Regional Court Frankfurt am Main, 31.08.2020, Ref.: 2-13 S 87/19
In principle, property managers can resign from office at any time. It is not necessary to convene a meeting of the community of owners to resign, but it should be noted that resignation can lead to claims for damages if it is untimely or if it is in breach of the management contract.
In the case discussed here, the community of owners did not want to accept the resignation of the property manager and appealed against the dismissive decision of the local court to the Frankfurt am Main Regional Court.
Initial situation: Dispute within a 2-person WEG
The plaintiff, a co-owner in a two-person condominium owners' association (WEG), sued the defendant, who acted as the property manager for the WEG. There was a dispute as to whether the defendant had actually been appointed as manager, as there was only a "property management contract" which named the owners' association as the client. The plaintiff demanded that an owners' meeting be convened to decide on the dismissal of the defendant. The action was filed with the local court on 14 September 2018 and served on the defendant on 30 October 2018.
In the meantime, the defendant had declared the termination of the property management contract in a letter dated 17 September 2018 and announced his "immediate resignation from the position of property manager". A new property manager was chosen and the plaintiff sold her flat. The plaintiff then requested that the legal dispute be declared settled, as the main matter had been settled by the defendant's resignation.
Decision of the Local Court
The local court dismissed the plaintiff's claim as it assumed that the defendant was not the administrator and therefore had no grounds for dismissal. This was justified by the fact that the property management contract was not a sufficient basis for the appointment as administrator. In addition, the defendant's resignation from office took effect before the action was served, which is why there was no longer any interest in legal protection for a meeting to dismiss him.
Appeal by the plaintiff
The plaintiff appealed against the judgement of the district court, as she continued to seek a declaration that the legal dispute had been settled. However, the Regional Court of Frankfurt am Main ruled that the appeal had no prospect of success. It saw no reason to hear the case further in order to further develop the law or to ensure uniform case law.
What was important here was the fact that the "finalising event", i.e. the defendant's resignation from office, had already occurred before the action was served. This meant that the defendant was no longer in office at the time the action was filed, meaning that there was no need for legal protection for an action to convene a meeting to dismiss the administrator.
Legal basis for resignation
The court clarified that an administrator of a condominium owners' association can resign from office at any time without any special requirements being necessary. The resignation from office is effective as soon as it is received by the other party - in this case, the plaintiff. In this case, the resignation from office took place on 17 September 2018, when the corresponding letter was received by the plaintiff's lawyer. The court denied whether the resignation from office should have been declared at an owners' meeting, as it was of the opinion that the declaration could also be made to an individual owner.
The effectiveness of the resignation from office is not dependent on whether the property management contract is also terminated. The cancellation of the contract does not affect the question of whether the office of property manager has been effectively resigned. This distinction is important, as the office of property manager and the underlying contract must be considered separately in legal terms.
Result and legal classification
The Regional Court ruled that the defendant's resignation from office had already taken effect before the action was served and that it was therefore no longer possible to establish a procedural settlement of the legal dispute. This is in line with the case law of the Federal Court of Justice, according to which it is not possible to establish settlement if the settling event - in this case the resignation from office - occurred prior to the lis pendens.
In this case, the plaintiff should have withdrawn the action, but did not do so. The court emphasised that the proceedings should have been brought to an end by withdrawing the action, which would have been the correct course of action in accordance with Section 269 (3) sentence 3 ZPO. As this was not done, the action was to be dismissed on the merits.
In summary, the Regional Court found that the defendant had effectively resigned from office and that no further legal action was necessary against him.
Source: District Court of Frankfurt am Main
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