New year, new luck – and some stricter rules

Property owners and landlords are facing a few changes

What will 2016 bring?

„EnEV 2016"

From January 1st, the next stage of the Energy Saving Ordinance (EnEV 2014), also known as "EnEV 2016", comes into effect. Homebuilders submitting their building applications from now on must improve the insulation of the building envelope and ensure efficient building technology. The new building may only require a maximum of 75 percent of the primary energy of a comparable house built to current standards. The building's thermal insulation must also be 20 percent better.

Owners of existing buildings will not have to dig deeper into their pockets for major renovations: the current requirements of the 2014 Energy Saving Ordinance (EnEV) remain in place for them. However, it could become more expensive for them, as the coalition plans to reduce the amount that modernization costs can be passed on to tenants.

Old heating systems

The regulations regarding the replacement of old oil and gas heating systems have also been tightened. Previously, only heating systems installed before 1978 had to be replaced. Now, boilers installed before January 1, 1985, may no longer be operated.

Rent control

To curb rising rents, the rent control law came into effect on June 1, 2015. According to this law, rents may only exceed the local comparative rent by up to ten percent. Among the nine German states that have implemented the law so far are Baden-Württemberg (in 68 cities and municipalities) and Rhineland-Palatinate. In Rhineland-Palatinate, the rent control is being applied in the university cities of Mainz, Trier, and Landau. Saarland currently has no plans to implement the law.

Real estate loans

The so-called "right of withdrawal" for borrowers is expected to lose its power as of March 21, 2016. By then, the German government must implement an EU directive on residential mortgage loans. The initial draft legislation in October 2015 was highly controversial, particularly regarding the proposed new regulations on the right of withdrawal: These regulations aim to limit the right to withdraw from a loan agreement to twelve months and 14 days if the withdrawal information in the loan agreement is flawed. Consumer advocates view this as a restriction of the rights of home builders and homeowners. Previously, borrowers enjoyed an unlimited right of withdrawal if loan agreements were flawed due to inadequate advice. It remains unclear whether the new regulation will also apply retroactively to existing contracts. With correct withdrawal information, withdrawal from the contract is still only possible up to 14 days after signing.