Rental price brake: Katarina Barley plans upper limit for rent increases

The Minister of Justice wants to make the rental price brake more effective. According to a report, its draft law provides for more stringent obligations for landlords and modernisations.

Rental price brake: Katarina Barley plans upper limit for rent increases

It has already been agreed in coalition agreement, now Justice minister Katarina Barley has submitted a draft bill: SPD politician has reworked rental price brake so that increase in rents can finally be effectively limited, reports Mirror, citing design. The previous rental price brake has missed desired effect so far. The bill was sent to vote with or departments.

According to report, landlords should inform ir tenants in future if y want to demand a higher rent than usual comparison rent. Until now, tenants had to demand information about a high rent. According to bill, it is also easier for tenants to complain about an expensive rent.

In addition, landlords should be able to pay only eight percent of ir renovation costs to ir tenants. This was a necessary step in view of "significantly reduced level of mortgage rates", according to Ministry of Justice. This regulation is limited to five years.

There should also be a kind of ceiling for rent increases due to modernisation of apartment. As a result, tenants should know right from start to what amount rent could rise in highest case. So y should "be able to better judge wher y can afford rent for ir apartment in coming years," it says in draft. Specifically, this limit is three euros per square metre of living space. It could be raised within six years after completion of a modernisation.

It is also difficult for landlords to push tenants out of flats by modernising ir homes for abusive motives. According to report, this is to be considered an offence. For this, it is already abundant to announce such modernisation. According to report, draft provides for damages.

In June 2015, rental price brake introduced in areas with a "tense housing market" limits cost of new or re-renting to level of local comparison rent plus ten percent. The comparison rent is calculated on basis of completed rental contracts from previous four years. The rental price brake is considered to be largely ineffective. One weakness is that re are no sanctions against landlords who do not comply with rules.

According to Barleys, bill is based on a corresponding plan of its predecessor, Heiko Maas (SPD). It was not adopted because Coalition could not agree on contentious details in last parliamentary term.

The Union and SPD have agreed in coalition agreement to promote social housing and to limit increase in rent in large cities. DieSPD Party and Group chairman Andrea Nahles has already announced plans for Baukindergeld.

Date Of Update: 05 June 2018, 12:02

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