An investment controversy has emerged as property management firms have allocated apartment owners’ savings into high-risk bonds without consent, prompting legal concerns and potential criminal complaints from affected owners. The insolvency proceedings against Kallmeyer und Nagel reveal significant sums tied up in questionable investments, with investigations ongoing into Deutsche Rücklagen’s operations. Compliance issues regarding the secure investment of maintenance reserves raise further alarm, as authorities review numerous complaints from owners’ associations across Germany.
Investment Controversy Sparks Concern Among Apartment Owners
Multiple property management firms have put the savings of apartment owners into high-risk bonds, amounting to millions of euros. Research conducted by BR and HR reveals that owners’ associations across ten federal states are now anxious about the safety of their funds.
Matthias Mitze is holding a subscription certificate for a bond issued by DR Deutsche Rücklagen GmbH, valued at approximately 200,000 euros. His property management company, Kallmeyer und Nagel Vermietungs und Verwaltungs GmbH, has made questionable investments in bonds for the apartment owners’ association (WEG) in Hamburg without obtaining consent from the owners. In response, Mitze and his neighbors are preparing to file a criminal complaint.
“The funds originated from a loan we secured for renovation projects, meaning we might end up repaying it twice,” he explains.
More than 20 WEGs managed by Kallmeyer und Nagel have sought the expertise of Hamburg lawyer Ulrich Husack, who estimates that discussions have involved around seven million euros.
Legal Troubles for Property Management Company
On January 22, 2025, the Hamburg District Court initiated preliminary insolvency proceedings against Kallmeyer und Nagel. Just a week later, the management firm notified its clients and the public that WEG funds had been allocated to bonds from Deutsche Rücklagen.
According to findings by BR and HR, the sums involved are substantial, with some cases in Hamburg reaching up to 500,000 euros, while WEGs in Pinneberg, Schleswig-Holstein, and Eschborn, Hesse, have reported slightly lower amounts. One WEG in Seevetal, Lower Saxony, is worried about 900,000 euros, and a significant property in Cologne estimates that over 1.5 million euros in savings are tied up in Deutsche Rücklagen bonds.
In Germany, property managers oversee billions of euros in funds from property owners. Affected WEGs span ten federal states, including Hamburg, Lower Saxony, Schleswig-Holstein, North Rhine-Westphalia, Berlin, Saxony-Anhalt, as well as Bavaria, Baden-Württemberg, Hesse, and Rhineland-Palatinate.
The Federal Financial Supervisory Authority (BaFin) has prohibited Deutsche Rücklagen from continuing its lending operations, leaving the full extent of the situation unclear.
DR Deutsche Rücklagen GmbH has reportedly issued four bonds, targeting a total volume of 141 million euros, though it remains uncertain how many of these bonds were actually subscribed. Research indicates that Kallmeyer und Nagel subscribed to bonds maturing in 2031 in June 2024, even after BaFin had prohibited Deutsche Rücklagen from conducting its lending business in March 2024.
In 2023, BR and HR first uncovered risky transactions involving apartment owners’ savings, raising numerous questions about the management of these funds.
Recent investigations have revealed a corporate network seemingly created to manage WEG funds, with Report München noting significant economic and personal connections between the shareholders of DR Deutsche Rücklagen GmbH and the property management companies within the Consigma Group.
Formerly, Deutsche Rücklagen’s website suggested that two managers were primarily overseeing the network, both of whom have since distanced themselves from management roles. The network appears to be disintegrating, and Deutsche Rücklagen has failed to repay either terminated bonds or interest owed to the WEG known to BR and HR in the past year.
On February 13, Deutsche Rücklagen scheduled a meeting for creditors at its Frankfurt headquarters, as noted in the Federal Gazette. The agenda includes proposals to amend bond conditions, offering creditors options such as interest changes and extended terms.
Connections to Kallmeyer und Nagel have also been identified: one managing director previously served as a consultant for the Consigma Group and has signed subscription certificates for Deutsche Rücklagen bonds.
Meanwhile, investigations continue into former entrepreneur Benko, who remains in custody and faces scrutiny across multiple European nations. He has denied all accusations made against him.
The insolvency administrator for Kallmeyer und Nagel has engaged a PR agency for communication, stating they are currently unable to provide comments on the situation. The current managing director of Deutsche Rücklagen has emphasized that he has only temporarily assumed the role and cannot discuss internal matters, asserting that no funds have been misused contrary to bond conditions.
Legal Framework and Compliance Issues
According to WEG law and relevant jurisprudence, maintenance reserves—essentially savings from WEG—must be securely invested and readily available. Experts have indicated that neither requirement is satisfied with DR Deutsche Rücklagen GmbH’s bonds. Initial judgments echo this concern.
Property management companies involved have not obtained the necessary consent from all owners for these unconventional investments, leading many apartment owners to feel misled as the nature of these investments was reportedly concealed.
The Frankfurt public prosecutor’s office is now investigating allegations of sham self-employment within Germany’s largest real estate agency. Since December 2024, they have consolidated investigations from various states, with Chief Public Prosecutor Dominik Mies confirming that criminal complaints from over 20 apartment owners’ associations are currently under review.
As the situation develops, BR and HR continue to follow this unfolding story closely, with updates anticipated in the coming weeks.