Attention: stumbling block – what you should know about rent reduction

"By what percentage can I reduce my rent??"Probably hardly a question is asked so frequently to the legal advisors of the citizen of Berlin tenant association. The right to a rent reduction is generally known and very popular. On the one hand, because it is not understandable that one should pay the full rent for a reduced housing value. On the other hand, because many people believe that there is no other means of exerting pressure to get the landlord to remedy the defect. However, in view of increasingly restrictive case law, tenant advisors advise a cautious approach to rent reductions. This understandably leads to frustration among tenants – after all, you can read everywhere that there is a right to a rent reduction in the case of mold, noise and other defects.

Attention: stumbling block - what you should know about rent reduction

Actually, the matter is clearly regulated by law: If the housing value is reduced due to a defect, a rent reduction is justified – until the target condition, as the lawyers call it, is restored. This means the condition in which the apartment should usually be according to the contract or the law.

Defects caused by the tenant are excluded

But there are also some restrictions. Thus, the rent reduction is excluded if the defect was already known at the time of moving in. One cannot rent thus without comment an dwelling with rotten windows and then immediately reduce the rent. In the case of damage caused by tenants themselves, the rent deduction is also ruled out. This sounds obvious, but is difficult in individual cases. If, for example, a mold infestation was actually caused by tenant behavior, the rent should be reduced? Or is it for structural reasons? In addition, in the case of a rent reduction, a significant defect must be present. You cannot reduce the rent because of trifles, such as a defective light bulb in the stairwell – but you can demand that the landlord repair it.

Attention: stumbling block - what you should know about rent reduction

On the other hand, it does not matter whether the landlord can do anything at all about the problem. The construction site in the street or the noise from the disco in the neighboring building also entitle the tenant to a rent reduction. This right must also not be "requested" from the landlord. Nevertheless it can be meaningful to let itself from the landlord a certain decrease ratio in writing "approve", for instance for the duration of a modernization. This avoids later legal disputes.

Payment with reservation must be announced

In any case, the correct procedure is important. You should report the defect in writing and set a deadline. "You have to give the landlord the chance to eliminate the defect, after all, he doesn't have X-ray vision," says attorney Christoph Muller. Only in the case of very obvious and unavoidable impairments, such as scaffolding, this is unnecessary. Contrary to what many tenants believe, it is not mandatory to give notice of a certain rent reduction rate. However, it is crucial to declare the payment of the rent under reservation already in the notice of defects. "Some tenants just write it on the transfer form, but that's risky," explains Stefan Schetschorke, head of the legal department of the Berlin Tenants' Association (BMV). Rather, you have to inform the landlord that the rent payment will only be made with reservation from now on because of impairments that have to be specifically named. There is legal controversy about how long the payment may be made under reserve. At some point, "butter must be added to the fish", as Schetschorke puts it. Meaning: At some point, a judicial clarification must be sought.

Sample letter:
How to report a housing defect to your landlord

  • Notification of defects to landlord or property manager
    With this sample letter, you inform your landlord/manager about the defects in your apartment and request him to remedy the defects.
  • Notice of defects with setting of a deadline – declaration of conditional payment
    Use this sample letter to inform your landlord/manager of the defects in your apartment and request him to remedy the defects within a specified period of time. In the event that the deadline should pass, you announce a substitute performance and declare the payment of your rent under reserve.
  • Notice of defects – final reminder
    With this sample letter you set your landlord/manager a final deadline for the removal of defects in your apartment.
  • More sample letters for communicating with your landlord

Attention: stumbling block - what you should know about rent reduction

At the Berlin Tenants' Association, we often see tenants calling the property management repeatedly for years to complain, and then losing patience and wanting to retroactively reduce the rent. But on the one hand one cannot prove telephone calls usually. On the other hand, a retroactive reduction is not possible if you have paid the full rent without any objections the whole time. "You can lose a lot of money by paying rent without reservation," explains BMV legal expert Frank Maciejewski. Its tip: Immediately after discovery of the lack the error in writing to indicate, the repair require and explain that one pays the full rent only under reservation. "If nothing happens for weeks afterwards, the rent can also be reduced retroactively."

