No Entitlement of a Property Manager to Payment of a Brokerage Commission When Brokering Managed Rental Apartments (BGH Judgment I ZR 224/25)

A residential letting agent is entitled to a commission from neither the tenant nor the landlord if a lease agreement is concluded for an apartment of which the agent is the property manager. The tenant may also be unjustifiably burdened when it is the landlord who owes the letting agent a commission – at least where the agent simultaneously acts as the property manager of the apartment and is thus closely economically connected to the landlord.

I. Facts of the Case

The plaintiff (owner) entrusted the defendant, by contract dated July 13, 2020, with the management of 129 residential units and 134 garages. The property management agreement encompassed ongoing management, including the conclusion of lease agreements in the plaintiff's name. The monthly management fee amounted to EUR 24 per residential unit and EUR 4 per garage, in each case plus VAT.

In addition, the agreement provided for a supplementary new-letting commission in the amount of two months' net cold rent (plus VAT), capped at EUR 10,000 gross per year.

On this basis, the defendant brokered 13 new lettings and invoiced a total of EUR 16,815.71 in commissions. Following termination of the property management agreement, the plaintiff demanded repayment of the commissions paid. The Regional Court of Krefeld (LG Krefeld) largely dismissed the claim (only EUR 149.51 was recognized). The Higher Regional Court of Düsseldorf (OLG Düsseldorf) allowed the claim on appeal and awarded the plaintiff EUR 16,666.20 plus interest. The Federal Court of Justice (Bundesgerichtshof – BGH) upheld the decision of the Higher Regional Court; the defendant's appeal on points of law was unsuccessful.

II. The Decision of the BGH

The plaintiff has a claim for restitution of the brokerage commissions paid against the property manager, as the commission agreement violates the WoVermittG (Wohnungsvermittlungsgesetz – German Housing Brokerage Act). The German Housing Brokerage Act aims to protect tenants and prospective tenants from unjustified burdens and conflicts of interest – without being limited to commission agreements with the prospective tenant themselves. In the present case, this means that the agent has no entitlement to a brokerage commission against the landlord either; the new-letting commission agreed in the property management contract is void pursuant to § 2 Abs. 2 S. 1 Nr. 2 Var. 2 in conjunction with § 2 Abs. 5 Nr. 1 WoVermittG. The commissions received by the property manager without legal basis must be repaid in full to the landlord under § 812 Abs. 1 S. 1 BGB (Bürgerliches Gesetzbuch – German Civil Code).

The BGH based its decision on a comprehensive interpretation of § 2 Abs. 2 WoVermittG. § 2 Abs. 2 S. 1 Nr. 2 Var. 2 WoVermittG is formulated in general terms – without restriction to claims against the prospective tenant. This stands in contrast to § 2 Abs. 1a, 3 WoVermittG, which explicitly refer to the prospective tenant. From this, the BGH infers that the legislature intentionally adopted a more comprehensive regulation in Abs. 2. Accordingly, a teleological reduction of the provision is also not warranted.

The WoVermittG pursues the objective of protecting tenants from unjustified burdens and creating market transparency. The BGH emphasizes that the economic position of the tenant may also be indirectly weakened when it is not the tenant themselves but the landlord who owes the commission. In the typical scenario – where the property manager and the letting agent are one and the same person – there is a risk that the landlord will pass on the incurred fees to the tenant by way of a higher rent.

III. Conclusion and Recommendations for Action

The BGH's decision provides legal clarity: residential letting agents who simultaneously act as property managers of the brokered apartment have no entitlement to a commission – not even against the landlord.

The decision primarily affects institutional owners – asset managers, capital management companies, and alternative investment funds (AIFs) – that hold residential real estate portfolios and commission their property managers to also handle new lettings.

A significant need for adjustment arises with respect to existing property management agreements, as commission, special remuneration, and success fee clauses for the brokerage of managed residential premises are void under the WoVermittG. Existing remuneration structures should be restructured accordingly.

In addition, any existing restitution claims for commissions wrongfully paid in the past must be asserted in a timely manner – taking into account the applicable limitation periods.