FDP delays better tenant protection: blockade at the expense of tenants
A bill for better tenant protection is a long time coming. He is stuck in the FDP-led Ministry of Justice.
BERLIN taz | Actually, the draft law for better tenant protection should have been there long ago. The times for this would be favorable, because rents are rising unabated. According to an analysis by the real estate portal Immowelt, rents in Berlin have risen by 27 percent since November 2022. Unfortunately, little is being done to relieve tenants.
In political Berlin, there has been a rumor for some time that Minister of Justice Marco Buschmann (FDP) is actively holding back the bill for an amendment to tenancy law because he for an agreement on data retention hopes where he is at odds with SPD Interior Minister Nancy Faeser. In other words: Tenant protection only against data protection. Apparently, the tenants in Germany have to pay for it. The chapter on tenant protection in the traffic light coalition agreement is quite manageable anyway. A nationwide rent cap, which the SPD and Greens could have imagined, could not be implemented with the FDP.
Only three things have been agreed: First, the cap in areas with a housing shortage should be lowered from 15 percent to 11 percent. This means that rents in tense markets may not increase by more than 11 percent within three years. Secondly, the rental price brake should be extended until 2029. Thirdly, qualified rent indexes are to be strengthened and made mandatory for municipalities with more than 100,000 residents. The rental contracts for the last seven years should be used for the calculation. It is currently six years.
From a legal point of view, these three projects are not very complex to implement. Nevertheless, the tenancy law amendment is a long time coming. The Ministry of Justice plans “to present a draft law soon,” it said when asked. while said the ministry to the taz in October 2022that it is working “at full speed” to present a draft by the end of the year. Even Chancellor Olaf Scholz announced in October 2022, on Alliance Day for Affordable Housing, in front of running camerasthat the Minister of Justice “will present the agreed projects in tenancy law this year”.
The chancellor’s word can’t help either
But the chancellor’s word doesn’t seem to be worth much either. The deadline has now passed two and a half months. It is interesting that when asked whether a completed draft law would be withheld, the Ministry of Justice did not deny it. Instead, only the reference to a statement by the Minister of Justice in one Interview with the daily mirror. “If all sides stick to the coalition agreement, we can make rapid progress overall,” Buschmann said.
The coalition partners are growing impatient. “I am increasingly annoyed that the Federal Minister of Justice is refusing to implement the agreements in the coalition agreement,” said SPD member of the Bundestag Zanda Martens of the taz. She emphasizes the urgency: “Time is passing, rents are rising – both cannot be turned back.” The delay not only harms “reputation and the mood in the coalition”, the consequences are more serious “for the people in this country, for whom with skyrocketing prices there is now a risk of rent increases or even homelessness”.
The Greens member of the Bundestag Hanna Steinmüller sees it similarly: “It is wrong to make agreements that have already been made dependent on other legislative projects,” she criticized to the taz. Apparently she assumes that the Minister of Justice is bartering. Like Martens, Steinmüller is pushing for the coalition’s plans to be implemented quickly.
However, it is currently not clear whether the Minister of Justice intends to implement all of the agreed projects. When asked what should be newly regulated, his ministry mentioned the extension of the rental price brake until 2029, the lowering of the cap limit and that “communities with more than 100,000 inhabitants are obliged to create a qualified rent index”. But what is missing: that the rental contracts of the last seven years should be used to calculate rent indexes instead of the current six.
Scope for calculation method
The latter may sound detailed, but it is important: Because the calculation method of the rent index is decisive for how quickly rents can rise. A longer calculation period has a dampening effect on the rental price development, because older rental contracts are usually cheaper. The SPD wanted to extend the observation period to eight years in their election program, and the Greens even to 20 years. The compromise with the FDP was seven years.
In 2022, the Federal Ministry of Justice commissioned the Federal Office for Building and Regional Planning to use a simulation to discuss the difference an extension to seven years would make. The result available to the taz states that an extension to seven years would only have a very small rent-dampening effect. The Ministry of Justice is ready to do without it entirely, according to Ministry circles. Officially, a spokesman said that no information could be given.
