Tenants no longer pay broker commission from 2023
Until today, the broker's commission was paid by the tenant in most cases. This should change in favor of the rent with the Bestellerprinzip. The law is to be implemented from 2023. It is still unclear whether the law will come into force as early as 01.01.2023 or only in spring/summer 2023. Currently, a 6-month transition period is planned.
This Bestellerprinzip stipulates that in the future, the person who has commissioned the real estate agent(s) is to pay the brokerage fee.
This regulation is considered to be protective and is intended to relieve the financial burden on tenants in particular.
Until now, real estate agents could act as "double brokers" and demand a commission from both the landlord and the tenant. In practice, it was often the case that the tenantpaid a commission even though the broker was not commissioned by the tenant but originally by the landlord.
In the new§ 17a para 1 of the Brokerage Act states in the future:
"If a landlord as the first client has commissioned a real estate agent with the mediation of a residential tenancy agreement, the agent can only agree on a commission with him."
This means that a real estate agent/broker can only demand a commission from tenants if they have expressly commissioned the brokerage and a brokerage commission has been agreed upon prior to becoming active. The burden of proof that the tenant has commissioned the brokerage should lie with the broker.
If a broker is involved in the landlord's business, he may not demand a commission from the tenant under the new draft law. This also applies if the landlord has a stake in the brokerage company. It is thereby ensured that large apartment owners who operate their own brokerage firms cannot circumvent the Bestellerprinzip.
Anyone who violates the law and still demands a brokerage commission from the tenant will be threatened with an administrative fine for brokers of up to EUR 3,600. In the case of multiple violations, there is also the threat of losing the license.
This Bestellerprinzip was introduced in Germany back in 2015 and has been running successfully for all parties involved ever since.
Brief overview: How does the Bestellerprinzip affect those involved?
The Bestellerprinzip affects all parties involved, both tenants and landlords, as well as real estate agents and, last but not least, property managers.
Impact on tenants
In the future,tenants will no longer automatically have to pay the broker's commission and will thus be relieved financially. Nevertheless, they should read the rental contract carefully in order to recognize possible attempts to circumvent the law. The brokerage principle could also lead to higher rents and a smaller selection of advertised apartments.
Effects on landlords
In the future,landlords will have to bear the costs of estate agent services themselves. This includes, for example, the professional marketing of rental properties or the pre-selection of reliable tenants. The disadvantage for tenants is that the rent can be raised, as landlords want to recoup the additional costs. However, with today's high rents, this might make it difficult to find enough prospective tenants.
Effects on real estate agents
For real estate agents, little will change. Their work remains basically the same, but they are now actually paid by their clients. For real estate agents, it is important in the course of the Bestellerprinzip to position themselves well and to clearly emphasize the value of their services. They must also work in a very transparent manner and will in future be obliged to document why tenants are liable for commission. If they work together with the property management or if it is a matter of public real estate advertisements, no commission may be charged in the future.
Effects on property managers
With the introduction of the Bestellerprinzip, the combination of real estate agent and property management is strictly prohibited in the future. What the new law on brokerage commission also prohibits: Commission payments by tenants to the property management company or brokers commissioned by it, if there was no clear order to do so from the tenant side.