Renting in Germany: landlord and tenant lease agreement

What points to consider when you sign a lease agreement for a house, apartment or flat furnished or unfurnished in Germany

The landlord and tenant lease agreements for residential rental in Germany are bound by the German law (BGB - civil law legal code). This law was changed as of 1 September 2001 and since then several jurisdictions have been passed to clarify some crucial points. As a result of that, most standardized contract forms have been revised since then to adjust to the legal rules and regulations.

For that reason our first advice always is to use a landlord and tenant lease agreement which has been issued by one of the institutions which professionally deal with landlords and tenants. One of these is Haus und Grund Hessen, located in Frankfurt. Their lease agreement can be filled in online by the landlord or agent and then signed by both parties, and the recommendation is to make as little changes as possible in that standard form. We as an agency also provide a translation of that one. This standard lease agreement can be mailed to you if you are a customer of AllGrund or its partner companies.

Before you sign a lease you should study most carefully and additions, changes and amendmends made to the standard issue. Better, have it read by a person experiences with the german rental laws and regulations, like someone from your HR department or from the Relocation company, and interpret the lease agreement to you.

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Essential points to clarify are:

What costs are included in the "warm rent" (Warmmiete) and which costs are to be covered extra (like electricity, heating, telefone, cable TV, public TV licence fees etc.) Note that "warm" does not mean "heated"! So even a "Warmmiete" can be excluding heating costs which have then to be borne extra.

Very often the contract needs to be limited in time. Whereas in Germany it is now the normal case to sign an unlimited lease with a legal three months notice to the end of the third month, sometimes a landlord and a tenant want to agree on a minimum rental or lease period, like one or two years. For you as tenant such an agreement is binding, so beware before you sign that. Because in case that you have to leave your job, Germany or even just only the flat before that fixed period is over, you are still responsible for payment of rent and utilities until another tenant takes over your old apartment.

On the other hand, signing such an agreement is also binding for the landlord, so in case you want to have certainty that he will not need the flat for himself or in case of selling the house, that the new owner does not come over to you and wants to move in himself, it is a good point to have a fixed term of lease.

Renovations, decorating and painting in the end?

Another vital point and often a matter of dispute is the fact that renovations and decorations must be done by the tenant at the end of the lease or in certain time intervals. This subject not only has been one of the more touchy ones in the past years between landlords and tenants, it naturally also went up to the Supreme Court who passed a decision last year which you should know about. Premium Service customers certainly can have the detailed information, but just as a brief outlook, there are two types of agreements which are legal, one is the decorations and renovations in certain intervalls, in which case a full renovation in the end is most often not needed; the other is a full renovation at the end of the lease by the tenant or at his expense. Because of the complexity of the matter and many details to consider, we do not fully elaborate this here but as mentioned, any Premium Service customer can have the full details if needed, and if you have any question on this matter, just feel free to email us anyhow.

One point is important, though: There is the german term of "Fachgerechte Renovierung". Two words, that can mean a lot of money. The term "fachgerecht" as defined by Duden Dictionary means: according to the expectations and requirements of a certain subject. It implies a certain degree of professionalism in the execution of the decorations. Any rule obliging you as tenant to hire a company for this is not valid, by the way. The tenant always has the right to do the job himself, but it must be done in such a way as any good professional would do it. So before you try and miss on that, rather get some good offers from the Professionals and have it done correctly to start with. As a rule of thumb, a three bedroom flat may require anything between 1.500 and 4.000 EUR to renovate, depending if the parquet floor needs to be sanded and newly sealed or not and so forth. And: Offers vary a great deal between companies. Don't take the cheapest, but also the most expensive ones are not always better than a good one whose price is reasonable. Ask friends or your agent for help on this if needed.

Taking over from former tenants

You may encounter this funny situation where you want to rent a flat but have to buy the kitchen fittings or even the floor covering like laminate, parquet or such from the former tenant. This may be the case when the former tenant has put in these things at his own expense and now has agreed with his landlord that he sells this to the next tenant. In some cases the landlord will say its up to him, in other cases the landlord may only accept a new tenant who takes this stuff.

Agency fee regulations on payments

In Germany, the agency fee for residential renting is usually to be paid by the tenant, not the landlord or owner. Any agency fee is due only when the lease contract is signed. The maximum fee is two months rent plus VAT (currently 16%). This fee normally applies for any rental contract longer than one year. For shorter terms a fee of one to one-and-a-half months rent may be charged, and in case of furnished apartments with an all-inclusive rent the warm rent can be the basis for such calculation.

It is worthwhile to check with ones employer if they pay the agency fee as part of the relocation expenses. Many companies do!

AllGrund Premium Service

The AllGrund Premium Service is for any client who wants top priority service by AllGrund Company and who is at least renting for about 800 EUR rent per month and a duration of about one year. AllGrund can work on your behalf on the home search and also contact other agencies, many landlords and house managers in that respect. If you like to apply for being a Premium Customer, use this form to send us an email. Note that this application does not involve any extra fees or charges. Not all applications can be considered in cases where our personnel are booked out.

Legal Notice: Nothing in this article is to be construed as legal advice. For legal advice consult a lawyer.