Rent Increase and Rental Reduction - What You Need to Know

Rent Increase and Rental Reduction - What You Need to Know

Germany is currently in a very interesting for investors Market stage, as more and more old buildings are converted or redeveloped and from this in established neighborhoods so-called luxury apartments can emerge. These raise the general rental price level, which means that in the medium term virtually every tenant will feel the effects of these developments. However, the legislature also gives a certain freedom of action to the landlord, which must be within the limits defined by various standards. In the end, the causes and concomitant circumstances of rent increases and rent reductions are of particular importance, although in the latter case the situation for the tenant is not always easy and manageable. The first indications are certainly the judgments spoken by the German courts, such as how to deal with certain deficiencies or deficits.

Rent increase is bound to tight specifications

The landlord has the right in the course of the respective tenancy to increase the To bind rent to general price increases respectively to implement them. It is important to know that all rent increases basically require the agreement of the renter. If this remains out, it can sometimes be sued for consent. As a rule, however, the special right of termination applies, which is largely also perceived by those affected.

  • The & sect; & sect; 558 to 558e BGB clearly state the scales by which an increase up to the local comparative rent is possible. According to local conditions, what has been paid in the area concerned for a comparable apartment on average over the last four years. The Mietspiegel should be enclosed with the letter, with which one can understand the classification and increase - however there is no obligation to send, because all data are freely accessible with the responsible administration.
  • A first hurdle is to be taken first by that Distance of 15 months to the last rent increase must be kept. The scale here is the time of the rent increase, not the time of the pure announcement. However, the rent may increase by a maximum of 20 percent over a period of three years.
  • It must then be clarified whether the written notice also complies with all formalities. A clear and unequivocal justification is indispensable for an effective increase.
  • If the municipality does not have its own rent index due to its small size, then three comparable apartments can be named. Comparable means in this case a compact match in terms of features, size and location. The respective tenant must be named, but this does not entitle to inspection and inspection.
  • Particularities apply if the apartment was previously modernized and thereupon an increase took place. Unfortunately, this is not an obstacle to increase the rent yet on the local comparative rent. The above mentioned limit of 20 per cent within three years is not explicitly valid for increases due to modernization.
  • The reflection period, ie a reflection period for the rent increase, is usually two months plus the difference to the end of the month from the time of the announcement. This period also applies to the preservation of the special right of termination. However, the consent is not linked to any particular forms, it can also be oral or tacit. This is particularly the case when the higher rent is actually paid.

The special cases of staggered rental and modernization

If the lease is a so-called staggered rent, the rent increases in the next few years are already fixed at contract signing, then special rules apply to landlords. The regulation with the 20 percent increase within three years is overridden, so that no reference to any comparable rents can be taken. Even with the index rent, this passage does not exist, here alone the annual inflation rate applies.

It can be relatively problematic in a modernization, because sometimes this can not be separated from a pure maintenance. A revaluation, for example by the installation of an elevator or by the construction of balconies, is undoubtedly regarded as modernization. One must therefore ask oneself how a maintenance is defined as a classic counterpart in this constellation. The principle is: If there is an improvement for the tenant, then this is a modernization.

So if only a defect in the apartment fixed, a broken window, for example, then this is solely the fulfillment of a contractual obligation. However, an energy renovation is clearly classified as a modernization or improvement, because it can save heating costs. According to the relevant judgments, this classification applies even if the cost of remediation and the relevant savings potential are significantly different. However, the rent can be up to eleven percent per year, based on the net annual rent. Exceptions apply if the own contribution is lower due to public subsidies.

Lease reduction in the case of defects and the like

The rent reduction is also a legally defined means of ensuring that unilateral charges by lessors are followed by the appropriate response. As a rule, it will go to deficiencies that justified in the tenant's view to a rent reduction. However, one should not engage too much here, because there are clear principles and basic features of what counts as a lack of rent and what does not. In extreme cases, the risk of termination and the risk to be faced with additional claims of the landlord. The courts are also often concerned with such cases, which in this case gives us some clues as to what is legally in order and what is more unilaterally limited.

Most importantly, not immediately after discovering the defect is the payment of the rent is set. Here, the rule already explained elsewhere applies that the landlord can easily cancel the contract without notice if two months' rent is delayed. In some cases it even came to the fact that defects were concealed and could not be remedied in time, so that one later faced a claim for damages.

  • At the beginning there is the documented indication of the damage, because the landlord must always have the opportunity to Mending or removal of the defect can be given. Here it is important to emphasize that even such impairments may represent a defect that is not the responsibility of the landlord. Classic examples of this would be pub noise or construction sites in the immediate vicinity. Courts distinguish here between new and known deficits, about which one already had knowledge as a tenant when moving in.
  • Take the handover protocol and look for any defects that already existed when moving in. Periodic damage, such as spots of moisture, is not recognized as a reduction reason, as it could have been detected during proper inspection. Here you can see if the landlord has agreed to repair any documented deficiencies, as appropriate.
  • Since there are often overlaps, payments should only be made with reservations from the moment of publication. This type of ultimatum is regarded as a legitimate means of pressure and has the effect that later several months' rent can be claimed retroactively. This step does not have to be agreed with the landlord or even approved by him, as well as a direct rent reduction. However, depending on the situation, it is due to the propriety of communicating the next steps openly and honestly.
  • For rent reductions, the Hamburg table should be used to select the proportion of the warm rent based on the comparison values. Although court decisions always provide clues only, because they are decided separately in each individual case, but also show the landlord a sound knowledge of the current case law.
  • Recognized is the procedure, in the absence of repair or repair, to continue with drastic sanctions. The three to five times the reduction already made can also be withheld. With a rent of 400 euros and a reduction of ten percent are thus up to another 200 euros in the frame possible. It is also clear, however, that the difference must be repaid immediately after the rectification has been completed.

Incidentally, the last resort is termination without notice, which does not require a subsequent tenant. In any case, advice from consumer associations, tenant protection associations, lawyers and similar contacts is recommended. Incidentally, many legal expenses insurers bear legal and court fees in the event of such disputes, so check your contracts.

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