“Is our manager receiving a salary, is this legal?”, “Does a unit owner manager pay dues?”, “Can money be withdrawn from the treasury without a general assembly decision?” These questions arise in almost every general meeting of unit owners. Unlike company law, the Condominium Law (KMK) adopts it as a “rule” that the manager’s labor should not go unrewarded; however, it ties this right to specific conditions and status. In this article, we examine the manager’s right to remuneration, the legal exemption granted to managers elected from among the unit owners, the limits of this exemption, the fate of money taken without a general assembly decision, and the tax implications, within the framework of KMK art. 40.

Brief Summary

The manager may request “a reasonable fee” from the unit owners, even if no fee is determined in the management plan or contract (KMK art. 40/3).

A manager elected from among the unit owners, unless there is a contrary decision, does not participate in half of the normal management expenses (KMK art. 40/4). This is a legal right that does not require a decision.

This 50% exemption is only for normal (operating) expenses; the manager also participates in extraordinary/structural and fixture expenses in proportion to their land share (KMK art. 20).

The concept of “attendance fee” is not mentioned in the KMK; the law only refers to “remuneration”.

If an additional fee/salary is requested beyond the exemption, it must be included in the management plan or determined by a decision of the board of unit owners. Money taken without a decision may lead to a refund and penal risk.

1. Legal Basis: KMK art. 40

The financial rights of the manager are regulated in Article 40 of the Condominium Law No. 634. The relevant paragraphs of the article state the following: Even if a fee is not stipulated in the management plan or in the contract made with them, the manager may demand a suitable fee from the flat owners. The board of flat owners decides whether the manager appointed from among the flat owners will participate in the normal management expenses, and if so, to what extent; if no decision is made in this regard, the manager does not participate in half of the normal management expenses allocated to them during the management period. The official text of the article can be accessed on the KMK page No. 634 on mevzuat.gov.tr.

Furthermore, in accordance with Article 40/1, the manager has “the rights of an agent as a rule” ; meaning that as a result of the agency relationship in KMK Article 38, they can demand remuneration for their labor.

2. “Attendance Fee” or “Remuneration”? A Conceptual Clarification

Although commonly referred to as “huzur hakkı” (attendance fee) in practice, this term is not found in the Condominium Law (KMK). “Huzur hakkı” is essentially a concept belonging to company law (Turkish Commercial Code – TTK). The KMK, however, explicitly states “ücret” (fee/remuneration). This distinction is important: In condominium ownership, the payment made to the manager is, by its legal nature, a manager’s fee; referring to the concept as “huzur hakkı” does not change the basis of the payment or its tax implications.

3. Dual Distinction According to the Manager’s Status

The Condominium Law (KMK) outlines a different framework depending on whether the manager is a flat owner or not:

a) Manager Appointed from Outside (Non-Flat Owner)

For a professional/externally appointed manager, there is no question of “dues exemption”; because they are not already a flat owner. This manager is paid a fee . Even if a fee is not specified in the management plan or contract, they can demand “a reasonable fee” for the service provided (CCP Art. 40/3); in case of dispute, the court can determine the fee.

b) Manager Selected from Among Flat Owners

This manager benefits from a special advantage granted by CCP Art. 40/4: Unless the board of flat owners decides otherwise, they do not contribute to half of the normal management expenses allocated to them during their term of management. This is a right arising directly from law , not requiring an additional general assembly decision. The board can abolish, reduce, or increase the exemption if it wishes; but if no decision is made, the statutory 50% exemption automatically applies.

An important limit: This right is granted only to the manager ; the assistant manager does not have the right to claim such a fee/exemption.

4. Limit of Manager’s Exemption: Normal Expenses or Extraordinary Expenses?

The 50% exemption does not apply to every item. The distinction is as follows:

Normal (operating) management expenses: Daily operating items such as doorman/attendant salary, cleaning, common electricity-water, elevator periodic maintenance, and management expenses. The exemption applies to these.

Extraordinary and structural/fixture expenses: Large investment items such as roof insulation, exterior facade renovation/sheathing, elevator motor replacement. Including the manager, for these, all co-owners participate in proportion to their land share (Article 20 of the Condominium Law); the manager cannot receive an exemption for these expenses.

Similarly, obligations arising from the status of co-owner (insurance premium, DASK, property tax) are also binding on the manager.

The 18th Civil Chamber of the Supreme Court, E. 2013/10122, K. 2013/11165, 10.09.2013. The exemption in the last paragraph of Article 40 of the Condominium Law and the common expense obligation in Article 20 have been evaluated together; it has been established that if there is no decision to the contrary, a manager appointed from among the co-owners will not participate in half of the normal management expenses, whereas all co-owners are responsible for the common expenses of the main property.

5. Can Fees/Money Be Collected Without a General Assembly Decision?

No. If there is a cash fee or additional payment other than the legal 50% exemption, it must either be included in the management plan or determined by a decision of the board of co-owners. The manager cannot unilaterally make a payment saying, “I am the manager, my fee is this much.” Fee or exemption:

It must be discussed at the co-owners’ board meeting and decided upon and recorded in the minutes book,

It must be shown as an “manager expense/personnel expense” item in the estimated budget (operating plan) so that dues are collected accordingly.

