Inflation and housing
Affected people should know this about their index rental agreement
The cost of living in Germany is rising and rising. Stupid if rent is also measured against the general price level. This is the case with lease contracts. It can be expensive.
Berlin. In principle, index leases can be a fair thing. The level of future rents always depends on the evolution of the cost of living. This way, the owners always get what was agreed upon to move in. And tenants can understand the exact increases. Only: in times of high inflation, this can get really expensive. The German Tenants’ Association (DMB) answers what those affected should know.
Can landlords demand an immediate index rent increase based on a statistically defined price index?
The rent does not increase immediately and the increase cannot be verbally confirmed, according to the DMB. Instead, owners will have to submit a written declaration of an increase or change based on price index numbers calculated by the Federal Statistical Office.
A prerequisite for such a rent increase is also that the previous rent has remained unchanged for at least a year, according to the DMB.
After receiving the actual indicator rent increase announcement, the revised rent must be paid at the beginning of the following month. The increase is excluded retroactively.
Should the rental price brakes also be considered in an index rental agreement?
The DMB states that this only applies to the initial lease. In principle, the initial rent, i.e. the first rent to be paid, can be freely agreed upon. However, if the apartment is located in an area with an applicable rent control regulation, the rent control requirements must apply to the initial rent.
On the other hand, rents increasing after the initial rent are no longer subject to the constraints imposed by the rental rate brakes.
Are there limits to the standard rent increase?
No According to the German Tenants Association, rent law does not currently provide for any restrictions on increasing the standard rent.
Can modernization costs be transferred to rent?
Limited only. During the term of the index agreement, landlords may not increase the rent for upgrades for which they are not responsible. These include energy-saving measures such as roof insulation.
Rent increases due to other modernization measures, such as adding a balcony or renovating the bathroom, have been ruled out, according to the German Tenants Association.
By the way: the rent increase to the comparable local rent during the term of the standard lease is also excluded.
Can landlords simply switch a regular lease agreement to a standard lease agreement during the current lease relationship?
The DMB has stated that landlords do not have the right to convert an existing lease into a standard lease. This requires the consent of the tenant.
Could the rent drop again?
Even if the indexed lease agreement is primarily the basis for increasing rents, it is also possible to lower the rent as the corresponding price develops, according to the DMB. Tenants will have to request the rent reduction in text form – eg by email.
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