There is one more point: the index rents. These are special leases that are linked to inflation and can increase indefinitely. The German Tenants’ Association reports that especially in the metropolises the number of index rental contracts for new rentals is increasing rapidly. This is not surprising: with high inflation, they are particularly lucrative for landlords.
The criticism of index leases is enormous. The Bundesrat, the Federal Building Ministry, the SPD and Greens parliamentary groups in the Bundestag and the German Tenants’ Association see an acute need for action. The state justice minister of Baden-Württemberg, Marion Gentges (CDU), has also asked the federal justice minister to act. The Left Party goes even further and would like to ban index rents altogether. And what is surprising is that even they Berlin’s CDU has opted for a ban on index rents pronounced.
“But instead of taking up one of the many possible solutions, the minister remains inactive. Although the costs of the landlords are not rising to such a high degree, the minister continues to collect them,” criticizes SPD politician Zanda Martens. Despite criticism, the Federal Ministry of Justice is undeterred: It currently sees no need for action.
The planned projects at a glance:
What currently applies: In general, landlords are allowed to increase existing rents up to the local comparable rent. But you have to pay attention to a few things. So that tenants are not overwhelmed, there is the so-called cap limit. It is intended to prevent rents from skyrocketing in too short a time. Accordingly, a rent may not increase by more than 20 percent within three years. Where living space is particularly scarce and the rental market is considered very tight, rents are only allowed to rise by 15 percent in three years. The state governments can determine for a period of five years which residential areas are considered tense. However, rent increases due to modernization are also possible.
What is planned: In the traffic light coalition agreement, it was agreed to lower the cap from 15 to 11 percent in tense markets.
What currently applies: The rental price brake applies to new or re-letting. If a lease is concluded in an area with a tight housing market, the rent at the time the contract is concluded may not exceed the local comparative rent by a maximum of 10 percent. The state governments determine where there is a tight housing market. So far, the rental price brake has been in effect until 2025. However, it has been criticized for numerous exceptions. For example, the rental price brake only applies to buildings that were first occupied after October 2014. Or: If an apartment has been extensively modernized, the rental price brake can also be overridden.
What is planned: The rental price brake is to be extended until 2029.
What currently applies: Since inflation has risen sharply, index leases have come under criticism. But they are not a new phenomenon. The rent is calculated according to the consumer price index, which is collected annually by the Federal Statistical Office. The rent therefore correlates with inflation. An increase can be made once a year by the landlord by means of a written announcement. Theoretically, the rent can also be lowered if inflation falls, but this must be actively demanded by the tenants.
From the perspective of tenants, there is an advantage: Modernization costs cannot be passed on to the rent as with conventional leases, unless the modernizations are required by law. However, one point is particularly critical: when determining the starting rent, the rental price brake applies. In the further course, however, there is no further limit on the amount of rent – the cap limit does not apply to index leases either.
What is planned: The coalition agreement says nothing about this, but the problem wasn’t that urgent back then. The SPD and the Greens are calling for index rental contracts to be regulated. The Federal Council has also received from the Federal Government in November 2022 a law to adjust index leases required. The Federal Ministry of Justice currently sees no need for action.
Grace period regulation
What currently applies: According to the law, there is a grace period in the event of termination without notice. That means: If a tenant pays the rent arrears within two months, the termination without notice becomes ineffective. In the case of ordinary termination, however, there is no such grace period – this has long been criticized as a legal loophole.
What is planned: The coalition agreement takes up the issue of grace period payments, albeit very vaguely: “In order to eliminate the causes of impending homelessness, we will evaluate and counteract tenancy law, especially where grace period payments prevent the continuation of the tenancy.” Ask the Ministry of Justice whether a change is planned, it is said that no information can be given at the moment.