CO2 clause in the rental agreement

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"CO2 price

The current federal government is planning to exclude the allocation of additional costs (heating costs) to the tenant on a pro rata basis in relation to the CO2 price. As a result, the legislator is forcing the landlord to pay these costs from the net rent, i.e. to agree on a net rent in an amount that also covers these costs. Since the costs depend on the one hand on the heating behavior of the tenant and on the other hand on the price development, i.e. they are variable, a fixed amount of costs cannot be determined and also not estimated for the future. A rigid additional net cold rent agreement is therefore not possible. According to press releases, it should initially be no more than 30 euros a year.

Landlord and tenant hereby agree, in addition to the net cold rent according to § 4 of the rental agreement, that the tenant has to pay that part of the CO2 costs as net cold rent that the landlord cannot pass on to the tenant as operating costs. Since the amount of this net cold rent is unknown and will vary continuously, the parties agree that the payment is due after the landlord has settled the proportionate CO2 costs, e.g. together with the settlement of the utility bill for the year in question.

The CO2 net cold rent agreed above is not taken into account in the event of an agreed scale or an agreed indexed rent agreement, ie it does not affect these, but only amounts to the amount of the non-recoverable costs as regulated above."

Calculation of a total rent

The above rental agreement clause is a first attempt to handle the change in the apportionability of heating costs planned by the legislature regarding the CO2 costs contained therein in terms of rental law. The reasons for structure and content are as follows.

The monthly rent is typically made up of two parts: 1. the actual rent (= “net cold rent”) and 2. the costs incurred by the landlord (= “advance payment of additional costs”). The latter are the costs that the landlord constantly incurs through ownership of the property or through the intended use of the building, the outbuildings, facilities, facilities and the property (§ 1 BetrKVO), for example water consumption, heating costs, but also building insurance or waste disposal.

There are a few costs that don't count as operating expenses. In terms of tenancy law, these are the administrative costs on the one hand and repairs and maintenance on the other. Otherwise, there are costs for the acquisition of the property, for example bank interest for the purchase loan. The landlord must pay this from the net cold rent. The administration and financing costs are typically fixed, while repairs are not really predictable. In order to calculate them, you plan with an ongoing monthly maintenance reserve of a fixed amount, and from these reserves you then pay for whatever repairs are required.

This defines all items for the landlord. He gets one Net rent, from which he has to pay fixed amounts for financing, administration and maintenance reserves. If there is anything left over from the net cold rent, that is his return (and if he pays more, it is his negative return). Furthermore, the landlord receives a ancillary costs advance payment, which affects the running costs of running the building. This is billed annually so that the tenant only pays for the costs incurred. For the landlord, this is a continuous item from which he has nothing, but which theoretically costs him nothing either, so that he does not have to cross-finance the net cold rent here.

non-systemic approach: proportional CO2 allocation to the landlord

The federal legislature introduced a CO01.01.2021 tax on January 2st, 2, which is to increase continuously. The rationale was that polluting the atmosphere with CO2 must cost money to encourage behavior that avoids it. For example, it should cost the consumer money if he heats more than he should. Of course, the consumer then pays more money because he consumes more gas or oil or district heating or electricity for this additional heating capacity than if he were to use less. However, the COXNUMX price is intended to make energy more expensive in order to raise the hurdle further.

Because this is expensive, the current government coalition intends to relieve tenants and pass on half of the CO2 costs or a proportion of the CO2 costs based on the energetic quality of the building to the landlord. From a legal point of view, this means that these CO2 costs are excluded from the operating cost allocation. The justification is that the landlord can modernize his house and then the heating costs drop, then he also has to pay less CO2 surcharge. The fact that the incentive provided by the COXNUMX surcharge for tenants to heat less is reduced accordingly is another question. In the present case, it should be about how this is to be treated under tenancy law.

In essence, the CO2 costs are operating costs. Because without the operation of the building they would not be created. These costs are variable because they depend on tenant behavior and weather conditions on the one hand, and on the changing level of the CO2 price on the other. The non-allocation ability now forces the landlord to cover this variable part of the costs with the net cold rent.

As we have seen above, this is alien to the system. Because the previous shares of the net cold rent are fixed or can at least be treated as fixed. They do not depend on tenant behavior and their level does not vary from year to year. Since the landlord cannot save on loan installments, administration or maintenance, the question arises as to how he can cover these variable costs in future with the net cold rent. Given the nature of this position, this will not be possible with a fixed share.

That means we need a new third lease: one variable net cold rent.

Can this be implemented in existing contracts?

That's a good question. Previously, there was no usage-based operating cost item that had to be paid from the net cold rent. When the contract was signed, the parties could not foresee that something like this would be introduced and that the previous system of rent calculation would be broken. For such matters Civil Code § 313 because: if circumstances that have become the basis of the contract have changed significantly after the conclusion of the contract and if the parties had not concluded the contract or had concluded it with different content, if they had foreseen this change, the contract can be adjusted. So we have to assess whether the introduction of charging CO2 costs to the landlord is a "serious change".

I mean: definitely yes. Because the rents are calculated so tightly nowadays that any additional unwanted burden questions the usefulness of further renting. Let's say the bank loan costs only 1% and is fixed for all eternity. Additionally, let's assume the repayment costs only 2%, which is so low that banks and finance brokers discourage their customers from repaying so little. Finally, let's assume that administration and maintenance also only cost 1%. That's a total of 4%. A rent of 10 euros/sqm then allows a purchase price for the apartment of 2.500 euros/sqm. If the owner has paid more than 2.500 euros/sqm, he pays more. On average, the purchase prices in Berlin are currently 5.270 euros (see here). This means that rents in Berlin are either more than 20 euros net cold/sqm on average (which is not the case) or that the owners are already paying more on average today. So yes, an additional burden on the landlord to bear additional costs dependent on tenant consumption is serious and generally calls into question the point of further letting.

If we affirm the requirements of § 313 BGB and thus a contract adjustment can be demanded, the question arises as to what content this could have. Depending on the problem, this should amount to agreeing on a variable additional net cold rent in the amount of the CO2 costs that cannot be passed on.

How compatible is an additional variable net cold rent with the previous local comparative rent?

The previous rent level includes (in the total rent) an allocation of the CO2 costs, namely currently via the operating costs. If this share of operating costs is outsourced, the separate introduction of a variable net cold rent in this amount does not lead to an additional burden. The current net cold rent does not contain any CO2 costs, since these are included in the operating costs. The introduction of a variable CO2 rent will not change anything either.

At the same time, this means that the previous price level plus the new CO2 rent can be applied in the case of new rentals and evaluation in the rental price brake, without exceeding the previous local comparative rent.

contractual clause

Whether the initially attempted lease clause works or not is uncertain.

Of course, this is just a first suggestion. The fact that it is aimed at a legal situation that does not yet exist naturally involves uncertainties. It is also unclear how durable this will be in practice in the end. This means that I assume no liability for the effectiveness and usefulness of this suggested wording. If you have a different and perhaps better solution, please bring it up.

If a variable net rent agreement is not possible, this would force the landlord to include these costs proportionately in the rigid net rent agreement. Of course, this would then have to be set at a level that not only reflects the current CO2 prices, but also their future developments. Otherwise, purely mathematically, the return would automatically decrease over time without being able to prevent it in any way. That in turn is likely to be constitutionally problematic, once again. On the other hand, the net cold rent must not be inadmissible according to the other rules, i.e. violate any rent control or the WiStraG. After all, rent legislation must not result in an owner no longer being able to generate income from his property.

It will be difficult to reconcile all of this without a variable net cold rental agreement.