Rent Law Reform: Decision of the Federal Government Very Owner Friendly
Written By: Lutz Auffenberg. – German Attorney at Law
WINHELLER Attorneys at Law
Frankfurt am Main, Germany
The German Federal Government has decided upon a draft law which would strengthen the landlords’ rights in Germany in many ways. This advance could make investments in German real estate even more attractive.
On the one hand, landlords of an apartment should be able to implement the renovation of their leased property more easily than according to previously applicable law and the costs incurred can be passed on in part to the tenant. According to applicable law, the tenant is under no obligation to the landlord to tolerate modernization measures, which would represent an exceptional hardship for him. The revision provides that tenants can no longer oppose an energy-related renovation if this lowers the additional costs. Also, a rent reduction due to construction noise connected to the renovation should basically only be possible according to the proposal after three months. Particularly interesting also for investors is the fact that the costs for energy-related renovations should be transferable to the tenant up to the amount of 11%. The initiative further provides that actions for eviction against nonpaying tenants should be enforceable more easily. Experts expect a rise in investments in real estate if the draft law should be adopted.
NOTE: Whoever decides on an investment due to the fundamental attractiveness of the real estate market should seek legal advice prior to making a purchase and all the more with regard to the economic use, such as leasing. We will be pleased to assist you.