Communities and Local Government CommitteeWritten evidence submitted by Daniela Wagner, Member of the German Bundestag and Spokeswoman on building and housing policy
1. Quality of Housing and Regulation
For newly built housing, quality is determined via the relevant legal standards. In addition to this, various “labels” and certificates exist.
Financial support is available for measures which go beyond the standards laid down by law, eg via the financial assistance programme of the KfW (Reconstruction Loan Corporation) for energy-efficient construction and modernisation of buildings.
With regard to the existing housing stock, legal standards exist which are laid down in the sections of the German Civil Code governing tenancy law. These mainly deal with the conditions governing rent increases.
Beyond this, the principle of contractual freedom applies in Germany.
2. Rent Level Surveys and Rent Control
Rent level surveys are carried out in Germany in order to justify rent rises up to the level of representative rents customary in the locality. The idea of such surveys is to provide an overview of existing rents on the housing markets. The normal level of representative rents customary in the area can also be established via other instruments apart from rent level surveys (three comparable dwellings). The provisions governing the compiling of rent level surveys are laid down in the Civil Code.
Towns and cities with at least 50,000 residents can provide an overview of the development of rents by means of rent level surveys. These surveys may be negotiated between the market participants or compiled using scientific methods (“expert rent level surveys”). We recommend that these surveys should be compiled using scientific methods.
Increasingly, “ecological rent level surveys”, which also take into account energy-efficiency levels, are being introduced by city governments. From 01.05.2013 onwards, the level of energy efficiency will be included as one of the basic criteria for the calculation of comparable rents in the locality.
Rent level surveys may allow rents to be higher or lower depending on the condition of the dwelling, standard of fittings and energy consumption.
For existing tenants, rent may be adjusted to take account of current price developments on the rental markets. These adjustments are subject to limitations, however: rents for existing tenants may only be adjusted every three years by a maximum of 20%, as laid down in German tenancy law.
3. Interaction between Housing Benefit and Rent
We suspect that landlords react to increases in benefits paid to individual households. This effect can be observed in particular with regard to the costs of accommodation for the unemployed and social-security recipients. We do not have any statistical data on this, however.
If a dwelling no longer complies with legal standards and the landlord fails to rectify the defect, tenants have the right to reduce the amount of rent they pay. Tenants must, however, be able to prove that this is the case. The percentage by which tenants are able to reduce rent depends on the particular defect.
In Germany, there is not a great deal of regulation concerning the right to operate as a property agent. The agent’s facilitation fee can even be charged to tenants through they have not commissioned the agent. This is something which we criticise and we are calling for the introduction of a principle whereby the fees would be paid by the commissioning party.
The level of agents’ fees for bringing together tenants and landlords in the rented-housing sector is currently laid down by law: pursuant to Section 3 (2), sentence 1 of the “Act on the Facilitation of Rented Housing” (WoVermRG), this fee may not exceed two months net rent (excluding running costs and costs for heating and hot water supply).
The level of agents’ fees for the sale of dwellings is not regulated by law.
6. Regulation on Houses in Multiple Occupation
No special regulations exist concerning houses in multiple occupation. The regulations governing tenancy apply to all tenancies.
7. Tenancy Agreements/Tenancy Contracts, including the Length and and Security of Tenure
In Germany, tenants are always keen to have long-term tenures; this is also recommended by the German tenants’ association.
Once a tenancy contract has been signed, German tenancy law makes it very difficult for landlords to terminate the contract. This is only possible either where landlords are able to prove breach of contract or in cases where they (or close family members) intend to use the dwelling themselves. Statutory periods of notice vary according to length of tenure. In other cases, the length of tenure agreed in the tenancy contract applies.
Deviating agreements to the disadvantage of the tenants in tenancy contracts are invalid.
8. How Local Authorities avoid the Homelessness Tax by Putting the Homeless up in Private Housing
Germany does not have a homelessness tax.