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Real Estate Agent Commission: change in law

When you are seeking new accommodation in Germany the recent changes of the Mietnovellengesetz will apply to you - and mostly in a positive way. Whilst it was usually the future tenant who was forced to pay the real estate agent's commission, by law, this is now the one who orders the services of the real estate agent.

If you have ordered the services of The Red Relocators GmbH, we are going to deal with all the implications of that and make sure, you will in fact not need to pay the commission. If you are searching on your own, here are some answers to the most common questions:

  • I want to rent an apartment which I have identified via a Real Estate Agent (REA) before 01.06.2015, but I will only sign the rental contract in June.

The law became efficient on 01.06.2015. It applies to contracts between tenant and REA - not between landlords and tenants. REA contracts that have been entered into before 01.06.2015 continue to be in full force and effect, ie. you have to pay the commission. A REA contract usually is entered when the agent provided you with any further information or simply sends you the same info as published in a web portal.

  • What if you are "forced" to sign a search order?

You cannot be forced legally. But if you feel put under pressure (ie. the RSA indicates that you will not get the apartment unless you sign the search order) the RSA cannot request commission for the apartment you have inquired for (or are visiting at the moment). A search order requires the agent to start searching for the apartment only once you have ordered that service, ie. he is not allowed to present apartments to you which he does already have in his database. If he still requires payment based on a signed searching order, that would be illegal and you could claim it back. However, we don't believe, RSA would go down that path, because they do risk to loose their licence and pay 25.000 EUR penalty.

  • Does ist make sence to put a search order?

Not with a RSA. First, your search order will likely not be exclusive, ie. the RSA cannot be sure he will be entitled to the provision since it is not unlikely some other agent hits home. Second, a RSA would not be allowed to inquire with other RSA, if they have apartments available, he needs to actively adress landlords if by any chance they want to rent out their property. If you want somebody to support you with your search, ask a Relocator.

  • Can the RSA (or landlord) somehow circumvent the law and get his money on a different way?

There are a couple of possibilities:

  1. The landlord asks for higher rent.
    Since the rent is usually already on the upper limit, we don't think such increase will be significant. Experts estimate an increase between 4 - 7 %. The increase would in any case be limited to the value applicable under the "Mietpreisbremse", another new law putting a limit to newly rent housing.
  2. The landlord asks you to buy things (kitchen furniture, blends, lamps, flooring...)
    He can do so, but he is bound to the law, too. He is not allowed to sell anything >50% of the current market price for the same thing. If he did, you can claim your money back, and only few landlords will develop criminal behavior because of the extra cost. Moreover, its yours afterwards. So if you decided to take out the flooring after you move out, or take the kitchen with you, or sell it to the next tenant (as is practice in some German cities like Munich), the landlord could not sell it again.
  3. The landlord offers his apartment on a secret website where only RSA have access to.
    Well. This would be really illegal and if it happens to come to light heavy penalties can be expected. It is thus unlikely, that a majority will explore this possibility.
  4. The RSA cooperates with another RSA - one holds the apartments and the other searches. The commission is then split between them. This is obviously also prohibited.
  5. You are charged a fee for preparing the contract
    This is actually something we see quite regualr now. However, following the decision of a judge (Amtsgericht Hamburg-Wandsbek, Urteil vom 27.05.2004 711 C 36/04 -) this is also not allowed. We will see how this practice develops once the legal background has seeped into the market.
  6. You could be asked to pay under the table
    Well. There is no comment necessary here, is there? In order to prevent something like this, take somebody with you to the visitation appointment. But obviously, you won't get the apartment. We have seen this very seldomly in our practice. And usually, we would not recommend to entering into a contract with a landlord under these circumstances because we would need to assume that he is involved. Such a relation is prone to result in problems.

All-in-all, we do not expect, that the majority of real estate agents will try to circumvent the new law. There will always be black sheeps and you have to be careful in identifying them, but we do not believe that the whole profession turns into the grey world as from now on.

RSA actually do perform. Their services are necessary and worthwhile. It is just that their services predominently benefit the landlord and not the tenant.

Posted in Accommodation.