Do not act on your own initiative

The big question is now, by what percentage may be reduced. There are no legal guidelines that you can follow. If it comes to a legal dispute, the judges decide at their discretion, whereby it depends on the circumstances in the concrete individual case. On tables from the Internet one should therefore never rely. Even in the case of a supposedly clear situation – such as a total failure of the heating system in winter – some courts consider 50 percent to be appropriate, while others consider 100 percent to be appropriate. The first rule is: Never reduce the rent on your own, but always seek legal advice first. Even experts in tenancy law are not immune to misjudgements. But you can advise a more realistic deduction based on case law and empirical values. "Most tenants overestimate the amount of the rent reduction," knows Stefan Schetschorke. Many judge this very subjectively and take their personal suffering pressure as a standard. Because they can no longer sleep undisturbed due to bar noise, for example, they consider a 40 percent reduction in rent to be justified. But in court, the only thing that matters is the objectively impaired residential value.

Attention: stumbling block - what you should know about rent reduction

"Since it has been clarified that in principle the warm rent is the basis for calculating the rent reduction, the courts also tend to lower quotas," explains Schetschorke. Many tenants also make the mistake of adding up the individual percentages for a large number of minor defects, says Schetschorke: "They look on the Internet, find 5 percent for a defective doorbell, 3 percent for a neglected staircase and so on – and you end up with a 70 percent rent reduction."But the courts always take an overall view.

Rent reduction is therefore a closed book even for experts. That would not be further bad, if there were not for some years a certain notice risk. Since a ruling by the Federal Court of Justice in 2006, the following applies: Excessive or completely absurd rent reduction is culpable conduct that entitles the landlord to terminate the lease (BGH of 25. October 2006 – VIII ZR 102/06). It does not matter whether you have consulted a lawyer or the tenants' association.

How the reduction becomes a reason for dismissal

Even more incisive is a ruling from 2012. Accordingly, already from one month's rent plus one cent arrears the termination threatens – previously it was two – and in addition to the termination without notice also the ordinary termination is possible (BGH of 11. July 2012 – VIII ZR 138/11). This is fatal because only the termination without notice can be eliminated by additional payments. In plain language: anyone who negligently or intentionally sets the rent reduction rate too high – the judges also decide on this at their discretion – can lose their apartment. For landlords who are just waiting to get rid of their tenants, this case law is a gift. The rent reduction becomes a trap. "The legal right to rent reduction is increasingly being undermined by the BGH," criticizes attorney Christoph Muller (on this also our interview at the bottom of the page).

Attention: stumbling block - what you should know about rent reduction

And the BMV lawyer Schetschorke warns: "One can already reduce the rent, but must absolutely make sure to remain below one month's rent arrears." Then a legal clarification must be brought about.

Do not reduce the rent over a long period

However, it has been the experience of the tenants' association that many tenants shy away from taking legal action. They prefer to reduce the rent for years. But this is strongly discouraged. With accordingly high reduction rates the notice already threatens after few months. For dispute-ready tenants BMV right expert recommends Frank Maciejewski the following procedure: One announces the rent reduction, communicates to the landlord however that one pays for the time being the reduction amount under reservation. After a few months, one asks the landlord whether he accepts the reduced amount and reimburses it retroactively. If the denies this or is silent, one sues for the amounts paid under reservation. In the process, the justification of the rent reduction is then also examined.

Attention: stumbling block - what you should know about rent reduction

Not only by the iurisdiction, also by the legislator the right on rent reduction is increasingly limited. For example, the Landlord and Tenant Law Amendment Act introduced in 2013 completely excluded rent reductions in the case of energy-related renovations for three months. This regulation is not comprehensible and not very practical, says the BMV.

Despite dust, construction noise and limited usability of the apartment, the full rent must be paid. That is absurd, because rent reduction is according to the sense and purpose a compensation for the reduced housing value. Whether a modernization measure makes sense or not is completely irrelevant.

Conclusion: Rent reduction has become risky. It is therefore all the more important to always discuss the specific procedure with the legal advisors of the tenants' association. In many cases, there are more effective and less risky means of exerting pressure than reducing the rent.

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