The manager accruing money to himself/herself from the site/apartment fund without a board decision is considered unlawful and may, depending on the situation, bring up the discussion of abuse of trust or embezzlement. Unit owners can sue for the repayment of unlawfully taken amounts with legal interest.

Example fee/exemption clause to be recorded in the minutes book:
“It has been decided by the board of unit owners that Manager … shall be completely exempted from normal management expenses throughout his/her term of office and/or be paid a net monthly fee of … TL as remuneration for his/her duties; and that this amount shall be shown under the ‘manager expense’ item in the operating budget.”

6. Principle of Offset: What Happens to Money Taken Without a Decision?

In cases where the manager, who is also a unit owner, receives payment from the site account without a general assembly decision, the approach followed in practice is as follows: First, the amount corresponding to the 50% expense exemption already entitled to the manager according to Article 40/4 of the Condominium Law (KMK) is calculated. If the money actually received by the manager exceeds this statutory exemption amount, the exceeding part becomes legally unfounded and its repayment comes into question. Therefore, in disputes, the court must determine the exemption amount and the exceeding part by examining the management plan, the minutes book, and the manager’s status as a unit owner.

7. Tax Aspect: When Is Payment Considered “Fee”?

Article 61 of the Income Tax Law broadly considers the benefits provided in return for management/auditing duties as “fees”. The established view (private rulings) of the Revenue Administration makes the following distinction:

Manager/auditor selected from among property owners: The benefit provided at the rate of non-participation in management expenses (i.e., up to the exemption of Article 40/4) is not considered real wages; it is not subject to income tax withholding and no payroll is required. However, if payment is made above this limit, the exceeding portion is taxed as wages.

Manager selected from outside (not a property owner): The payment made is considered wages; income tax withholding must be made and a payroll must be issued in accordance with Articles 61, 94, 103, and 104 of the Income Tax Law (GVK). If employed under an employment contract, insurance coverage may also arise.

Therefore, when deciding on payment to the manager, both the Condominium Law (KMK) and tax legislation should be considered together; otherwise, the complex/apartment may face tax penalties in the future.

Summary application notes:

If the contract/plan is silent and the manager is a property owner: 50% normal expense exemption automatically applies.

If additional salary/wages are requested outside of the exemption: a management plan or board resolution is required; it must be recorded in the decision book + operating budget.

The manager also participates fully in extraordinary/structural expenses.

Money received without a decision: refund + penal risk.

Tax: payments exceeding the exemption rate and payments to an external manager are wages.

Frequently Asked Questions (FAQ)

Can an apartment manager receive a fee (salary)?

Yes. According to Article 40/3 of the Condominium Law (KMK), even if a fee is not specified in the management plan or contract, the manager can request a suitable fee from the condominium owners for the services performed. The amount of the fee is determined in the management plan or by a decision of the board of condominium owners.

Does a manager who is also a condominium owner pay dues?

If the manager is a condominium owner, they generally participate in common expenses; however, according to Article 40/4 of the Condominium Law (KMK), unless there is a contrary decision, they do not participate in half of the normal management expenses. This exemption is a legal right that does not require a separate decision. For extraordinary/structural expenses such as the roof, exterior facade, or elevator motor, they participate fully in proportion to their land share.

Can the manager pay themselves a fee without a general assembly decision?

No. For a fee/additional payment beyond the legal 50% exemption, a management plan or a decision by the board of condominium owners is required. Amounts taken without a decision can be refunded; additionally, this could lead to discussions of breach of trust or embezzlement.

Are “Huzur Hakkı” and “manager’s fee” the same thing?

Although it is referred to as “huzur hakkı” in practice, this concept does not exist in the Condominium Law (KMK); the law only uses the term “fee”. “Huzur hakkı” is essentially a term belonging to company law. In condominium ownership, the payment is legally a manager’s fee.

Is the money paid to the manager subject to tax?

The benefit provided to a manager selected from among the condominium owners, in the proportion that they do not participate in management expenses, is not considered a true fee and is not taxed; however, any payment exceeding this proportion is taxed as a fee. Payments made to a manager selected from outside are considered a fee and are subject to income tax withholding.

Sources and Our Related Articles

Official source: Condominium Law No. 634 (mevzuat.gov.tr)

Why is Expert Legal Support Necessary?

Manager fees and dues exemption is a technical area where the Condominium Law (KMK) and tax legislation intersect. If the scope of the exemption (distinction between normal expenses and extraordinary expenses), the proper adoption of a board resolution for additional fees, the offsetting and refund of funds received without a proper resolution, and the tax nature of the payment are incorrectly structured, both the manager and the site may suffer harm; even criminal liability could arise. Properly drafting board resolution texts and correctly integrating them into the operating budget prevents these risks from the outset.

2M Law Office provides support to residents and managements of apartments and sites across Istanbul, and additionally along the Tuzla, Pendik, Kartal, Maltepe and Gebze/Kocaeli line, in matters concerning condominium law and site management law, manager fee/exemption disputes, and the preparation of homeowners’ association decisions. For an evaluation regarding your specific case: 2mhukuk.com

This article is for general informational purposes only; it does not constitute legal advice or legal/financial consultancy services. For tax liabilities, separate advice from a financial consultant should be obtained. Each dispute should be evaluated under its specific circumstances.