Most landlords in Germany will try to pass on the inflation costs to tenants. Here is a checklist on how you can successfully object to and defend yourself against a sudden rent increase due to inflation.
Sudden rent increase due to inflation: There is fear of rent rising with inflation in Germany. High inflation makes index leases attractive for landlords – and a cost trap for tenants. Because completely different rules apply to rent increases than to normal contracts.
▶︎ High inflation makes index rent agreements attractive for landlords – and a cost trap for tenants. Because completely different rules apply to rent increases than to normal contracts.
If you signed an index rental agreement, you should worry about a sudden rent increase due to inflation
The importance of graduated and index rent
Graduated tenancy agreements and indexed tenancy agreements contain regulations as to when and by what amount a rental price should change.
A graduated rental agreement determines exactly when and how much a future rent adjustment will be. Graduated regulations apply with a maximum term of four years and can also be agreed within the framework of unlimited rental contracts. After a graduated rent has expired, the rent increase rules for comparable rents (§ 558 BGB) apply.
An index rental agreement links changes in the rent to the development of the consumer price index and inflation. If the cost of living increases, landlords can also increase the rent. Index leases can be concluded for an indefinite period.
Calculation of the index rent
The increase for an index rent can be calculated using the following formula: (new index level / old index level x 100) – 100 = percentage index increase
When the contract is signed, for example, the basic rent is 600 euros and the consumer price index is 106.6 points. If the new index totals 109.3 points, the index percentage increase is 2.5 percent. Because: (109.3 / 106.6 x 100) – 100 = 2.5 percent. The rent increases by 2.5 percent from 600 euros to 615 euros.
How to review a sudden rent increase due to inflation
Look for errors in the rent increase form!
The letter must be addressed to you and all tenants in the rental agreement and contain a reason.
▶︎ The request for a rent increase must always be explained in text form: A shout in the hallway and even a notice in the stairwell are not enough – you can ignore something like that.
Check the deadlines!
The rent may be increased one year after the start of the rental period or the last increase. Plus a period of reflection, the rent may only increase after 15 months.
Wording example: refusal of consent due to non-compliance with the blocking period
Your request for an increase of … is not effective.
I reject the rent increase because the blocking period according to § 558 paragraph 1 sentence 2 BGB is not observed.
We agreed on an amicable rent increase months ago.
This means that your current request for an increase is invalid.
Check the increase amount!
There is the so-called cap limit: A landlord may not increase more than 20 percent within three years, in expensive cities such as in Munich, Hamburg and Berlin no more than 15 percent. Your landlord must also remain below the rent index.
Wording example: Partial approval because the cap limit was exceeded
I do not fully agree to your request for an increase of … but only partially in the amount of an increase of … euros.
A rent increase beyond this is not justified, as the agreed rent may not increase by more than 20 percent within a period of three years.
With the claimed increase, you exceed this limit. This means that from … the rent will be … euros per month.
Check your local rent index!
An apartment must not be more expensive than the local rent index indicates. How much the neighbor pays is therefore initially irrelevant. In addition to the location, the size, the year of construction and the equipment are also included.
Caution: Features that increase the quality of living are often claimed that do not exist at all, including high-quality tiles or a perfect fitted kitchen.
If there is no qualified rent index available?
Only then can your landlord use three comparable apartments as justification. But they must be verifiable by the tenant.
Wording example: Partial consent due to incorrect local comparative rent
In your letter dated … you request my consent to an increase in rent from … euros to … euros.
For the time being, I cannot agree to this rent increase in full, but only in the amount of an increase of … euros.
The new rent is from … thus … euros.
Your calculation of the local comparative rent is incorrect. The three comparable apartments you mentioned to justify the rent increase do not correspond to my apartment. You have disregarded the following impairments: … [description of impairments].
The rent index for … [name of the municipality] results in a comparative rent of … euros/sqm.
My consent to the rent increase corresponds to the comparative rent provided for thereafter.
Measure your apartment!
Often the square footage doesn’t match the lease and you can adjust the rent accordingly.
▶︎ How to proceed: Divide your apartment into non-overlapping rectangles and determine the length and width. Multiply these and get the square footage of the rectangles. Now add the rectangles together.
▶︎ Important: Areas under sloping ceilings under one meter are not charged at all and between one and two meters only 50 percent.
Do you have a graduated or index rent?
A graduated rental agreement stipulates in advance how the rent will increase at a certain point in time. With the index contract, the rent adjusts to the inflation rate every year. In both cases, the landlord may not go beyond this.
Does the rental price brake apply to you?
In the case of a new rental, the rent must not be more than ten percent above the local rent index (except for new buildings after October 2014).
Is the increase required due to modernization measures?
Your landlord must announce the measures and the associated increase. These costs cannot be passed on to your rent if, for example, you are experiencing exceptional economic hardship.
As a rule, the landlord is only allowed to pass on eight percent of the modernization costs per year to the rent. Unnecessary costs are not allowed, such as installing gold fittings.
▶︎ Check whether the modernization might not involve maintenance, like replacing an equivalent sink. Only if you really have an advantage, such as installing a bathtub for the first time, could it actually be a modernization.
Do you live in a furnished living space?
Here the living space is part of the apartment inhabited by the landlord and furnished by him. The rent increase to adjust to the comparative rent is not permitted!