Tenancy Law: Rent Increase by Citing Comparable Apartments - Requirements - Rechtsanwalt Helmer Tieben
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District Court of Friedberg, Judgment of 24.03.2023, Case No.: 2 C 790/22

There are various ways to increase rent. This is illustrated in the following graphic. For example, regular rent increases, rent increases after modernization, or rent increases in the case of stepped or indexed rents.

In the context of regular rent increases, the rent can be raised based on the rent index or comparable apartments. However, for comparable apartments, the rent increase request must meet certain requirements:

 

      • Three comparable apartments are mandatory
      • Location of the comparable apartments
      • Square footage of the comparable apartments
      • Specific details about location, age, and amenities
      • Identification of the comparable apartments

How does rent increase in Germany work?

Case facts:

The landlord sought to enforce a rent increase based on comparable apartments.

The plaintiff was the landlord, and the defendant was the tenant of an apartment. The plaintiff requested the defendant’s consent to increase the net rent for an apartment rented by the defendant under a rental agreement dated 06.09.2015.

The apartment had a monthly net rent of 1,380.00 EUR. In a letter from the plaintiff’s attorney dated 26.07.2022, the plaintiff requested the defendant’s consent to increase the net rent by 274.00 EUR to 1,654.00 EUR as of 01.10.2022. The letter stated that the apartment had a living area of 220 sqm, so the price per square meter would increase from 6.27 EUR to 7.52 EUR. The plaintiff cited six allegedly comparable apartments to justify the rent increase.

In the rent increase letter, the landlord introduced six comparable apartments.

The defendant argued that the comparable apartments mentioned in the rent increase request were not comparable, not sufficiently specified, non-existent, or not comparable. Additionally, the apartment was not located in the city center but only in the core city and had an area of only 184.36 sqm.

Since the tenant did not agree, the landlord sued him.

Thus, the defendant did not consent despite the deadline set. Therefore, the plaintiff sued the defendant in the District Court of Friedberg for consent to the rent increase.

Judgment of the District Court of Friedberg

The court found the rent increase letter to be invalid.

The District Court of Friedberg ruled that the rent increase request dated 26.07.2022 did not meet the requirements of § 558a paragraph 1 sentence 1 of the German Civil Code (BGB). It was formally invalid, and the lawsuit based on it was therefore inadmissible.

According to § 558a paragraph 1 BGB, the request for a rent increase must be explained and justified to the tenant. The justification should enable the tenant to verify the factual legitimacy of the increase to avoid unnecessary litigation. For this, it is necessary that the justification provides the tenant with concrete information about the factual legitimacy of the increase so that they can evaluate the legitimacy during the consideration period and decide whether to agree or not. Although excessive demands should not be placed on the justification requirement concerning the landlord’s fundamental right under Article 14 of the Basic Law (property guarantee), the request must, in formal terms, include details of the facts from which the landlord derives the justification for the requested rent increase. This must be sufficient for the tenant to at least partially verify the legitimacy of the increase. This was not the case here.

At least three comparable apartments must be named and clearly specified.

In the case of a rent increase based on comparable apartments, the addresses, floor levels, and positions on the floor (left, right, etc.) must be so precisely provided that the tenant can easily locate them without independent research. Therefore, comparison object No. 2 was deemed unsuitable as the address did not exist in Bad Nauheim. Furthermore, the apartments must be comparable.

Four of the landlord’s six comparable apartments were not comparable.

A generous standard must be applied. The mention of comparable apartments in a rent increase request is not intended to prove the local comparable rent but to give the tenant an indication of the legitimacy of the request, allowing them to at least partially verify the rent increase. The law only requires that the apartments be “comparable” and not “corresponding” or “identical.” However, the comparable apartments must not belong to a different residential sub-market upon evaluation. Such sub-markets include, for example, small apartments, large apartments, luxury apartments, standard apartments, comfort apartments, simple apartments, single-family homes, penthouses, etc.

In conclusion, the rent increase request was invalid.

It was undisputed that comparison object No. 1 was a commercial property. Comparison objects Nos. 5 and 6 were undisputedly single-family homes or terraced houses. Therefore, only comparison objects Nos. 3 and 4 could possibly serve as a basis for the request, meaning that the required number of three comparable apartments was not met, rendering the rent increase request invalid.

Source: District Court of Friedberg

Important Notice: The content of this article has been created to the best of our knowledge and understanding. However, due to the complexity and constantly changing nature of the subject matter, we exclude liability and warranty.

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Lawyers in Cologne provide advice and representation in tenancy law.

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