From Andrea Thomas
BERLIN (Dow Jones) – The federal government wants to reform the rent index law and presented a draft law on Thursday. The Federal Ministry of Justice and the Federal Ministry of Justice explained that this should improve the quality of data collection and the dissemination of rent indexes and increase legal security for tenants and landlords. The significance of the rent index and its acceptance should also be strengthened.
With the reform, the government also wants to create an incentive for qualified rent indexes to be drawn up for as many communities as possible. In the past few years there have been significant rent increases, especially in metropolitan areas. With the reforms, the federal government wants to improve the situation for tenants.
In Germany, the rent index is usually used as a reference point for determining the local comparative rent. They are then used to justify rent increases and to determine the permissible new contract rent within the scope of the rental price brake.
The draft law now provides that landlords can only justify a rent increase in future with a qualified rent index or an expert report. The reference to the rent in comparable apartments is no longer accepted as a reason for a rent increase.
The deadline for adjusting rent indexes will also be extended from two to three years. Qualified rent indexes must also be re-created after five years at the latest, whereby tenants and landlords must provide information about their tenancy and the characteristics of the apartment.
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(END) Dow Jones Newswires
September 24, 2020 7:07 am ET (11:07 am GMT)