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Legal changes to impact German real estate in 2016

4371882781_b907edf307_oLegal changes are on their way, both due to new laws being enacted and reforms to existing laws. It is important that anyone affected has sufficient time to come to terms with the new legal landscape and can make any necessary changes to their business practices. Read on to find out about some of the key legal changes that are set to have an impact on the German real estate industry this year including changes for:

  • estate and letting agents
  • property and facility managers
  • tenants
  • property owners

Germany prides itself on its reputation as a stable and predictable country. For investors and businesses, it is important to know that a country’s government will not be springing any unpleasant surprises on them with little or no warning. Which is why Germany’s legislators announce any upcoming changes well in advance and avoid unnecessary (or overly frequent) tinkering with existing law. Legislators typically include grandfather clauses or some form of transitional provision when enacting a new law, to ensure that old rules continue to apply for a set period of time, or that new rules only apply to situations after a specific date. These processes mean that we are already aware of certain changes to laws surrounding the real estate sector as 2016 kicks off, although there are sure to be further changes over the next twelve months that we don’t yet know about.

Legal changes for estate agents and letting agents

For many market participants, 2015 brought more than enough changes with it (such as the Bestellerprinzip, to name just one), but more are on the way:

  • For all of the estate and letting agents out there with less than six years‘ experience in the real estate industry, the first half of 2016 is when they will have to prove their skills and competences and acquire an official certificate of competence (Sachkundenachweis). Up until now, no specific qualifications were required to act as an estate or letting agent, or a property or facility manager. Association bodies, such as the IVD federation, have been calling for a more professionally-run real estate industry for some time now, so these changes have been warmly welcomed by those with an interest in a professional, transparent and competent industry.
  • From October 2016, anyone wishing to register their estate agency with local officials will have to produce their certificate of competence as part of the registration process.

Legal changes for apartment owners

The two major changes relate to energy consumption specifications and zoning:

  • From 01.01.2016, the tougher EnEV 2014 standards apply as binding, rather than merely as recommendations. This means that buildings have to be 25% more energy efficient than under 2009’s standards. Fines of up to €50,000 have also been introduced to ensure compliance. The only other major requirement of the new law is that oil- or gas-fired boilers that have been in operation for more than thirty years will have to be replaced.
  • A second legislative change sees a tightening of Berlin’s “Zweckentfremdungsverbot,” the law that governs inappropriate use of residential property. Berlin has had a sizeable problem in recent years with unapproved holiday apartments, robbing the city of much-needed regular housing. A grace period for illegal holiday apartments to be converted back into regular apartments ends on 03.05.2016. Anyone who continues to let an apartment to tourists on a short-term basis without the correct licenses could be liable for a fine of up to €50,000 once the amnesty ends.

Legal changes for tenants

Tenants who sub-let their apartments on a short-term basis, such as when they are away on holiday, will also have to be careful.

  • From 03.05.2016 they are required to let their local Bezirksamt (District Authority) know all about the sub-letting. Failure to do so could also make tenants and property owners liable for fines of up to €50,000.

We’ll make sure to keep you updated on these and other changes scheduled to take effect during 2016, for example a new law that is highly likely to have an impact on how Germany’s rent indexes are compiled and the data they will have to include.
Let us know what you think about these developments in the comments section below.
 

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