If property management does not work, it will be expensive: IVD Nord warns of structural risks for owners
Increasing regulatory requirements, growing bureaucratic effort, a shortage of skilled workers and increasing pressure to modernize are pushing many property management companies to their limits. The structural challenges in the industry are no longer just affecting management companies themselves, but increasingly property owners are also feeling the consequences. If tasks are no longer completed on time, this has a direct impact on communities of owners and the value retention of real estate.
From the IVD Nord’s point of view, these bottlenecks are not due to deficits within the administrations, but are the result of growing regulatory requirements and an ongoing intensification of administrative processes. This makes efficient administrations all the more important in an increasingly complex environment: they ensure the ability of owners’ associations to act through expertise, structure and reliability and make a significant contribution to the sustainable preservation of the value of real estate.
Anika Schönfeldt-Schulz, Chairwoman of IVD Nord, explains: “Many owners underestimate the central role that a functioning administration plays for their property. If resolutions are not implemented, renovations are delayed or deadlines are missed, financial disadvantages quickly arise and, in the worst case, the value of the property falls.”
However, it is already evident that smaller condominium owners’ associations in particular, but increasingly also larger ones, are having difficulties finding qualified administrators. According to IVD Nord, this development will continue to intensify, as the increasing requirements and liability risks make it increasingly unattractive to take on new mandates.
“We are experiencing a development in which administrations are supposed to take on more and more responsibility without the framework conditions being adjusted accordingly. This is not sustainable for either the companies or the owners,” says Carl-Christian Franzen, deputy chairman of the IVD Nord for Hamburg.
The IVD Nord warns against viewing the problem as a purely industry issue. The increasing overload of administrations is already leading to selectively reducing stocks or no longer taking on mandates. This development will have significant consequences for owners and will have a noticeable impact on the real estate market as a whole – from growing renovation backlogs to rising costs and a declining willingness of private owners to invest.
Tenants are also affected by this development: it not only affects the quality of living in existing buildings, but also has a long-term impact on new buildings, as new properties are also dependent on efficient administrations.
The IVD Nord is therefore calling for better political and economic conditions for the industry. These include, in particular:
a realistic definition and remuneration of management services, legal requirements that are more oriented towards practical feasibility, less bureaucratic burdens for owners and thus for property managers.
“Professional property management is not an optional service, but a central component of functioning housing markets. If you want to strengthen property, you also have to secure the structures behind it,” Schönfeldt-Schulz concluded.
