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#Germany’s toothless rent cap law won’t fix Britain’s housing crisis

G ermany’s new rent control law. which came into force in Berlin this month, has been cited as a possible answer to Britain’s housing crisis. It aims to prohibit landlords from jacking up rents for new tenants to more than 10% above the local average. But don’t get your hopes up. The legislation amounts to little more than a paper tiger that fails to protect the country’s renters.

German renters’ rights groups have panned the law. pointing out that it places the burden of enforcement on the renters, and lacks any sort of penalty for errant landlords who raise rents in excess of the 10% cap.

Here’s how it works: a couple, say, finds an apartment, but they sense that the rent is too high. Or they might ask others in the building or the previous tenant what they pay. Despite misgivings, the couple must actually sign the rental contract containing the illegal rent increase and then take the rental company to court after moving in. In court, they must prove that the rent has been increased more than the legally allowed 10% as set out in regional “mietspiegel” guides (Berlin’s is here ), which German cities have compiled for every block and building in the nation. The owner, in turn, can choose from a list of several exceptions to the law to justify their, say, 30-50% rent increase. If the couple should lose, they could have to pay all of the court costs. Oh, and they might be evicted.

It’s a ridiculous process that encourages conflict and duplicity. And I should know – I accidentally became one of the first people in Germany with a reason to test the law, which passed in March and was implemented in Berlin on 1 June, with a nationwide rollout to follow.

Given the hype that surrounded the law’s passage, I thought taking over my friend’s apartment would be straightforward. Average by any measure, the apartment sits mere metres from the resplendent Bergmannkiez, a lush green neighbourhood that was popular with hippies and squatters in the 70s and 80s, but now ranks as one of the city’s most desirable districts. The idea was that my friend would inform the rental company of my interest and I would sign a contract for a move-in date of 15 August.

“They’re probably going to raise the rent,” my friend noted. “But it can’t be more than 10% – there’s that new law, after all.” They were wrong.

“The new rent is €878.50 plus €275.30 in monthly utilities,” said our rental agent. “So you’ll be paying €1,153.80 every month.”

My friends were paying €630 plus €276 in utilities, for a grand total of €906 a month. My rent would be 39% higher – an apparent violation of the city’s new law.

“Unfortunately, this new law encourages building owners to test out higher rents,” noted Rainer Wild of Berlin’s Mieterverein renters’ legal defence league. “There’s really no risk for them unless people begin to take legal action, as we hope they will.”

To determine the legal rent increase after 1 June, Wild asked me to fill in a six-page questionnaire about the apartment. After plugging data from the questionnaire into a formula, he determined that the legal rent increase was 7%. There are ways to calculate this yourself using various online guides, but Wild’s organisation helps its members with this process.

I hung up the phone, dejected with my lawyer’s analysis and unsure of whether I wanted to walk into a legal battle

My lawyer agreed with Wild’s assessment and urged me to follow his advice: to smile, sign the contract despite the rent increase, move in, and then sue in court.

“If you complain about the rent hike before you move in, they won’t give you the apartment,” my lawyer noted. “Of course, they will probably try to evict you if you pay less than what’s in the rental contract. But we can challenge that.”

I hung up the phone, a bit dejected with my lawyer’s analysis and unsure of whether I actually wanted to walk into a legal battle. As it stands, I don’t think I will. And that’s just what Germany’s real estate lobby was betting would happen.

Yet Britain can emulate the good parts of this law – if policymakers in London avoid lobbyists’ attempts at watering down rental reforms, as happened in Germany.

A UK iteration of this rental control law should have teeth. It should place the legal burden on owners, with penalties for those who break the rules.

Pitting families and individuals against global real estate funds and their teams of lawyers – as Berlin’s law unfortunately does – is not a solution the UK should seek to replicate.




Views: 475 | Added by: mescalinee-1973 | Tags: cap, Law, fix, housing, Britain’s, Germany’s, rent, Toothless, Crisis, won’t | Rating: 0.0/0
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