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

Problem: On May 21, 2026, the Federal Court of Justice (BGH) (ref. I ZR 224/25) ruled that property managers are not permitted to charge a commission for arranging tenancy agreements from their own managed portfolio, and commissions already paid can be reclaimed.

Cause: Many management contracts listed re-letting as an extra commission-like remuneration alongside the basic fee, even though Section 2 (2) sentence 1 no. 2 WoVermittG completely excludes the apartment broker's entitlement to a fee if they are also the manager at the same time.

Thesis: The value of tenancy management lies in the process: anyone who manages their re-letting process 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 commission in tenancy management?

Direct Answer: On May 21, 2026, the BGH (ref. I ZR 224/25) ruled that property managers may not charge a commission for arranging tenancy agreements from their own managed portfolio, either from the tenant or from the owner. This affects tenancy management in the residential segment. Condominium (WEG) management, commercial properties, and sales are excluded. Commissions already paid can be reclaimed.

What the ruling says in concrete terms

With its judgment of May 21, 2026 (ref. I ZR 224/25), the First Civil Senate of the Federal Court of Justice clarified the legal situation for tenancy management. The legal basis is Section 2 (2) sentence 1 no. 2 of the German Apartment Brokerage Act (WoVermittG): An apartment broker is not entitled to fee payment if they are also 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 apartment seekers or also landlords and owners. The BGH followed the broad interpretation. The wording of Section 2 (2) sentence 1 no. 2 WoVermittG is clear: the apartment broker's entitlement to a fee is completely excluded. A limitation to claims against the apartment seeker cannot be derived from the law. In other parts of the WoVermittG, the legislator explicitly referred to claims against the apartment seeker, but in the provision relevant here, such an addition is missing.

2.2 What is affected, what is not: Tenancy management in the residential segment is affected if the manager brokers tenancy agreements at the same time. Pure condominium (WEG) management without tenancy brokerage, commercial properties, and sales are not automatically affected. Claims for reclaiming already paid commissions are subject to the standard limitation period according to Sections 195, 199 of the German Civil Code (BGB) (3 years from knowledge of the claim).

This article does not provide legal advice. Questions regarding contract design, reclaim risks, and the structure of your remuneration are best clarified with a specialist lawyer 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 method of remuneration that many management contracts contained as a supplement to the basic fee. That is a legal fact. The operational question resulting from this is different: How well is the re-letting process documented in your management and visible to owners?

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

Anyone who does not document the re-letting process has nothing to show in the event of a dispute or in discussions with owners. No listing timestamp, no structured applicant management, no selection protocol, no proof of the period from the initial inquiry to the signing of the contract. This is not a problem created by the ruling. It is a process risk made visible by the ruling.

How auditable 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 management company to look after 129 apartments and 134 garages in Düsseldorf and Essen, including the conclusion of tenancy agreements on her behalf. The management contract provided for a commission of two months' base rent for each new letting. For 13 new lettings, the management billed a total of 16,815.71 euros. The owner initially paid but demanded the money back after the end of the contract. The Higher Regional Court (OLG) Düsseldorf awarded her almost the entire amount. The BGH confirmed this decision.

How efficient is your re-letting process today? This refers to the complete workflow: publish listing, structure applications, check creditworthiness, coordinate viewings, prepare and sign the tenancy agreement. Anyone managing this process from within a system can shorten the duration of the procedure and prove every step; anyone coordinating it via email, Excel, and telephone can do neither. Vacancy reduction is a measurable achievement: if you cannot measure it, you cannot justify it either.

How do you document the re-letting performance to owners? Owners ask the same questions as always: How many applications were there? What were the decision criteria? When was the contract signed? Answering these questions from a system is substantially better than reconstructing them from email folders. Anyone 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 ruling has not yet been conclusively clarified by the highest court. This is a question for the specialist lawyer and the association. What already applies now: the more clearly and completely the process performed is documented, the better the service can be justified to owners, regardless of the specific remuneration model.

Conclusion

The BGH's ruling of May 21, 2026, is not a shock, but a signal. It makes visible what has long been true: property managers in the residential segment who brokered tenancy agreements and relied on commission-like remuneration were on shaky legal ground. The basis was Section 2 (2) sentence 1 no. 2 WoVermittG. The BGH has now conclusively answered this question.

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

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

What this means strategically

Management companies that deliver their re-letting service quickly, in a structured and transparent manner, differentiate themselves. This was true before the ruling. It is even more true after it.

The pressure is increasing primarily for management companies that have previously treated re-letting as an independent source of income alongside the basic fee, without structuring the process behind it. For management companies that have already fully documented their workflow and communicated it to owners, the initial situation 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 comprehensible discussion about performance and remuneration. This is not a new idea. The ruling gives it urgency.

What EverReal does (and what it does not)

EverReal runs the re-letting process as a guided workflow: from the inquiry through structured applicant management, credit checks, and viewing coordination to contract signing, all in one system with no switching between systems. Every step is documented, every decision is traceable. Owners receive an overview of the letting status at the touch of a button.

What EverReal does not provide: legal advice, interpretation of rulings in individual cases, contract drafting. For questions about the remuneration structure following the BGH ruling, a specialist lawyer for tenancy law is the right contact person.

Legal notice and sources

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

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

Q: What did the BGH rule on May 21, 2026, regarding commission in tenancy management? A: With its judgment of May 21, 2026 (ref. I ZR 224/25), the BGH decided that an apartment broker who is also the 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 ban applies not only to apartment seekers but also to the landlord and owner. Commission clauses in the management contract are therefore invalid. (Source: BGH, judgment of May 21, 2026, I ZR 224/25)

Q: Am I as a condominium (WEG) manager also affected by this ruling? A: The ruling directly affects tenancy management in the residential segment if the manager also acts as an apartment broker at the same time. Section 2 (2) sentence 1 no. 2 WoVermittG does not automatically apply to pure condominium management without a tenancy brokerage component. In the case of mixed activities consisting of condominium and tenancy management or in the case of individual property management, a legal review by a specialist lawyer for tenancy law or the responsible association is recommended.

Q: What happens to commissions that I have already received before the ruling? A: In the specific case, the OLG Düsseldorf ordered the return of 16,815.71 euros to the owner, which she had paid as commission for 13 new lettings (two months' base rent each). The BGH confirmed this. In principle, a risk of reclaim exists for commissions paid in the past. The limitation period is based on Sections 195, 199 BGB (3 years from knowledge of the claim). A specialist lawyer for tenancy law is responsible for an individual assessment.

Q: How can I still have the re-letting service remunerated now? A: The ruling makes it clear that an extra commission-like fee for brokerage activities from one's own managed portfolio is impermissible. Remuneration for re-letting services must be clearly structured as part of the management fee. The concrete legal structure in individual cases has not yet been conclusively clarified by the highest court. For contract drafting, please contact a specialist lawyer for tenancy law or the VDIV or IVD.