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Renting in Germany: Here’s what to know about changes in 2020

Rocketing rent costs are a big concern to many living in or planning to move to Germany. But there are some changes that could help ease the situation.

Published: 6 January 2020 13:51 CET

Renting in Germany: Here's what to know about changes in 2020

A man walking in Berlin. Photo: DPA

The cost of housing in Germany is in the spotlight as renters grapple with rising prices and a lack of new affordable homes.

So will there be any relief in 2020? From tighter rent controls to housing benefit boosts, these are the important changes and developments to know about.

READ ALSO: Everything that changes in Germany in 2020

Rent brake being tightened and extended

The so-called Mietpreisbremse or ‘rental price brake' is supposed to stop landlords in areas with strained housing markets from increasing rents by more than 10 percent than the local benchmark average when renting out to a new tenant.

In June 2015, Berlin became the first German state to implement the new regulation, and now there are a total of about 300 cities. There are, however, times when a landlord is exempt from the regulations, such as in the case of a new tenant moving in after extensive modernization or if previous tenants already paid in excess of the local rent average.

This year the law is being tightened and extended. In future, tenants who are paying more than they should will be able to claim back the overpaid rent retroactively, up to a period of 30 months. The prerequisite is that the tenant has notified the breach within this period after the start of the rental contract.

In fact, the rent brake, or the possibility for the federal states to impose one, is meant to expire at the end of 2020. However, the regulation has been extended until the end of 2025.

Berlin rent cap

Recently, we explained how a massive 1,749 flat-hunters queued outside to visit a reasonably-priced vacant Berlin apartment 12 hours after it was advertised online, a sign of the city's problematic housing situation.

But could that all be about to change? Well, city bosses hope so.

The controversial “rent cap” (Mietendeckel), which is due to be approved in the next month or two, is set to implement a five-year rent increase freeze in the capital.

It will mean around 1.5 million homes will have their rents frozen and capped at €9.80 for Kaltmiete (cold rent, or costs before utilities) per square meter.

The draft law states that landlords cannot charge rents higher than what the previous tenant paid and, if their rent is above the limit set out in a rent table (which depends on the age of the building and other factors) tenants can even apply to have it lowered.

Exceptions include social housing, owner-occupied flats, flats in halls of residence and apartments built since January 2014.

After the law gets the green light it will then be applied retroactively from June 18th, 2019, which means that any recent rental increases may be deemed as not valid.

Crack down on excessively high rents

A protest against high rents in Hamburg in 2019. Photo: DPA

Further plans are being put forward from German states in a bid to stop tenants being faced with extremely high rental costs.

In response to drafts submitted by the states of Bavaria and Schleswig-Holstein, the Bundesrat has put together bills aimed at strengthening the Economic Criminal Code and increasing the fines for those caught exploiting tenants.

These measures will be introduced into the Bundestag for debate.

Restrictions on converting rented apartments to private flats

Another draft law for the preservation of affordable rental housing is being put forward by the city states of Hamburg, Bremen and Berlin.

They want to abolish a loophole in the Planning and Building Law, which says the conversion of rented apartments into private homes is only possible if the apartments are sold to tenants during the first seven years of them living there.

In practice, however, the applicant states argue, tenants are not able to afford to the buy the apartments during those seven years. Therefore, the owners allow the period for tenants to buy the home to expire, and then they will be able to offer the home on the market.

That means that new owners then often take back the flat, declaring their own interests (Eigenbedarf) or increase rents after modernization. The bill was presented in the Bundesrat and will be discussed in the relevant committees.

Boost to housing benefit

People on low incomes have received an increase in housing benefit (Wohngeld), a state subsidy intended to ensure tenants can afford suitable housing.

From January 1st, housing benefits increased by an average of about 30 percent. A two-person household, for example, now receives €190 per month instead of the previous €145.

In addition, as a result of the 2020 housing subsidy reform, around 180,000 more households are entitled to the subsidy than before.

From 2022, the housing allowance will then be regularly adjusted every two years to reflect current rent and income trends.

In 2021, the German government is also planning a further housing benefit increase, which will relieve low-income households of heating costs. They are set to rise as a result of the CO2 price increase under the climate protection programme.

Generally, in order to qualify for housing benefit, you cannot be receiving any other benefit payments, such as unemployment allowance.

Good-to-know for renters

When you're searching for a flat in Germany, you might find that landlords want to see a Schufa credit check – even during the apartment viewing. But fear not, it's fairly easy to obtain. Read our guide on how to obtain a Schufa here.

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10 essential tips for avoiding rental scams in Germany

When it comes to settling in Germany, one of the most stressful and difficult tasks you’re likely to face is finding a place to live.

With the country in the grip of an ever-worsening housing shortage, there aren’t enough rental properties to meet the high demand – especially in big cities like Berlin, Munich and Frankfurt – and the flats that are available can often stretch even the most healthy of budgets.

With renters desperate to find affordable homes, crafty scammers have seized the chance to place fake ads on the market, often in dream locations with lower-than-average rents.

While some of these scams may be easy to spot, others can be highly sophisticated, with fraudsters setting up professional-looking websites and even allowing hopeful tenants to view their properties in person.

Recently The Local reported on a Polish couple who lost around €7,000 through a rental scam in Berlin. The scammers had sublet a beautiful Altbau apartment in the popular district of Neukölln and created an advert for it via a fake letting agent website, then arranged for people to use a key box to view the property while the real tenants were away.

