When and to what extent rent increases are permitted
Modernization measures can significantly increase the residential value of a property. However, landlords are not allowed to pass on the costs to tenants without restriction. The legal regulations on rent increases following modernization are clearly defined and should be strictly observed.
Which modernizations are apportionable?
Not every renovation or repair entitles you to a rent increase. Costs can only be passed on to the rent if the measures:
reduce energy consumption (e.g. new windows or thermal insulation),
significantly increase living comfort (e.g. new balcony, better soundproof windows),
fulfill legal requirements (e.g. smoke detector obligation, accessibility).
How much can the rent increase?
The modernization levy amounts to a maximum of eight percent of the costs incurred per year. However, there is a cap: The rent may not increase by more than three euros per square meter within six years.
Obligations of the landlord
Landlords must announce modernizations in writing at least three months before they begin. Tenants then have the opportunity to raise objections or, in cases of hardship, apply for a reduction in the rent increase.
Conclusion
Modernization can be a sensible investment for landlords, but must be clearly calculated. Those who comply with the legal regulations and communicate the measures transparently can implement a long-term sustainable rent increase without risking legal conflicts.
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