Is a landlord responsible for the damping

Tenancy Law Amendment Act

Rental price brakes and the ordering principle come into force

On June 1, 2015, after a long discussion, the new tenancy law will come into force. In order to protect the tenant from excessive rents and to dampen rent increases, this law introduces the so-called rent brake. According to this, the rent in areas with tense housing markets when first letting or re-letting an existing apartment may not be more than ten percent above the local comparative rent. The state governments are empowered to designate the areas with strained housing markets in which this rent limit applies by means of a statutory ordinance.


Exceptions to the rental price brake

Newly built apartments that will be used and rented for the first time after October 1, 2014, and the first rental of an apartment after extensive modernization are excluded from the rental price limit. When re-letting an apartment, the rent agreed with the previous tenant may also be demanded, even if it is more than ten percent above the local comparative rent. The landlord is therefore not forced to offer an apartment that has become vacant below the previous rent. When determining the previous rent, rent reductions and rent increases that were agreed with the previous tenant within the last year before the end of the tenancy are not taken into account. If the landlord has carried out modernization measures in the last three years before re-letting, he may exceed the permissible rent by the amount by which he is allowed to increase the rent according to the rules of a modernization rent increase. For newly concluded tiered rental agreements, the aforementioned regulations apply to each tier of rent, in the case of index rents to the agreed initial rent. The rent brake has no effect on existing tenancies. This means that the landlord does not have to reduce the rent if it is more than ten percent above the local comparable rent and that he is still entitled to increase the rent within the legal framework.


Tenant Rights

At the request of the tenant, the landlord is obliged to provide the tenant with information about the facts that are relevant for determining the permissible rent, insofar as these facts are not generally accessible and the landlord can easily provide information about them. If the rent is more than ten percent above the local comparative rent, the rental agreement is ineffective if the permissible amount is exceeded. However, the tenant can only claim back the overpaid rent if he has reported the violation to the landlord and the rent demanded back has become due after receipt of the complaint. The tenant's complaint must contain the facts on which the complaint about the agreed rent is based. An agreement that deviates from the rental price limit to the detriment of the tenant is ineffective. However, agreements on the rent amount in the current tenancy are generally permitted.


Whoever appoints the broker pays

With the Tenancy Law Amendment Act, the so-called ordering principle is also introduced. According to this, the person who hired him should pay the broker in the future. The tenant only has to pay the broker if he himself has given the broker a search order and the broker exclusively because of this search order has obtained the apartment for which the rental agreement was finally concluded. This means that the previous common practice of charging the tenant with the costs of the broker is no longer permissible, even though he was (also) commissioned by the landlord. Agreements which transfer the obligation to pay when the landlord engages the broker are ineffective. But even if the broker has been commissioned by the tenant, he may, as before, only demand a fee for the mediation of the apartment if the landlord or another authorized person has agreed to the mediation. This is to prevent the broker from offering the tenant apartments that he only learned about by chance from third parties or that he has taken from advertisements in newspapers. Brokers' violations can be prosecuted with fines and wrongly made payments can be reclaimed from the tenant. Since the ordering principle only applies to the brokerage of a rental apartment, nothing changes when buying or selling a property. This means that the broker can, as before, agree on a commission for the mediation with the buyer or the seller or with both. Agreements between the buyer and seller of a property regarding the payment of the broker's commission are still permitted.


Text form for brokerage agreements

Brokerage contracts for the brokerage of rental apartments are only effective in the future if they are concluded in text form. This should make it clear to both the apartment hunter and the landlord that he is concluding a contract and therefore remuneration may be due if the placement is successful. In this way, ambiguities about the question of whether and with what content a brokerage contract was concluded can be avoided in the future. Brokerage contracts, which deal with the purchase or sale of an apartment, do not require any special form, as before, but should always be concluded in text form for evidence purposes.

Rainer Schmitt
Lawyer at the Eigenheimerverband Bayern e.V.