Despite checking the contract over with legal experts from their local tenants’ association, nobody saw anything out of the ordinary – that is, until they tried to access the apartment and found a family already living there.

So, how do you protect your hard-earned savings and steer clear of scammers while looking for a new home?

Here are 10 important ways to protect yourself from rental scams.

1. Be alert to suspicious signs

The key to avoiding scammers in Germany is to be fully clued up on the warning signs. Was the listing for the property uploaded in the middle of the night, is the advert thin on details or written in bad German or English, and does the offer feel too good to be true?

Though it would be nice to believe there are still cheap flats to be found, finding an attractive property at an overly reasonable price is usually a red flag.

Hamburg

Modern apartments in Hamburg. Photo: picture alliance/dpa | Daniel Bockwoldt

If someone claiming to be a landlord contacts you out of the blue, that’s also your cue to run a mile. With so many people looking for housing, most letting agents and landlords will have more than people looking to rent their properties without needing to get in touch with people themselves. Anyone who does is more than likely to be a scammer.

2. Rule out landlords who say they live abroad

One of the major warning signs to look out for is a landlord who claims to be renting the property from abroad, or who says they are out of the country for other reasons, like a last-minute business trip.

That’s usually a scammer’s way of excusing the fact that they won’t be able to meet you personally or even show you the property before you rent it.

“When the country the landlord lives in appears then I would say there’s a really big chance this is a scam,” said Kuba Rudzinski, one of the victims of the Berlin-Neukölln rental fraud.

Even if the excuse seems plausible, your best bet is to ignore anyone who tries to sell you a story about living abroad and simply move on with your house hunt.

3. Do your research online

Before committing to anything, take time to do some thorough research to scope out the property, landlord and letting agent.

Running the pictures and text used in apartment listings through a search engine like Google will help you quickly identify stock photos and text stolen from other listings. For pictures, this is known as a reverse image search.

A laptop

Photo by 2H Media on Unsplash

It’s also worth checking that any websites you’re sent to are fully functional and not copies of other letting agent sites, and that any email addresses match the website domain.

4. Visit the property and ask around

Never agree to rent a property without seeing it in person first. Arrange a viewing and take the opportunity to ask questions about the property and the neighbourhood.

Kuba also recommends speaking with the neighbours in the building to check if the property is genuinely being rented.

“Go to the place before and ask the neighbours, is this flat really for rent? Because these people generally know,” he said. “You’ll need to convince yourself to do it of course, but just ask in the building, ask on the floor where the flat is.”

5. Don’t transfer the full deposit in advance

Advance payments for anything, whether it’s furniture, a deposit or getting a chance to view the property, should be considered a major red flag.

Under German law, you are usually only expected to pay the deposit by the start of the agreed rental contract – and certainly not several months in advance.

Euro notes lie next to some house keys on a table.

Euro notes lie next to some house keys on a table. Photo: picture alliance/dpa/dpa-tmn | Andrea Warnecke

You are also legally entitled to pay your three months’ deposit in three instalments on top of your first three months’ rent after moving in, so definitely be cautious of landlords that place pressure on you to transfer a large lump sum.

If you’re really concerned, look into alternatives for paying your deposit, such as Kautionversicherung (deposit insurance) or a Mietkautionssparbuch, where you open a bank account and pledge the amount to the landlord, rather than transferring the money directly.

6. Insist on meeting the landlord or letting agent in person

If a landlord or letting agent refuses to meet you in person or insists on conducting all communication online, they’re probably not who they say they are.

Insist on meeting face-to-face to verify their identity and ensure they have a legitimate connection to the property.

7. Avoid sending documents straight away

Not all rental scams are about getting money from you directly: many scammers are simply after your personal details for the purposes of identity theft.

Be wary of providing personal documents or sensitive information before you’ve verified the legitimacy of the rental agreement, especially when it comes to things like passport scans or other forms of ID.

8. Seek legal advice from experts

If you’re unsure about any aspect of the rental agreement or if something seems suspicious, seek advice from legal experts or tenants’ associations.

However, be aware that this isn’t always a cast-iron guarantee that a tenancy is legitmate. Over the past few years, fraudsters have become increasingly sophisticated, even down to producing water-tight rental contracts for would-be tenants.

An estate agent hands over keys to an apartment. Photo: picture alliance/dpa/dpa-tmn | Christin Klose

According to civil lawyer Emilia Tintelnot, becoming a member of a tenants’ association can be a good way to get affordable legal advice, and it can also be helpful to set up legal insurance to ensure you can access help when you need it without having to pay lawyers’ fees up front.

9. Be wary of stereotypes

Avoid making assumptions based on stereotypes or preconceived notions about someone’s gender or nationality, as this may cause you to overlook things you might otherwise see as warning signs.

In Kuba’s case, the fact that the fraudsters were German made them appear more legitimate in his eyes, as Polish people tend to see Germans as law-abiding and trustworthy.

Be aware that scammers can come from any cultural background and may use a variety of tactics to deceive unsuspecting renters.

10. Keep an extensive paper trail

Document all communication, agreements, and transactions related to the rental process, including phone numbers and any bank details provided.

According to the Berlin police, this type of evidence can be crucial for an investigation if you do suspect a scammer.

While evidence can differ across cases, “pictures, contact details used by the perpetrators, original documents, bank details with payment receipts” are particularly helpful for investigators, and could help the police stop the scammers for good.

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