association (VDIV, IVD).

Sources:- BGH, Judgment of May 21, 2026, Case No. I ZR 224/25 (bundesgerichtshof.de, PDF available)- beck-aktuell, June 22, 2026: "Wohnungsvermittlung: Provisionsverbot für Verwalter schützt auch den Vermieter" (beck-aktuell.de)- § 2 para. 2 sentence 1 no. 2 WoVermittG (gesetze-im-internet.de)- §§ 195, 199 BGB, Standard limitation period (gesetze-im-internet.de)- IVD Federal Association: Assessment of BGH case law on commission prohibition (ivd.net)

Q: What did the BGH decide on May 21, 2026, regarding commissions in rental property management?A: In its judgment of May 21, 2026 (Case No. I ZR 224/25), the BGH decided that a housing broker who is simultaneously the property manager of the brokered apartments is not entitled to a commission. The legal basis is Section 2 (2) sentence 1 no. 2 WoVermittG. The commission prohibition applies not only towards housing seekers, but also towards the landlord and owner. Commission clauses in property management agreements are therefore invalid. (Source: BGH, Judgment of May 21, 2026, I ZR 224/25)

Q: As an HOA/condominium manager (WEG-Verwalter), am I also affected by this ruling?A: The ruling directly affects rental property management in the residential sector when the property manager acts simultaneously as a housing broker. For pure HOA/condominium management without a lease brokerage component, Section 2 (2) sentence 1 no. 2 WoVermittG does not automatically apply. In the case of mixed activities combining HOA and rental management or separate-unit management (Sondereigentumsverwaltung), a legal review by a specialist attorney for tenancy law or the relevant association is recommended.

Q: What happens to commissions that I already received before the judgment?A: In the specific case, the property management ultimately had to repay the owner the full 16,815.71 euros that it had received as commissions for 13 new leases (two months' cold rent each). The Regional Court of Krefeld had initially awarded her only a small partial amount. On appeal, the Higher Regional Court of Düsseldorf awarded her the remaining amount. The BGH confirmed this and dismissed the property management's appeal on points of law. The risk of claims for the return of commissions paid in the past exists in principle. The limitation period is governed by Sections 195, 199 BGB: three years, starting at the end of the year in which the claim arose and the owner obtained knowledge of the circumstances giving rise to the claim or should have obtained it without gross negligence. For an individual assessment, a specialist attorney for tenancy law is responsible.

Q: How can I still get paid for re-letting services now?A: The ruling makes it clear that commission-like extra remuneration for brokerage activities from one's own managed portfolio is impermissible. Remuneration for re-letting services must be clearly structured as part of the property management fees. The specific legal structuring in individual cases has not yet been definitively clarified by the highest court. For contract drafting, please contact a specialist attorney for tenancy law or the VDIV or IVD.