Size of the rental
Is my rent too high
Whether you're paying the right rent can be difficult to answer, as rents in private rentals are set according to very different rules depending on the type of tenancy you have.
You can therefore try the "check if your rent is too high" calculator.
The following applies to the different rental determinations:
The value of the rented property:
The 'rental value' rent determination is used in a number of types of leases.
The value of the leased property is determined by comparison with the rent for similar leases in terms of location, type, size, quality, equipment and state of repair.
In the case of small houses in regulated municipalities, it is also a requirement that the comparison is made with leases that are located in large properties (OMK rent) where notice has been given according to LL § 23.
For a rent to be adjusted according to the value of the leased property, the difference between the current rent and the value of the leased property must be significant. A difference of at least 10 % is usually considered significant.
If the rent exceeds the value of the rented property, the tenant can demand a rent reduction, and if the rent is significantly lower than the value of the rented property, the landlord can demand a rent increase.
Cost-based rentals:
In properties with more than 6 tenancies and located in regulated municipalities, the rent is set as cost-based rent. This means that the rent must cover the property's necessary operating expenses and provide a reasonable return on the property's value.
Improvement supplements can be added to the rent if improvements have been made that have significantly increased the value of the rented property.
The landlord must be able to document the property's operating expenses and improvement costs in order to determine the cost-based rent. A rent increase usually happens when the landlord announces an OMC rent increase because the operating budget prepared for the property shows a deficit.
As a tenant/tenant representation, you always have the opportunity to object to an OMK notification. Contact us if you need help reviewing the OMK budget.
Extensively modernised tenancy
Tenancies that are located in an OMK property and have been extensively improved, the landlord can have a higher rent set. The improvements must have significantly increased the value of the tenancy and the cost of the improvements must exceed a certain amount per square metre or in total.
If your lease has been extensively modernised, this will usually be stated in section 11 of your lease.
Documentation
The landlord must document that the improvements have been made and that they fulfil the financial requirements. The rent tribunal must inspect the tenancy to determine whether it can be considered to have been thoroughly improved.
Contact us if you want help assessing whether your lease has been extensively modernised.
80/20 property:
If your tenancy is located in a property located in regulated municipalities where more than 80 % of the property's gross floor area was used for non-residential purposes on 1 January 1980, then the tenancy is not covered by the cost-based rent rules.
For these properties, however, the rules on the value of the rented property apply.
Free rent setting in newly built leases after 31 December 1991:
The rent can be set freely (i.e. no adjustment) by agreement of the parties in certain cases:
- Leases in properties occupied after 31 December 1991.
- Leased premises that on 31 December 1991 were lawfully used exclusively for business purposes.
- Newly refurbished living spaces in attics or newly added floors.
Requirements for the agreement
For leases that are covered by the rules on free rent setting, the lease agreement must state that the lease is covered by these rules. This is a condition of validity.
If the rental agreement does not fulfil this requirement, the rent cannot be freely determined.
Contact us if you want an assessment of whether the rent in your tenancy can be freely agreed.
Adjustment of free rent
The rent for leases with free rent setting can be adjusted according to the net price index if this has been agreed between the parties. The adjustment can only be implemented by the landlord's written notification to the tenant