The Hessian state government plans to extend the rent control scheme beyond 25 November 2026 and, at the same time, to expand it significantly. Instead of the current 49, 71 local authorities are to be covered by the scheme in future. To this end, the state government has submitted draft versions of two new regulations for consultation.
What is the rent control scheme?
The rent cap limits the rent for newly concluded tenancy agreements. In areas with a tight housing market, the agreed rent may not exceed the local comparative rent by more than ten per cent. Exceptions to this rule are new-build properties first occupied after 1 October 2014, as well as flats that have undergone extensive renovation.
36 new local authorities, 14 are being removed
The new geographical scope is based on a recent report which identifies a tight housing market in 76 municipalities in Hesse. Five of these have refused to be included. New additions are set to include, amongst others, Gießen, Hanau, Marburg, Oberursel, Hofheim am Taunus and municipalities in the Darmstadt area such as Bensheim and Heppenheim. In future, Maintal, Mörfelden-Walldorf and Viernheim, for example, would no longer be included.
The cap and the notice period will also be adjusted
In addition to the rent cap, two further protective measures are to be extended and amended in the affected local authorities:
- Cap: In areas with a tight housing market, rents may be increased by no more than 15 per cent over a three-year period, rather than the usual 20 per cent.
- Notice period following conversion: If a let flat is converted into a freehold flat, the landlord is prohibited from giving notice to the existing tenants for a certain period. By law, this period is three years. In Hesse, it is set to be six years in future; at present, it is still eight years.
More scope for housing construction
The 71 local authorities are also to be designated as areas with a tight housing market under the Building Code. This will provide them with additional tools to mobilise building land. Specifically, the local authorities can exercise a special right of first refusal in respect of derelict or undeveloped plots of land, or issue building orders, thereby obliging owners to develop the land under certain conditions.
What does this mean for landlords and tenants?
For tenants in the newly included local authorities, the rent cap would apply for the first time, provided the regulation comes into force. This protects against excessive rents for new tenancies. Landlords in these regions will in future have to check whether their proposed rent complies with the permitted upper limit.
Landlords wishing to convert let flats into owner-occupied flats should bear in mind the extended period during which notices of termination are prohibited. Anyone who is unsure whether their property is affected by the new regulations or what the implications are for current tenancy agreements should seek legal advice. The draft regulations are still undergoing the consultation process; the final version of the regulations may still be subject to change.
Source: Haufe: Property
This post and the accompanying image were created with the help of AI and have been editorially reviewed.
