Before signing a rental contract it Germany, there are a few things you should watch out for. In this blog post we give you the low-down on those areas that are important.
Renting in Germany – keep an eye on these eight things
German rental contracts and agreements are not standardized but underlie general legal assumptions. If certain sections and articles therein do not comply with German law, you may simply ignore these. Often it may be to the advantage of the renting party if a proprietor lists clauses that are not in accordance with governing law.
Given the approval by the property owner, your agent will furnish you with a rental contract. If not, you can find sample templates for download at no charge here.
In any contract, these few important points are worth keeping an eye on:
Check the baseline information
- You and any other person who plan to live in your rented household should be listed in the agreement.
- Make sure that the apartment or house is precisely described in terms of its address, size (square meters), number of rooms and accurately lists any additional features ie. a built-in kitchen, closet etc.
- Contrary to a most standard rental agreement (Standard-Mietvertrag), a time-limited contract (befristeter Mietvertrag) should state the exact reason for its limited time duration. Note that such agreements may be to the detriment of the renting party. A befristeter Mietvertrag is not as flexible as a standard agreement by German law. For example, you cannot terminate the agreement before its expiration, nor can you extend it if the owner does not agree.
- A standard rental agreement may be terminated by either party with a three-month advance notice. Once again the owner of the home is at a disadvantage according to German law, because his/her termination is only accepted if he/she can prove his/her home is needed for personal use. It is also not uncommon that the rental agreement settles on a minimum rental duration of up to a maximum of 4 years if both parties feel this is in accordance with their mutual goals.
- Most rental agreements are broken out by a fixed monthly rent (Kaltmiete / “cold rent”) and extra charges like heating and water. These charges are known as Nebenkosten or Betriebskosten in German. Together these two components constitute the full rent (Warmmiete / “warm rent”). Monthly, full rental payments thus include both the fixed rent as well as a prepayment for all the extra charges. Once a year (mostly during the middle of the following year) the proprietor will send you an exact statement (Nebenkostenabrechnung) of the actual extra charges with supporting documents listed against all your prepayments of the past year. Depending on your consumption, you will either receive a refund or be required to settle any back payments. In case you’re unsure that the extra charges accurately reflect actual consumption, ask the landlord for a copy of last year’s statement to check.
- Please note that electricity (Strom) is not included in the monthly extra charges (Nebenkosten). Instead, you need to sign up with a provider of your choice to ensure that your new home lights up and all your electrical appliances work. Similarly, a fixed-line telephone connection is not included in the Nebenkosten. Sometimes cable TV may be included in the extra charges, but not always. It’s probably best to get a triple-play telephone/cell-phone + TV + Internet package from a provider that operates in the vicinity. In both cases (electricity and/or phone+TV+Internet), it’s worthwhile checking portals such as Verivox or Check24 to find the best provider for such services.
- Almost all rental agreements include sections that detail renovation obligations when moving out and decorative repairs during the period of rent. Many cases have ended in German courts between disputing parties. As a result, a plethora of inconsistent recommendations exists and lead to much confusion in the market. To keep things simple, here’s a rule of thumb which is sure to avoid later conflict: Make sure that the house or apartment is fully renovated before signing the agreement and detail any shortcomings you find in written and signed form before moving in. When you move out, make sure your temporary abode is in the same state as you found it when you moved in ie. fully renovated. That’s mutually fair. If the contract states any decorative repairs (Schönheitreparaturen) by the renting party after elapsed time intervals during the rental period, you can simply ignore these. After all, you plan to return the home in the same state as you found it.
- Last but not least, please ask your agent for the Rules of the House (Hausordnung). This is usually a document of several pages that list basic policies on resting times, things to note if pets are allowed, pots and plants on your balcony, and other guidelines that encourage amicable relations within the house community.
Standard versus time-limited rental contracts
Fixed monthly rental costs and extra charges
Your obligations upon termination
Know your “Hausordnung”
A lengthy contract may seem overwhelming to any newcomer to Germany. Yet, rest assured, it is the basis for a trustworthy relationship between tenant and owner, and clearly outlines rights and obligations with respect to neighboring parties in the same building, should you opt for an apartment.