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The growing fear of tenants – and landlords

For many tenants in Germany things will be tight this winter.

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The growing fear of tenants – and landlords

For many tenants in Germany things will be tight this winter. In older residential buildings in particular, heating costs are likely to skyrocket. In addition, landlords have increased rents in some cases significantly in recent years, especially in metropolitan areas. Where index rents have been agreed that are linked to inflation, there is a risk of extra price surcharges.

The German Tenants' Association is therefore sounding the alarm. "The majority of tenants are left alone with both the ever-increasing rents and the exploding energy prices and thus with an immense cost burden," says Melanie Weber-Moritz, Director of the German Tenants' Association to WELT.

The federal government's third relief package gives her little hope. "The danger is very high, since this relief package does not contain a moratorium on terminations, nor are households with low incomes receiving housing benefits adequately supported in the face of skyrocketing energy prices," says Weber-Moritz.

In the SPD parliamentary group, there was already a proposal at the beginning of July to set up a moratorium for financially overwhelmed tenant households. Similar to the pandemic year 2020, tenants could, for example, be given the opportunity to defer payments. However, because this means that the burden is passed on to the landlord, there was also a hardship regulation for them and the possibility of suspending loan payments.

In fact, tenant protection is only addressed in very general terms in the third relief package. "It is ensured that the tenants who are financially overwhelmed by the increases in their operating cost advance payments in the short term are adequately protected by the regulations of the social tenancy law," it says there. In the Federal Ministry of Justice, this is understood as an indication that tenancy law is already socially structured.

Justice Minister Marco Buschmann (FDP) used this argument to reject a moratorium on layoffs. Tenants and landlords should fight in court "if the landlord turns off the hot water," he said in July. Nothing more has happened since then.

At the weekend, the Federal Minister for Building, Klara Geywitz, made another move. In an interview with "Bild am Sonntag" she called for an additional payment option for tenants in the event of energy cost overload: "In the case of ordinary terminations due to rent arrears, we also need the possibility that the amount due can be paid back by the move-out date in order to cancel the apartment termination again," according to the minister.

However, the extension of such grace period payments has already been agreed in the coalition agreement, together with other tenant protection rules such as an extension of the rental price brake until 2029 and a reduction in the cap to eleven percent.

When asked, a spokesman said: “The BMJ is working on the implementation of the tenancy law projects agreed in the coalition agreement. According to current planning, a corresponding legislative project is expected to be launched before the end of this year.”

As far as energy costs are concerned, the Minister of Justice plays the ball on to Robert Habeck's Ministry of Economic Affairs and refers to another passage in the relief package: "If individual consumers (...) cannot pay their costs in the current situation, electricity should be cut off and gas can be prevented by waiver agreements. The energy law will be adapted accordingly.” But not much has happened here either.

Time is of the essence, and nervousness is also growing in the real estate industry. There one is obviously aware that there can be serious payment difficulties, which ultimately get stuck with landlords. Like the central association of the housing industry GdW recently, the industry association Central Real Estate Committee (ZIA) is now demanding a price cap – for natural gas.

“We are currently observing a five or sixfold increase in costs for apartment tenants due to skyrocketing gas prices. As an exception, this extraordinary crisis situation justifies the market intervention with a cap," said ZIA President Andreas Mattner. The ZIA had always protested sharply in the case of market interventions such as rental price brakes or capping limits. The federal government's aid packages for the needy are useful, but they focus too much on symptoms, says Mattner.

In Berlin, the Senate is meanwhile creating facts and on Monday decided on a moratorium on evictions for the approximately one million tenants of the state-owned housing companies. Losses due to unpaid rents are to be compensated for via the state budget.

Politicians in other European countries have already reacted. In Spain and Portugal, a kind of price cap has recently come into force across the country: rents there can only be increased by two percent per year.

"Everything on shares" is the daily stock exchange shot from the WELT business editorial team. Every morning from 7 a.m. with our financial journalists. For stock market experts and beginners. Subscribe to the podcast on Spotify, Apple Podcast, Amazon Music and Deezer. Or directly via RSS feed.

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