Real Estate

Imagine A $28K Fee For Furniture. The Reality For Berlin Renters Is Ugly

In September, millions rooted on Berliners as they passed a referendum to rip 240,000 rental units from institutional landlords to control explosive housing costs. However, the referendum is now in limbo as Berliners continue to grapple with low inventory, skyrocketing rent, and tenants asking would-be renters for astronomical fees for the chance to secure a new abode.

The most egregious example? A $28,000 furniture and appliance purchase agreement.

“In Germany, it’s common for apartments to come with just the bare bones — oftentimes without appliances or even kitchen cabinets,” a Bloomberg article explained on Thursday. “So it’s not unusual for tenants to sell their belongings to the next occupant.”

“But whereas in the past, that might have meant expecting to pay about 1,000 to 3,000 euros for some of the hand-me-downs, renters and agents say that lately they’re seeing exorbitant markups,” it added. “One ad recently asked 25,000 euros ($28,300) upfront for kitchen equipment, a TV and furniture — including a couch, bed, garden furniture and other items.”

Berlin rental advocates told Bloomberg renters are so desperate for housing, they’re often willing to sign lease agreements with exorbitant — and illegal — terms. And landlords, they said, are allowing current tenants to name their terms and handpick the next tenant who’s willing to shell out thousands of euros for a furnished apartment.

“People are offering to pay thousands of euros for furniture that is worth much less, agreeing on things that are not reasonable — such as high prices when the landlord is not supposed to ask for that much — or counter-offering with higher rent,” Black Label Properties CEO Ioannis Tzakris said on Thursday. “It’s pretty wild.”

In addition to price gouging from current tenants, Tzakris and several other advocates said landlords are abusing loopholes in Berlin’s rent control laws that limit rent hikes to no more than 10 percent above the area average and no more than 15 percent over a three-year period. To circumvent these rules, landlords are making substandard upgrades to levy a two percent modernization surcharge and using fixed-term lease renewals to push up rent.

As the government battles over the referendum and other rental laws, Berlin-based consumer fraud expert Thomas Schulte said renters must learn rental laws, advocate for themselves and report landlords who are breaking the law.

“Foreigners don’t know about the regulations and safety checks,” Schulte said of the extra danger outsiders face. “Berlin’s real estate market is nuts right now, and it’s opened the door to various scams and forms of abuse.”

Email Marian McPherson

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