Friday, 25 May 2012

New Tenancy Law in Germany


Germany's government decided on an amendment to the tenancy law.

The most important changes:

  • Landlords can invest in energy efficiency measures, even against the will of the tenants. In turn the tenant will have a special lease termination right. Any disturbances arising from construction work must be accepted for up to three months without any reduction in rent.
  • The rent increase remains at 11% of the renovation costs per year, and examining the question of whether this represents an economic hardship for the tenant can no longer delay the start of work.
  • If a switch to energy contracting is made to improve the property performance, the cost can be distributed to the tenants if it is not higher than the previous operating costs.
  • Owners will now be able to more easily enforce the eviction of tenants in default.
  • In case of disputes, the courts may order the tenant to deposit the disputed amount until the end of the procedure.
  • Finally, the new law is to prevent the circumvention of protection against eviction (protection for three years against eviction due to future owner usage) in cases of apartment buildings’ being converted into condominiums.
These changes  make life for owners a lot easier and the rental market more balanced. They take away some of the uncertainty for international investors in Residential Property who see the legal regulations in the German Housing Market as very tenant-friendly.


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