Considerations for re-letting

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One of the most common questions private owners currently ask us is whether and if so how to deal with an empty home. There are several problems:

  • If the apartment was inhabited for decades, it would have to be modernized from the ground up first: new electrical system, bathroom, kitchen, if necessary also an update of the floor plan, floors, windows. However, this leads to costs that make a new rent far above the planned rent cover necessary. If you shy away from the argument, modernization is not a good idea.
  • Rent cheap in the current state is also not an option. Because the tenant may not be released for decades, so it can not be modernized (or not without significant lease expenses) in the future. In addition, one would then over the time much of the accrued modernization backlog as repair work anyway and have to pay from his own pocket, which is not from the cheap rent. The risk here is to have higher costs in the long term than rental income, at least no meaningful returns. Why bother with work if you do not have anything but anger?
  • This leads to the most economical decision, the apartment currently not (cheap) to rent, until you can modernize it.
  • If you have extensively modernized an apartment (or newly built), enforce the rules of the rental price brake to demand the highest possible on the market recoverable rent. Because the follow-up rental ties in with the so-called pre-rent, more than you can not take. So the pre-rent must be as high as possible in order to anticipate possible rent increases in the future.
  • The same applies to not extensively modernized or not new apartments, where the last rent as a "pre-rent" was higher than the planned Mietendeckel. If one rents now to a legal value according to current value, which is lowered next year, you lose the grandfathering from the "pre-rented". Even then you can now better leave empty and wait.

Approach "Condition"

The above considerations actually lead to the fact that apartments that are often empty are not being re-let. In any case, not "regular", but room by room, sublease constructions, furnished, only to non-German speaking foreigners with temporary residence intent in Germany, on time, with expensive separate rental of pitch, cellar, fitted kitchen or Wi-Fi or teilgewerblich what the people just come up with. The alternative is to sell to a homeowner, but the market does not seem to be ready for that, in fact the rent cover must first come into force and be reported on the first fines.

Anyone who wants to dare to rent regularly, can work with conditions such as:

"The rent is 15 Euro / sqm net monthly. In the event that the above rental agreement is or becomes wholly or partially invalid due to state regulation, a reduction to the maximum permissible amount for the period of invalidity occurs. "

As a precaution: I am not responsible for this formulation in the context of this blog, but only want to convey the underlying ideas.

The advantage of this scheme is that no excessive rent is agreed: if effectively only a lower rent is allowed, this is valid. So there is no felony. At the same time, the reduction only applies if the provincial act is effective, ie it holds firm before the BVerfG. This is unlikely to be the case. One is therefore unassailable to the district offices, but still does not lose his rental claims in the meantime.

Compensation of deficits by subsequent season

In order to compensate for the lack of income from the period of reduction, one must probably provide next season for the period after expiry of the ineffectiveness:

"If the rent was effectively lowered by state regulation, then after the end of the season, the season will be as follows: with the month following the expiry of the state regulation, the originally agreed rental amount plus a scale surcharge applies. x Euro / sqm as agreed "(and then every year further graduation steps ...)

Also the above disclaimer ...

(Addendum 05.11.2019: here find a clause draft.)

And now? Modernize or not?

The hard-boiled go out from the ineffectiveness of any state-law market interventions in the rent and work as before.

All others can work with a time limit. Civil Code § 575 allows a time limit on a Wohnraum Mietvertrag when

"The landlord after the lease ... wants to remove the rooms in a permissible manner or change or repair them so significantly that the measures would be made considerably more difficult by a continuation of the lease"

It must be extensive measures, such as a floor plan change and / or a complete renovation of the apartment. The limitation reason must be mentioned in the lease, ie you need some planning of what to do. And then you rented unredeemed on for example 2 or 3 years. Until then, the rental cover could be legally clarified. If not, you can extend the time limit once. The law also forces the landlords to demand the maximum possible rent, because subsequent increases do not go so easily and one never knows exactly what destiny a tenancy will develop over time. Here, too, you have to make provision for the rental contract - unfortunately.

Invest at the apartment level

For the construction of assets and passive income from real estate, especially one or more condominiums, I have written an ebook, you can find the link to Amazon here , If you prefer to keep it printed in your hand, you will find it here .

Who under the new rules no longer rent, but wants to use, can cancel due to personal needs.

The advantage is that the effectiveness of such a termination does not depend on the effectiveness of the Mietendeckelgesetzes. If you want to read about the topic of self-employment termination, you will find related blog articles under the following links. Of course you can also just commission me, then I will do everything for you as your lawyer.