Lease Agreements are a tricky area. Especially, because a lot of changes happen to the rules and case law has an important impact. Numerous standards have been established over the years, some respecting latest developments more, others less.
Up to the limit - or beyond
Since in most of Germany’s cities the real estate market is a landlord’s market, it is the landlord’s advantage to present and insist its own template. Most private owners rely on a template drafted by the “Grundeigentümerverband”, an owners’ club, and you can be relatively sure that the rules stipulated therein are carefully reviewed by educated lawyers – unfortunately to the best of the landlord and not the tenant. Sometimes, landlords even accept the risk that a specific clause is not in conformity with the law, trusting on the naivety or good faith of the tenant or simple on his financial inability to consult a lawyer.
Usually, a tenant will not be able to negotiate a lot of terms. Anything that is accepted as standard will be hard to change. Where a stipulation crosses the legally allowed limit you can usually negotiate since the landlord is interested in a less strict – but valid – clause once he understands that he is speaking to a reasonable and knowledgeable person.
TYPICAL CRITICAL STIPULATIONS
Beauty Repairs “Schönheitsreparaturen”
Landlords will tend to have you renovate the apartment in regular intervals and if you don’t that you participate in the repair of any normal wear and tear on a pro-rata basis. However, to put it in short, whether or not you are obliged to renovate your apartment depends on its status at the time of your move. Should the landlord have handed the apartment to you in an unrenovated state, you are not obliged to renovate AT ALL.
Who is the contract party?
Sometimes, several landlords sign as contract party to a lease agreement and sometimes a real estate administration office is introduced handling all matters relating to the contract. If you are not sure to whom to address important messages (ie. cancellation notices or request for urgent repairs).
If you move in as a couple, married or not, the landlords will usually require that both of you sign the contract. That means, that they can ask both of you at the same time to perform the contract (ie. pay the rent).
Size of the apartment
If the apartment is physically in the same building as the landlords own apartment you need to pay special attention to the size mentioned in the contract, since this will be the base for your share of the side cost. Sometimes, landlords mark down a too high number of m² - if they deviate by more than 10% you are entitled to a rent decrease.
What is part of the rented object
Whatever is “rented out” to you can only be withdrawn by way of cancellation. On the other side, anything that is granted to be utilized can be withdrawn whenever the landlord deems fit. Typical subjects are storage rooms, parking places, garden houses, kitchen furniture, washing machine and tumbler in the basement.
Limited rental periods
Even if you go for a furnished apartment, the rental period is not limited just because it says so. Limitations of rental contracts require profound and specific reasoning (ie. the landlord wishes to move into the apartment after the nominated period). In case of a limitation it is however necessary to respect consequential processes: ie. if you want to prolonge you have to respect the given period, whereas if you don’t you don’t need to give notice.
Whilst tenants have a cancellation period of 3 months advance notice, the landlord’s cancellation period is extended the longer the tenant lives in the apartment. Any deviating wording is not valid. Unless the apartment has been rented for a distinct period in time (and that does not happen just by defining a limited rental period – certain facts must be established) the cancellation period can be individually agreed.
Some contracts include a waiver of the cancellation right for the tenant. Generally speaking, such waiver is only valid if less than 4 years. If you wish to cancel within that period, you can only do so in case (as well as under other very specific circumstances) you have to undertake a new assignment and your interest exceeds the landlord’s interest (ie. you will mostly not be entitled to cancel 1-3 months prior to the rental period end, but it is likely you will, should the remaining period be longer than 4 months).
A lease agreement is free of form. And unless a condition is not immoral in the sence of German law you can undertake to buy a fruit basket for the landlord on every second Tuesday. Or whatever kind of compensation landlord and tenant feel fit for the right to live in that apartment.
The lease agreement will usually cover the following issues:
- rental period
- Amount of rent payable, schedule of payments and of increases
- Details of what the rent includes and excludes
- Deposit required and details of any interest it will earn
- Requirements for renovation
- Insurance requirements
- Rights and obligations of the tenant and landlord (notice period, pets)
It is also common that the tenant should also take out third party liability and/or contents insurance for the property.
Often forgotten, the handover protocol is actually an integral part of the contract. Since the landlord is not obliged to sign a protocol it is wise to bring a template and a witness. The protocol states the condition of the apartment when the tenant moves in. It needs to be filled out in detail, listing any defects however minor, such as scratches, stains or other damage, to protect the tenant at the end of the lease. It is recommended to make photos of all damages or non-renovated parts of the apartment.