Unless it’s a hardship case

Unless it’s a hardship case

Housing costs for tenants have been rising unchecked for years. However, experts are now reporting the first drop in rents – even in Germany’s most expensive city. Is the rental price turnaround imminent?

After years of strong rent increases, real estate experts are seeing a break for apartment hunters. In the first quarter, the German average for new lease rents fell slightly for the first time since 2005, as the research institute F + B reports.

Measured in the final quarter of 2018, rents in newly concluded contracts fell by 0.3 percent. There have also been declines in metropolises like Munich, according to the research institute, which creates data for rent indexes and advises cities and municipalities. It is unclear whether the trend will solidify, says managing director Bernd Leutner.

Existing leases continue to rise

Measured in the first quarter of 2018, new lease rents, which indicate the current direction on the real estate market, rose by a further 2.0 percent. There was also growth in existing leases: from January to March 2019 they rose slightly by 0.4 percent compared to the previous quarter and by 1.4 percent compared to the same quarter of the previous year.

Leutner says that tenants are less willing to move. “Anyone who moves has to expect a significantly higher rent per square meter.” This would mean that only a limited amount of living space would be available, which would increase the tension.

Calls for radical action

In view of the rapidly rising rents, especially in cities, calls for radical measures have become louder. There is a debate in Berlin about the expropriation of real estate groups. Frankfurt’s Lord Mayor Peter Feldmann (SPD) recently campaigned for a rent cap.

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Private landlords should only be allowed to raise rents in the city by one percent per year, he suggested. However, the state of Hesse was skeptical about a demand for a corresponding statutory order.

Bank customers do not have to pay a real estate loan rescheduling fee. Financial institutions must not make this change unnecessarily difficult for customers.

The rescheduling of real estate loans must be free of charge for bank customers. The Federal Court of Justice (BGH) decided on Tuesday in Karlsruhe. The expense of the bank for a trust order was settled with the interest, said the chairman of the XI responsible for banking law. Civil Senate, Jürgen Ellenberger. (XI ZR 7/199)

The concrete case

The Federal Association of Consumer Organizations had sued a financial institution from Steinfurt in North Rhine-Westphalia because it demands 100 euros if a borrower wants to continue financing his property with another bank after the fixed interest rate has expired. It is the bank’s duty to enable the customer to switch to another credit institution, argued the lawyer for the federal association.

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With such a rescheduling, the land charge and the transfer fee are transferred step by step between the banks involved. Borrowers have the right to switch to another bank at the end of the fixed interest rate. Financial institutions must not make this change unnecessarily difficult for customers.

In the event of termination due to personal needs, the tenant usually has little chance. Unless it’s a hardship case. The BGH is now investigating whether a demented elderly woman has to vacate the apartment for a young family.

A couple lives in a two-room apartment.https://123helpme.me/community-service-essay/ There are offspring, with two children it will be tight. The young family wants to move into the recently purchased 73 square meter three-room apartment in Berlin. But an 80-year-old lives there. For half your life. The tenant is demented. She does not want to go out and defends herself against the termination for own use. Who needs the apartment more urgently? The Federal Court of Justice (BGH) in Karlsruhe is currently examining this and one other case.

From the point of view of the Berlin Regional Court, termination for personal use is effective. But the old lady still doesn’t have to vacate the Berlin apartment. The woman who lives there with two grown sons might not find her way anywhere else. In addition, affordable replacements are rare in Berlin. The court sees a hardship case. With his appeal before the BGH, the landlord – the father of the family – now wants to enforce the eviction.

Owner registers her own use – tenants defend themselves

The second case takes place in a town with a population of 9,000 in Saxony-Anhalt: In Kabelsketal, two tenants are fighting against being thrown out of a semi-detached house. The owner announced her own needs: She wants to move in with her partner – originally to better support the grandmother in need of care nearby.

The grandmother has since passed away. The tenants, who have been living in the house with two relatives since 2006, see their own needs as a priority. They also consider it unreasonable to move due to serious illnesses. Parkinson’s, depression, chronic spinal complaints, 50 percent disability as well as care level II and alcoholism are listed. The district court in Halle nevertheless considers the move to be reasonable and confirms the personal needs. In contrast, the tenants appeal to the BGH.

Resignations for personal use: when are they legal?

Two cases that the highest German civil court is now using as an opportunity to scrutinize a regulation: the hardship clause in the case of personal use dismissals. According to the law, a landlord can terminate a tenant if he claims his own needs for himself, his family or members of his household. The tenant can defend himself against this with reference to a hardship case.

But when is that the case? According to the law, for example, if a suitable replacement apartment cannot be obtained on reasonable terms. In the opinion of Ulrich Ropertz, Managing Director of the German Tenants ‘Association (DMB), criteria such as old age and illness should generally outweigh landlords’ interests.

