Bundestag Considers Draft Law to Amend Regulations on Residential Tenancy Law
On January 27, 2025, the German Bundestag introduced a new draft law (20/14673) entitled “Entwurf eines Gesetzes zur Änderung von Regelungen des Rechts der Wohnraummiete (PDF)”. This draft law proposes significant amendments to the current regulations governing residential tenancies in Germany.
Key Provisions of the Draft Law
The draft law includes several key provisions aimed at addressing various issues related to residential tenancies, including:
- Rent Cap Extension: The draft law proposes extending the existing rent cap, which is set to expire in 2025, until 2029. The rent cap limits rent increases in designated areas with particularly tight housing markets.
- Rent Increase Restrictions: The draft law introduces stricter restrictions on rent increases for existing tenancies. Landlords would be required to justify rent increases and could only increase rents by a maximum of 4% per year, plus an additional 2% for renovations or modernization measures.
- Protection against Evictions: The draft law strengthens protections against evictions for certain groups of tenants, such as families with children, people with disabilities, and low-income households. Landlords would face additional hurdles before being able to evict tenants on grounds of personal use or conversion of the property into condominiums.
- Tenants’ Association Funding: The draft law proposes increasing funding for tenants’ associations to support their efforts in representing the interests of tenants and providing legal assistance.
- Digitalization of Tenancy Agreements: The draft law encourages the digitization of tenancy agreements and related documents to improve transparency and accessibility.
Rationale for the Draft Law
The Federal Government has cited the rising cost of housing and the increasing number of evictions as the primary reasons for introducing this draft law. The government argues that the current regulations are insufficient to protect tenants from unfair rent increases and evictions.
Impact on the Rental Market
The proposed amendments to the residential tenancy law are likely to have a significant impact on the rental market in Germany. The rent cap extension and restrictions on rent increases could potentially lead to lower rents in affected areas. However, it remains to be seen how landlords will respond to these changes and whether they may invest less in rental properties as a result.
Further Deliberations and Next Steps
The draft law will now be subject to further deliberations in the Bundestag. It is expected to undergo various revisions and amendments before being put to a final vote. If passed, the law would come into effect in 2026.
Conclusion
The draft law on amendments to residential tenancy regulations in Germany represents a significant effort to address the challenges facing tenants in the current housing market. The proposed changes aim to provide greater protection against unfair rent increases and evictions, while also encouraging the digitization of tenancy-related processes. The impact of these amendments remains to be seen, but they are likely to have a substantial influence on the rental market in Germany.
20/14673: Gesetzentwurf Entwurf eines Gesetzes zur Änderung von Regelungen des Rechts der Wohnraummiete (PDF)
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