Inflation is higher than it has been for a long time. Tenants in index apartments also notice this because their rent is linked to the consumer index. Building Minister Geywitz wants to protect tenants from exploding rents. The German Tenants’ Association welcomes the idea, but owners and the FDP do not.
In view of the high inflation, Federal Building Minister Klara Geywitz wants to examine how apartment tenants can be protected against excessive burdens with index rental contracts. She is “not a fan of index rents,” the SPD politician told the newspapers of the Funke media group.
“Especially yield-oriented funds are not at all interested in whether their tenants are getting into more and more trouble as a result of the rising costs,” said the SPD politician. “In our deliberations on measures and instruments that curb or prevent the rise in rents, we will therefore continue to examine how index and graduated rents can do justice to their actual purpose without unfairly burdening tenants.”
In index rental contracts, the rents can be increased annually according to the value of the consumer price index of the Federal Statistical Office. In April, the inflation rate was 7.4 percent. The German Tenants’ Association called for a cap on rent increases for index leases. “There would also need to be a cap on the index rent, analogous to the cap on the rental price brake – although the current limit of 15 percent rent increases in three years and the reduction to 11 percent proposed by the traffic light coalition is still far too high,” said Tenant Association President Lukas Siebenkotten. The owners’ association Haus und Grund rejected this. Index rents are a “fair instrument” for both tenants and landlords, which is less prone to dispute, said association president Kai Warnecke to the Funke newspapers.
The FDP construction expert Daniel Föst demanded that the Ministry of Construction take care of the causes of the housing shortage and the sharply rising construction costs and not just regulate the symptoms. “Removing an instrument such as index or graduated rents does not get us anywhere. In addition, index and graduated rents are not negative per se, as shown. On the contrary. Such contracts are advantageous when inflation is low, as in recent years,” said Föst.
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