80,000 redundancies a year

In the case of serious illness and dementia, tenants also have good cards from Beate Heilmann, housing law expert at the German Bar Association. For her, however, this does not mean that old always trumps young: “If a 65-year-old can swim and do sports three times a week, he can move too.”

“The balancing of interests is always an individual decision,” admits Ropertz. But the problem affects many. The managing director of the tenants’ association is currently assuming 80,000 redundancies a year and criticizes: “The courts have weakened the criteria for personal use in recent years.”

“Not always easy to implement”

The President of the House Grund Germany, Kai H. Warnecke, warns against “one-sided propaganda”. According to him, disputes over rental property – including notices for personal use – are continuously falling. In 2017, 217,801 cases were heard in court, 18 percent fewer than four years earlier.

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If the young family is defeated by the BGH, this is of course unjust from their point of view and presents them with very significant problems, says Warnecke. In his experience, potential buyers who want to use an apartment themselves at some point have to have in mind when buying one “that personal use is not always easy to implement”.

People with their own house or apartment can be happy. The value of real estate should continue to rise in the next few years. Where the highest increases are expected.

There is no end in sight to the rise in residential property prices. Prices continue to rise, especially in and around urban centers, as the Postbank’s “Housing Atlas 2019” shows. According to the purchase price forecast, residential property will increase in real value in more than half of the 401 German districts and cities by at least 2030.

One reason is the increasing number of inhabitants in and around the metropolises as well as in southern Germany, as the experts from the Hamburg World Economic Institute (HWWI) write.

Berlin with the smallest increase among the “Big Seven”

Property prices in Germany’s most expensive city will continue to rise sharply: For Munich, the experts are forecasting an annual increase of 1.81 percent in real terms. Property buyers in the Bavarian capital already had to pay an average of 7,509 euros per square meter in 2018.

In second and third place are Düsseldorf with a rate of increase of 1.09 percent and Cologne with 0.98 percent. In Frankfurt am Main and Berlin, prices will rise by 0.76 percent annually until 2030. This is the smallest increase among the so-called Big Seven, the seven largest metropolises.

Good general conditions in the south and north-west

Anyone wanting to buy a condominium in a big city “should take a closer look, because individual properties, for example in the trendy neighborhoods, could be overpriced in an overheated market,” advises Eva Grunwald, who heads Postbank’s real estate business. Those who are interested should also look around the coveted urban centers, but get competent help. “An expert can help to find and evaluate worthwhile properties, for example in neighborhoods adjacent to the particularly sought-after locations,” recommends Grunwald.

But the biggest price jumps are not only to be expected in the big cities. According to the “Residential Atlas”, owners and prospective buyers will find good general conditions for residential property almost consistently, especially in the south and northwest of Germany, even apart from the “Big Seven”. Seven Bavarian districts are among the top ten with the highest forecast increases in value. Three of them – the districts of Munich, Erding and Ebersberg – border the state capital.

Neighboring cities benefit from metropolises

The experts also expect a positive price trend for the greater Berlin area. According to the forecast, the average increase per year is likely to be particularly steep in the Oberhavel district (plus 0.97 percent) in the north of the capital. This means that prices there are rising faster than in Berlin itself.

The Brandenburg state capital Potsdam in the Berlin bacon belt even makes it into the top ten: There, experts predict annual growth rates of 1.69 percent. The experts forecast the steepest rise for Heilbronn. In the city in Baden-Württemberg, residential real estate is likely to become 2.29 percent more expensive annually by 2030.

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Price increases of more than one percent per year until 2030 are also likely to occur in the independent cities of Landshut, Dresden, Leipzig, Aachen, Ingolstadt and Münster. “These cities benefit from the fact that the record prices in the metropolises have a deterrent effect in some cases and that smaller centers are being considered as an alternative,” explains Postbank expert Grunwald.

Sources used: AFP news agency

Rents in Berlin are rising much more slowly. This is shown in the rent index for 2019. According to this, the average net rent excluding heating is 6.72 euros per square meter.

Rents in Berlin have risen much more slowly in the past two years than in previous years. The Senate announced at the presentation of the 2019 rent index on Monday that the average net rent excluding heating is 6.72 euros per square meter.

From 2015 to 017 rents rose by 4.6 percent

This means that it has increased by 2.5 percent annually since the previous rent index was presented in 2017 – significantly more slowly than in previous years. From 2015 to 2017, rents had increased by 4.6 percent annually.

For the first time since 2013, all six participating tenant and landlord associations have signed the rent index, said Senator for Urban Development Katrin Lompscher (left). That is a good sign and leads to more legal certainty. Landlords had repeatedly sued against the application of the rent index and in some cases were also right in court. Lompscher hopes that recognition by all six associations will reduce the risk of litigation.

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Rent index is the guideline for rent control

Every two years, the rent index provides an overview of standard local comparative rents for almost 1.4 million non-price-controlled apartments in Berlin and is also the guideline for the so-called rent brake.

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