How to calculate a rent reduction correctly - Here's how
Once it is clear that the rent may be reduced because of defects, only one question remains: by exactly how much may it be reduced? This question is not so easy to answer, however. Especially not when there are several defects or several rooms are affected by a defect.
In brief
- If there are one or more defects in your flat, you are entitled to reduce the rent.
- Knowing the reduction rate alone is not enough to work out the amount of the reduction.
- In addition to the reduction rate, you also need to take into account the proportional room value, the time factor and the service charges.
Which defects give you the right to a rent reduction?
If the quality of your home is impaired by one or more defects, you have the right under §536 BGB (German Civil Code) to reduce the rent proportionally. Such defects can affect the quality of living in many different ways.
For example:
- a heating failure (preferably in winter)
- construction noise in the neighbourhood
- mould on the walls of the flat
- water damage or
- a hot water failure
All the cases on this non-exhaustive list give you the right to reduce the rent.
However, the reduction should be neither too high nor too low. If it is too low, you are giving money away. If it is set too high, you risk legal trouble later on.
That leaves two options: either you read up intensively on all the finer points of the subject yourself, or you entrust your case to legal experts instead.
Information you need for the calculation
To work out the correct reduction amount, you need – in addition to the reduction rate – your gross warm rent (Bruttowarmmiete, i.e. rent including heating and service charges), the amount of the service charges and the proportional room value of the rooms affected by the defect.
The latter value is necessary because
- not every room has the same living value (compare a living room with a cellar, for example) and
- not every room is affected by the defect in the same way (mould in the cellar and bathroom, but not in the living room)
This proportional room value has already been established by the courts (Regional Court of Hamburg, 24 May 1983 - 16 S 332/82) and can be found, broken down by room, in the so-called Hamburg Table (Hamburger Tabelle).
- Living room: 28 percent.
- Study: 20 percent.
- Bedroom: 12 percent.
- Kitchen: 10 percent.
- Bathroom: 10 percent.
- Storage room: 7 percent.
- Guest WC: 3 percent.
- Balcony: 10 percent.
Last but not least, you should record exactly how long the defect existed, as the time factor also plays an important role in calculating the reduction amount.
The reduction rate
The reduction rate is nothing more than an expression of how much the use of your flat is impaired, expressed as a %. It depends on the severity of the defect and its duration.
Many factors go into determining the reduction rate, e.g.
- the size and location of the flat
- the level of technical standard
But you don't need to rack your brains over the reduction rate. You will find values that match your case in the rent reduction tables, which are published anew every year.
How the reduction amount is calculated
First of all, a correct basis of assessment is needed. It should be obvious that the rent cannot be reduced for the whole month if the defect only existed for 10 days.
Example calculation:
Your gross warm rent is €580 and the defect existed from 25 February to 5 March, i.e. for 9 consecutive days.
So we are looking for the correct time-based basis of assessment. Since the period spans two months and the defect did not exist for a full month, we proceed as follows:
€580 x 4 days (defect in February) ÷ 26 days = €82.86 ; for March, by analogy:
€580 x 5 days (defect in March) ÷ 31 days = €93.55
Adding these together gives us the basis of assessment we are looking for: €176.41.
So far, so good: but what we want to know is the specific amount by which the rent may be reduced. This question is answered by looking at the rent reduction table mentioned above.
Assuming that, according to the table, the defect in our example justifies a reduction rate of 25%, we find the reduction amount as follows:
€176.41 x 25% = €44.10
This amount is now deducted from the gross warm rent: €580 - €44.10 = €535.90
Important: factor in advance payments on service charges!
If the landlord demands additional payments for service charges (because the actual service charges exceed the advance payments), this amount must also be reduced proportionally. An example:
Gross warm rent €580
Landlord's additional demand for service charges €400
Reduction rate 25%
For the sake of simplicity, we assume that the defect existed for 2 full months. Without a rent reduction, the annual rent would be:
12 months x €580 (gross warm) + €400 (additional service charge demand) = €7,360
Taking the rent reduction into account, the gross warm rent must first be reduced for 2 months, and the same must then be done with the additional payment demanded.
- Step 1: €580 - 25% (reduction rate) = €435 (reduced warm rent per month)
- Step 2: 10 months x €400 -/- 12 + 2 months x €25 (reduced additional service charge demand per month) = €383.34 (reduced additional service charge demand per year)
The €25 corresponds to the monthly additional service charge demand, reduced by the 25% reduction rate (€400 / 12 - 25%)
If all components are now included in the formula, the reduced annual rent comes to:
10 months x €580 + 2 months x €435 + €383.40 = €7,053.40
The annual reduction amount, taking service charges into account, is: €306.60
If these are not taken into account, it is only: €290
2 months x €580 (gross warm) - 25% (reduction rate). So you are giving money away. Depending on the reduction rate, the amount given away can be much higher.
As is clear, the service charge statement is an essential element of the assessment. Without knowing the service charges actually incurred, an appropriate reduction amount cannot be calculated correctly, or it may turn out too low.
Experts help you calculate your rent reduction
As you can see, calculating the correct rent reduction is a fairly complex matter. That would not be a problem if it were not for the possible legal consequences. If the reduction amount is too low, that is annoying at best. If, on the other hand, it is too high, the landlord can in theory claim damages and even terminate the tenancy.
So let us repeat the question from the beginning of this article: is it wiser to read up on the subject yourself, with all its finer points and twists, or is it smarter to entrust the calculation to professionals? You decide!
CONNY gets you your rights!
- Fill in the online questionnaire and get your result straight away.
- We review your case and, once instructed, enforce your claim to a rent reduction.
- Your claim is paid out to you. CONNY covers all lawyer and court costs.
Thousands of tenants have already had their rent reduced with CONNY.
With CONNY, you have a trusted partner at your side who calculates and enforces your rent reduction correctly. You only pay if we succeed.