Michael Eriksson's Blog

A Swede in Germany

Posts Tagged ‘security deposits

Absurdities around apartments in Germany

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I have recently been looking for a new apartment. Doing so, signing the new lease, and making first preparations for the move, a number of annoyances with apartments in Germany have been brought to my mind again. The likely two worst are discussed below:

Realtors:

These provide a service exclusively to the landlord—but for which the tenant must pay… In effect, the landlord gives a listing to the realtor, the realtor does everything the landlord would otherwise have done himself (e.g. advertisements and showings), provides the prospective tenants with no value added, and then requires a fee equaling two months rent + VAT from … the new tenant.

In fact, from a tenants perspective, the service provided is actually on a “value subtracted” basis: The realtor is usually unable to answer even basic questions (but refers to the landlord), does not know the house or the neighborhood (let alone the neighbors), and generally seems keen on giving the most pleasing answer. Indeed, having found that I was always given positive answers when enquiring about how quiet the house or the neighbours were, I once reversed my questions (something on the lines of having regular parties or playing music late in the evening)—and was once again given a positive answer! The information given by these expensive “value subtracted” providers cannot even be trusted.

Similarly, a landlord (at least a private one) will be available for phone calls and inspections of the apartment outside of normal working hours, while German realtors keep hours that are highly unfriendly to the prospective tenants—with no possibility to call during the weekend and often forcing a call from work during the week.

A particular quirk is that the realtors are only allowed to charge their fees to tenants who were not previously aware of the apartment in question. This has the side-effect that ads by realtors will not contain the street address, but only a general area—which means that it is not possible to e.g. look up the house and the closest surroundings through Google Maps without first contacting the realtor. This, however, is something that a net-savvy user would want to do as a first step before bothering to call. (Of course, this rule is of dubious value, because if a prospective tenant with previous knowledge does show interest, the realtors will discriminate against him.)

And, no, it is apparently not possibly for a prospective tenant to hire a realtor (at least not in the rental market) to actually do some leg-work for the tenant instead of the landlord: I have over the years tried this on two occasions, simultaneously enquiring at several realtors, with the results being either no response at all (!) or a one-time listing of the apartments they at that moment had on offer (which was then the very last I ever heard).

The regulations should by changed so that it is always the party hiring and benefiting from the service (currently only the landlord) who pays any fees involved. This would not only be a fairer system, but would also lead to more customer-oriented realtors where even a tenant has the possibility to receive value-added services from a realtor—including decent telephone hours and the odd realtor who is actually willing to do some amount of work for prospective tenants.

Security deposits:

German apartments usually require a security deposit equivalent of three month’s (!) rent. While the wish for a security deposit is understandable, I cannot consider the size justifiable. Further, the way the system is implemented, the security deposit can very easily be abused by the landlord, e.g. to recompensate himself for rent held back for legitimate reasons or otherwise disputed, without having to take the initiative to go to court. (Something I fear will happen with my old apartment: The 2009 water bill for the 10-apartment house was inexplicably divided with my share amounting to half (!)—and despite this being absolutely preposterous and obviously incorrect, the landlord has refused to correct the bill and insists on payment of more than 800 Euro + an additional 70 Euro per month since. Considering his highly unethical behaviour throughout my years in the old apartment, I strongly suspect that he will simply help himself to the security deposit and force me to go to court over the money.) In contrast, the intended uses for the deposit appear to have become secondary (to cover unrepaired damages caused by the tenant and later differences in utility bills, as well as preventing a dishonest tenant from just skipping the last few months payment).

Other complications around the security deposit include landlords taking unduly long to repay it after the tenant moves out—often more than a year, rarely less than a half. (A time during which the tenant has six months’ (!) rent unavailable between the new and the old security deposits.) A better solution would include a smaller amount, some stringent form of escrow (no party is allowed to access the money without consent of the other or a court order), and a need for prompt re-payment: The landlord has e.g. two weeks to raise any objections and must then re-pay the major part of the sum, keeping at most a fraction to cover any differences in later utility charges.

And, no, this security deposit does not include the first or last months rent—these have to be provided separately at the beginning of the first, respectively last, month of the lease period. As can be noted, the sums involved are quite large: There is potentially a one-time payment of seven months’ rent (first, security deposit, realtor fees, and a last at the old apartment, seeing that an overlap in leases is hard to avoid)—and this not even counting the costs of the actual move and any needed repairs.

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Written by michaeleriksson

August 7, 2011 at 1:25 pm