As the owner of a non-occupancy property, you should consider all options, including those of the sale.
Sell instead of rent brake
A released object usually takes a 15-30% jump in value, which is lost on re-letting.
The “rental price brake” often prevents you from realizing the usual market return. These factors influence the future prospects of your property.
We would be pleased to help you in your decision-making process, which should consider your personal situation, tax aspects and financing side in addition to the property-specific characteristics.
It is our aspiration to work with you to find the best result for you, which is always an individual decision.
Since June 2015, the rental price brake applies
The “Law to dampen rent increases in tight housing markets” allows the federal states to declare certain areas to be tight housing markets and to cap rents there.
What the law governs
In the municipalities concerned, the rent may not be more than ten percent higher than the local comparative rent for the conclusion of a new lease in an existing dwelling. This comparative rent usually results from the rent levels on site.
Three exceptions are foreseen in the new law: for new buildings, extensive refurbishments and existing rent levels.
New buildings are apartments that were let for the first time after 1 October 2014.
Extensive modernization exists when more than one-third of the funds have been spent, which would have cost a comparable new building.
Also excluded are existing leases. Landlords do not have to lower already agreed rent.
What tenants can do for too high a rent
If a tenant pays a rent that is more than ten percent above the local comparable rent, this claim of the landlord (with the exceptions mentioned) is inadmissible and ineffective. The tenant can withhold too much demanded rent – even if he has signed the excess claim in the lease. This is only possible in the form of a qualified complaint. He must justify on what basis he has determined the excessively high rent. For this, the tenant must know what the rent of his previous tenant was. The landlord is obliged to provide information on request. If the complaint is given, the renter can demand back overpaid amounts from this date. He can not claim past payments.
2018: tightening of the rental price brake
The Federal Government wants to protect a new law tenants from usury and repression.
Federal Government has decided to tighten the “rent-price brake” that has been in force since 2015.
In the so-called Tenancy Law Adjustment Act, among other things, a provision of information for landlords, a restriction of the rent increase after modernization or penalties for luxury refurbishment are provided.
The law will now be decided in the Bundestag.
The SPD Justice Minister Barley wants to strengthen the rights of tenants and protect them from repression.
The Basic Law is “property obligated”, it should also hold financial investors and speculators.
The rental price brake introduced in 2015 has not brought to the desired success. On the contrary, landlords that have so far moderately or not increased, was encouraged to secure their dwindling rights and so followed rent increases, which would otherwise have not occurred.
In 2014, when the discussion about the new law of SPD Minister of Justice Heiko Maas was already in full swing, he let his house in Saarland through a broker and let the tenants pay the commission.
Only when this became known in the press, he has reimbursed his tenants, the commission and announced to have behaved legally correct.
After the tightened rental price brake the rental price stop?
Hardly two weeks after the tightened rental price brake, follows the second push of the SPD to expropriate private property owners, the rental price stop. In addition to the tightening of the rent-price brake, the SPD leaders want to implement a 12-point plan to reduce rent increases. “The pressure on the rental market is finally so dramatic today that additional measures would have to be taken.”
The 12-point plan includes, among other things, a rental price stop. It stipulates that rents in places with a tight housing market may only be increased at the level of the inflation rate for a period of five years. This rental price stop should not only apply to existing rents, but also to newly concluded leases.
So far rents in areas with tight housing markets can be increased by up to 15% within three years (otherwise up to 20%). According to the new plans, based on inflation of around 2%, this is only around 6%.
In addition, self-service terminations are to be restricted.