Thursday 24 May 2018

Introducing the ingenious rental system in Germany - and why landlords and tenants in Ireland should take note

Stock photo: Deposit
Stock photo: Deposit

Catherine O'Mahony

LET’S pretend – just for kicks – that we live in Germany and need a place to live.

We want to rent as we are not ready/ can’t afford to buy. We check online, and narrow our search to a particular area.

Here’s one that looks nice: 5-Zi WHG, EBK, 168.84m, 2,031.37 €ZZGL NK.

Perplexed? A German wouldn’t be.

Because in Germany, every property ad includes specific information. First, you get the number of rooms in the property (in the above example, five – and they don’t tell you what any one of them is for because apartments generally come unfurnished.)

Next they tell you about the kitchen arrangements (bear with me, the thing is that not all flats in Germany have them). Here there is an EBK – a built in kitchen – so you won’t have to worry about appliances.

Up next is the size of the living space, an area where Irish estate agents like to talk of “airy” or “spacious”. In Germany there’s a bald fact: precisely 168.84 square metres of living space.

If that sounds like a lot to you (it’s actually rather huge), great; if it’s not enough, you move on. Germans will often calculate the value on offer according to the price per square metre.

Either way, it’s all perfectly clear and you don’t have to set foot in the apartment to know if it’ll fit your drum kit/doll collection/four children/whatever else you bring to the party.

Finally comes the price – in this case it’s €2,031.37 a month, which is a lot but this is a fancy f lat in a large city. They specify it does not include bills (this is where NK comes in – for Nebenkosten, or ancillary charges). If you move in, you’ll be charged another €300 a month.

In many other cases, the rent will cover all bills, in which case this will also be made clear in the very top line of the property ad.

Any further financial details – such as the deposit which tends to be an eye-watering three times rent in Germany – will be detailed clearly in the ad.

It will also often be made clear you’ll be expected to clear out the apartment fully and paint the walls a clean white when you are leaving.

Ready for the next person. After all that palaver you can safely assume the turnover tends to be rather slow.

As a former tenant here and in Germany – and a former landlord to boot – I am misty-eyed about the sheer practicality of the German approach as I watch us tinker away at the operating rules in an effort to sort out our private rental sector.

Consider your plight in Ireland when seeking an abode in a similar price range. The number of bedrooms will be the main thing specified (as unfurnished flats are a rarity). The price will be clear. Other than that? Well you’ll be told how convenient the location is

You might be told if the windows have double glazing. A “stunning view” might be mentioned. The old “spacious” chestnut might make an appearance. There may be talk of “unique” and “custom-designed”.

But will you find out precisely how large it is? Unlikely? Will they tell you about additional fees you might have to shell out? No. Will you have any idea how it squares up price-wise to other properties? Probably not.

And sure, who cares anyway, you may reason. It’s only a rental. You can always move on in a year.

Perhaps the Government’s plan to beef up Residential Tenancies Board powers to stop landlords over-hiking rents will help settle matters for tenants and landlords.

But is it remotely enough? Right now it seems nobody is happy.

Tenants are seeing rents nationwide hitting levels that seem preposterous to those lucky enough not to have to pay them: the average in Dublin was €1,500 last year (and that covers everything from one-beds to family homes) while the national average exceeds €1,000.

And then the accommodation standards are often shoddy and occasionally horrific, when someone slaps a beige carpet into their garden shed and calls it a “studio apartment” or rents a “flat” with no window.

Landlords, equally, complain about unreliable and dirty tenants and say those who have just one investment property in particular are swamped by onerous legislation.

Meanwhile, over in Germany, more than 40 million tenants go about their business, on leases lasting an average of 11 years – a steadying practice that is a natural brake on rent increases.

Their upfront costs are high but the built-in transparency means they know what they are getting into.

Landlords get more limited returns, but appear to live with it.

Perhaps they appreciate the calm and certainty of the system.

Perhaps it’s nice that when the leases end they get a pristine and freshly painted property back.

Do any of us truly crave that kind of stability?

Maybe we all get the rental market we deserve.

Online Editors

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