How executed yesterday Berlin is currently most likely without rent index. This raises the question of how to formally effectively justify a rent increase.
The right to adjust the rent to market developments during the current tenancy compensates for the fact that the landlord cannot simply terminate the contract. Once rented, the apartment will not be returned to him (without breach of contract by the tenant or personal use). So that they are not devalued as an economic good over time and thus increasing costs for maintenance (e.g. craftsmen) can be paid permanently, their income must be able to grow with the general market development.
Civil Code § 558 enables this with the following framework conditions:
- A rent increase can be requested at the earliest 1 year after the last one and take effect no earlier than 15 months after the last one.
- The rent may not increase by more than 20% in 3 years, in so-called "tense housing markets" by no more than 15% in 3 years.
- The rent can only be increased up to the so-called "local comparative rent" (oüVm), ie never above the average level.
- The rent increase comes about by contract: the landlord must demand it and the tenant must agree to it. The tenant's consent can be replaced by a court judgment if the landlord is entitled to the increase.
It is not so easy to determine what the oüVm is. So that the tenant can check the landlord's request for an increase, the landlord must justify it. If he does not do this, it is formally ineffective and does not trigger a claim for consent against the tenant. Only a sufficiently justified request for an increase obliges the tenant to consent.
How do you justify a request for an increase?
So that it is unequivocally determined when a request for increase is formally sufficiently justified § 558a Civil Code a catalog of four possible means of justification. you are
- a rent index
- information from a rental database
- a well-founded öbuv expert opinion
- the naming of at least three comparable apartments
The qualified rent index is given priority by Section 558a (3) BGB: if it contains information for the apartment in question, this must be communicated in the request for increase even if the landlord justifies it differently (e.g. by comparing apartments).
There is currently no rental database in Berlin, nor can it be created just like that. You would have to according to § 558e Civil Code be managed or recognized jointly by the municipality or by representatives of the landlords and tenants, that is not within reach in Berlin.
There is no rent index either.
This leaves the report and the comparative apartments.
Justification with expert opinion?
Since we had a rent index in Berlin for many years, appraisers were only required in exceptional cases. As a result, there are hardly any rental appraisers in Berlin. The few we know have not been accepting any orders for weeks "due to capacity reasons". My clients get such rejections before the price of the expert opinion has even been discussed. This indicates that justifying rent increases by means of expert opinions will not be a suitable means for mass use for the foreseeable future, quite apart from the costs of such an approach.
Justification with comparable apartments?
The only thing left is the increase by naming comparative rental apartments. Apartments that are comparable in terms of size, location, year of construction and equipment are comparable. How exactly and how similar it must be is always the subject of legal disputes - but hardly in Berlin, because we had a rent index. I expect that a Berlin case law will develop on the details in the near future.
The problem with many landlords, in addition to assessing their comparability, is where they should get the data for the comparable apartments from. Large rental companies or owners who have their apartments managed by professional property managers have an advantage: their own inventory as a data basis. They know which apartments are equipped and how, and they know their numbers. However, a few years ago a chamber of the LG Berlin decided that a landlord's own portfolio is excluded from the selection of comparable apartments. The law does not provide for such a differentiation, but we cannot rule out that the courts will remember this and that we will see more such judgments in the near future.
Smaller owners have the problem that they do not know of three other comparable apartments. Here you could ask the neighboring owners. As a member of a local Haus & Grund association, you may be able to look for club members and exchange ideas with them.
But is data exchange allowed at all? The GDPR prohibits the transfer of personal data, reported violations lead to communication with the data protection authority and possibly to fines. So in the future we have to think about what personal data is in connection with comparable apartments. On the one hand, the comparable apartments must be named precisely so that their existence can be checked: A-Strasse No. 1, 3rd floor on the right. The apartment data must also be given: x square meters, 3 rooms, bathroom, kitchen, hall, balcony, cellar, year of construction, if necessary, further information on the section or criteria similar to the range classification in the rent index. Finally, the landlord has to state the rent of the comparable apartment, because with this he justifies the request for an increase. None of this is personal, but a simple look at the doorbell on the house of the comparable apartment allows the tenant to be identified and that is then again personal: you then know exactly how much the tenant in question pays and what his living conditions are like. For the owner who justifies a request for an increase with this data, this is probably not a problem under data protection law, because he only does this to exercise his rights. It is different for the owner who has passed this data on: he does not pursue his own rights, but helps someone else to pursue their rights. Is that why the owners are prevented from communicating with one another? That cannot be because the legal justification would run empty. But one will have to expect a dispute with the data protection authorities at this level.
In Berlin, we also have no (tenancy court) jurisdiction to differentiate between what is permitted and what is not. I assume that it is not just one tenant who comes up with the idea of calling in the data protection authority if a rent increase is requested or if his apartment is justified as a comparable apartment. Rental activists will band together and cause some hype over data usage.
How do you deal with all of this now?
First, consider that the rent increase comes about through a change in the contract: the landlord requests it and the tenant agrees, the change is agreed. If that happens, ie if the tenant agrees, it does not matter whether and how the request for increase was justified. An unjustified request for an increase can also be approved and the change will then take effect.
It is therefore not absurd, but perhaps even practicable, to first refer to the Berlin rent index 2021 and "justify" the increase with it. From a legal point of view, this is formally ineffective because the rent index probably does not exist despite appearances to the contrary. But if the tenant agrees, it has served its purpose. The pacification function and the simplification that the rent index should guarantee would be fulfilled by an increase carried out in this way.
Only one should not sue for it if the approval is not given, because the loss of the lawsuit is foreseeable. Instead, a renewed request for consent would have to be made, which is effectively justified, i.e. with comparable apartments. Due to the currently still existing legal uncertainty regarding the rent index 2021, its information should be mentioned in the request for increases based on comparable apartments, to be on the safe side (Section 558a (3) BGB).
Here owners have an advantage who can access their own database or that of their property management. A new business field for property management could be to offer individual owners who basically want to manage their apartments themselves, the isolated implementation of rent increases. This can cost something, but it will remain cheaper (and more available) than a rental appraisal. In particular, the database of large administrations with a considerable number of administration objects gains a value due to the current situation that should not be underestimated - and the administration a competitive advantage.
Smaller administrations are at a disadvantage here. You can use other apartments in the same house for your own owners, but for external owners the next property in their portfolio may not be in the same part of town or in a completely different location, or the year of construction is completely different, and it becomes difficult. Whether smaller administrations can carry out isolated rent increases for external owners therefore depends very much on the individual case.
This situation privileges the big players and thus promotes the centralization of stocks in fewer hands than before. At the same time, it creates an incentive to have objects managed more professionally than before. This can lead to possible increases in the possible time windows actually being carried out more often than before. Small private owners do not put the files on a 3-year resubmission for the next increase as routinely as the software programs of the professional market participants.
Comparative rental apartments in the process
If the landlord has succeeded in formally justifying a request for an increase, it must still be checked in the process whether it exceeds the oüVm. The court cannot do this with the comparable apartments, but must obtain an expert opinion (if the tenant denies that an increase of this amount can be demanded).
Considerable procedural times are to be expected due to the bottleneck in the expert capacities.
All landlords whose rents adjust themselves because a scale was agreed in the lease do not have to “carry out” a rent increase. You are spared the legal uncertainty of the rent index, the dispute over the formally correct justification, the comparability of comparable apartments, the amount of the oüVm and the expert costs in the process.
I therefore expect that landlords will ask for graduated rent more frequently than before for new contracts in the future. The question of the correct drafting of contracts against the background of the current situation is a separate topic that I will deal with in a later article.
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