Comparable rent

Comparative Rent - The local comparative rent is the rent typically paid for comparable apartments (location, size, amenities, year of construction, energy efficiency) in a municipality. It forms the basis for rent increases (Section 558 of the German Civil Code), rent control (Section 556d of the German Civil Code), and the valuation of rental properties. The comparative rent is determined in the qualified rent index, in rent databases, or through expert appraisals.

Determining the comparative rent

The comparative rent can be established in four ways (Section 558a BGB): Qualified rent index - the most reliable tool, based on a scientific survey of rents actually paid. Simple rent index - an overview without scientific methodology. Rent database - a continuously updated collection of rent data. Expert appraisal - an appraiser determines the comparative rent based on comparable properties. In practice, the qualified rent index is the standard tool - it is updated every two years and carries significant evidentiary weight in court.

With the 2022 rent index reform, the creation of a qualified rent index became mandatory for municipalities with more than 50,000 residents. As a major city with well over 500,000 residents, Nuremberg is therefore required to create and update the qualified rent index. The current Nuremberg rent index is therefore considered a particularly reliable basis for rent increases and valuation purposes-it is based on a representative survey of actual rents paid in the city.

Significance for Rent Increases

Landlords may increase the rent up to the local comparative rent (Section 558 BGB) if the current rent is below that level, the last increase was at least 15 months ago, and the rent has not risen by more than 20% within 3 years (cap - reduced to 15% in areas with a tight housing market, which includes Nuremberg). The rent increase must be justified in writing, ideally with reference to the rent index. The tenant has a consideration period until the end of the month following the next.

The rent increase must be formally justified: A mere statement that “the rent is below the comparative rent” is not sufficient-the landlord must either cite the rent index with the specific value, refer to an expert, or name three comparable apartments as comparison properties. A formally flawed rent increase notice is invalid, even if the substantive justification is correct. We recommend that landlords have the rent increase drafted by a professional.

Practical Tip for Landlords in Nuremberg

We recommend that landlords in the Nuremberg metropolitan area use the Nuremberg Rent Index as a basis for rent increases. The current rent index is published by the City of Nuremberg and takes into account location, year of construction, amenities, and apartment size. Check regularly to see if your current rent is below the comparative rent-in Nuremberg, there is significant potential for increases, particularly in neighborhoods such as Gostenhof, Johannis, and the Südstadt.

Be aware of the 15% cap (Nuremberg is classified as a tight housing market) and the 15-month waiting period since the last increase. We help landlords determine the scope for rent increases and draft the increase notices in a legally compliant manner. As real estate agents with many years of experience in the metropolitan region, we know the market and can assess whether and how quickly a rent increase can be implemented.

Frequently Asked Questions

Where can I find the Nuremberg rent index?

The official rent index for the City of Nuremberg is available online on the City of Nuremberg website and as a printed brochure from the Office for Housing and Urban Development. It is updated every two years and contains tables that differentiate by year of construction, apartment size, amenities, and location. Alternatively, the city offers an online rent index calculator that you can use to determine the comparative rent for your specific apartment.

Can I charge more than the comparative rent?

For new leases in areas subject to rent control (which includes Nuremberg), the rent may not exceed the comparative rent by more than 10% (Section 556d of the German Civil Code). Exceptions: The previous rent was already higher, or the apartment has undergone extensive modernization. For existing leases, the rent may be increased up to the comparative rent-beyond that, only through modernization surcharges (§ 559 BGB). A rent that is 20% above the comparative rent may constitute an excessive rent (§ 5 WiStG) and be considered an administrative offense.

What is the difference between the comparative rent and the market rent?

The comparable rent is based on rents actually paid over the last 6 years and is recorded in the rent index. The market rent is the price that can be achieved when a new lease is signed on the open market-in sought-after locations, it is often 10-25% higher than the comparable rent. The comparative rent is the legal benchmark for rent increases and rent control; the market rent is the economic indicator of a property’s earning potential when re-let.

What are the consequences if the rent is significantly below the comparative rent?

If the current base rent is significantly below the local comparative rent, the landlord has legal potential for increases that they can exploit gradually. For prospective buyers of a rented property, this difference between the actual rent and the comparative rent is an important valuation factor: it indicates how much potential for rent increases the property holds. If the actual rent is 20% below the market rent, a new owner can gradually close this gap within a few years-provided the cap limit (15% over three years in Nuremberg) is observed. Conversely, an actual rent significantly above the market rent warns of the risk that the achieved rent cannot be maintained when the next tenant moves in. We recommend that buyers always compare both values-the current actual rent and the local market rent-before purchasing in order to realistically assess the property’s sustainable income value.

Comparative Rent as a Valuation Basis for Investors

For investors, the comparative rent is not only a concept under tenancy law but also one relevant to valuation. In the income approach-the standard valuation method for rented properties-appraisers base their assessment on the sustainable rent, which is guided by the local comparative rent. A property that is temporarily rented at a rate significantly above the comparative rent is not valued in the income approach based on this inflated actual rent, but rather on the sustainable comparative rent that can be achieved. This can result in the income value of such a property falling below the asking price. Anyone who buys based on inflated actual rents accepts a valuation risk-especially if the lease is based on fixed-term contracts or informal supplements.

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