Federal Minister Proposes Revisions to Rent Control for Furnished Apartments

The German government is taking steps to amend regulations surrounding the rent control measures for furnished apartments. Federal Justice Minister Stefanie Hubig has highlighted that existing laws are riddled with loopholes that some landlords exploit. The adjustments aim to close these gaps and ensure fairer rental practices.

In a recent statement, Hubig emphasized that the current framework allows landlords to bypass the rent control measures simply by adding minimal furnishings to their units. This has resulted in significant inflation of rental prices, particularly for furnished properties, affecting tenants' affordability.

The Bundestag, Germany's federal parliament, has extended the rent control measures until 2029, applicable in areas designated by state governments as having tight housing markets. Under these rules, landlords are permitted to set initial rental prices no more than ten percent above the local comparative rent for new leases.

However, exceptions exist for newly constructed units rented for the first time after 2014 and for extensively renovated apartments, while furnished rentals are not exempt. Landlords can impose additional charges for furnishings, which are often not detailed in rental agreements, making it difficult for tenants to understand the total cost.

Hubig intends to establish clearer guidelines regarding the fees landlords can charge for furnishings. She emphasized that there should be a distinction between apartments that are fully equipped for immediate living and those that offer minimal furniture, as this affects the overall rental value.

In addition to these changes, the Minister announced plans to reform the so-called grace period payment rules. This measure is designed to protect tenants from eviction due to unpaid rent. Hubig stated that tenants who are behind on rent should have the opportunity to avoid eviction by repaying their dues.

Moreover, she expressed the need for increased transparency concerning additional costs associated with rentals. This initiative aims to make it easier for tenants to understand their financial obligations, especially in light of rising consumer prices.

The 71st German Tenants' Day, held recently in Rostock-Warnemünde, highlighted the continuing challenges tenants face, particularly with soaring rental prices. The German Tenants' Association (DMB) reported that many households are now spending between 30 to 40 percent of their income on rent, with about 3.1 million households exceeding 40 percent. The DMB President warned that housing has become a significant risk factor for poverty.

The proposed reforms by Minister Hubig are part of a broader effort to address these pressing issues and create a more equitable housing market in Germany.