Justice Ministry Proposes Stricter Rental Laws for Furnished and Short-Term Leases

The German Federal Ministry of Justice has outlined a comprehensive set of reforms aimed at tightening regulations surrounding the rental of furnished apartments and the issuance of short-term rental contracts. The proposed changes are designed to enhance transparency and fairness in the country's residential rental market, particularly in regions experiencing high demand for housing.

Under the new reform plans, landlords in areas with elevated rental pressure would be required to clearly disclose any additional charges applied for furnished properties. This information must be provided prior to the signing of a rental agreement. Should a landlord fail to specify the additional cost attributed to furnishing, tenants would only be obligated to pay the standard rent applicable to unfurnished properties.

The draft legislation introduces a clear guideline for calculating the furnishing surcharge. The proposed scheme stipulates that the additional fee for fully furnished accommodations should not exceed five percent of the net base rent. This calculation would take into account the purchase price and depreciation of the furniture provided in the rental unit, ensuring that charges remain reasonable and reflect the actual value of the furnishings.

Adjustments to short-term rental contracts also form a key part of the reform package. According to the Justice Ministry's proposal, temporary rental agreements would only be exempt from existing rent control measures if the rental period does not exceed six months. Furthermore, such leases would require a specific justification from the tenant's side, such as work-related relocation or other significant personal circumstances, in order to qualify for exemption.

In addition to these measures, the draft reform addresses the issue of index-linked rents, where rental prices are tied to inflation rates. To provide greater stability for tenants during periods of significant inflation, the proposed law would cap annual rent increases on such contracts at 3.5 percent, even if the inflation rate rises higher. This is intended to prevent abrupt and burdensome rent hikes for tenants during times of economic uncertainty.

The reforms also propose changes regarding tenant protection in the event of payment delays. Under the new rules, tenants who fall into arrears would have the opportunity to avert a standard eviction by settling all outstanding rent in full within a set timeframe. This adjustment aims to provide tenants with a single chance to maintain their housing security following payment difficulties, while balancing the interests of landlords.

These newly detailed plans are consistent with prior commitments made in the coalition agreement between the governing parties. The Ministry has circulated the draft legislation to relevant industry associations and stakeholders for feedback before advancing the proposal through the legislative process.

The initiative is part of a broader strategy to ensure fair rental practices and to address challenges posed by a shortage of affordable housing in many German urban centers. By increasing transparency, limiting excessive surcharges, and strengthening tenant protections, the government aims to create a more stable and equitable rental market for both landlords and tenants.