German Holiday Home Insurance
Ordinary household insurance (Hausratversicherung), which normally covers loss of property contents from fire, burglary and water damage etc) is not compulsory in Germany. However, to protect your holiday home investment you will need to obtain a comprehensive overseas property insurance policy which not only covers the obvious buildings and contents elements but also includes periods when your home is not let and sits unoccupied. Assetsure are able to offer such a comprehensive insurance for your Germany holiday home.
The Holiday Home Market in Germany – the German rental market is now a stable and profitable one. The economy has a mature economic base dating back beyond unification of the capital, Berlin, back to WW2. The economic problems of unemployment resulting from unification impacted investors confidence – during the early 1990’s unemployment was at 15%. As a result, growth in property prices has failed to keep pace with the rest of Europe’s main holiday hot-spots. However, as holiday home investors look beyond the Costa Blanca and German nationals attitude toward home ownership is also changing… the traditional culture of renting (approximately 40% compared with 70% in the UK) is slowly being replaced by more German nationals and holiday buy to let investors flooding the market. The old property stock from the poorer East has created a mini housing bubble and the cost per square meter is on average five times lower than London at between 500 to 2,000 Euros a square metre. In addition, the integration of European Unification laws and an established and proven notary legal system (the Bürgerliches Gesetzbuch or BGB is the civil code of Germany) means holiday investors can have a higher degree of confidence that buying a German property will be relatively smooth and fraud and sharp practice reduced. Overseas property investors seeking holiday homes should start with the German version of the UK estate agent, the immobielien; holiday let landlords beware the immobielien management fee can be similar or greater than UK letting agent.
German Letting Agreements – it is important you research the laws surrounding how rent is charged and tenants legal rights and responsibilities… if you are planning to let your holiday home purchase to German nationals, their expectations may differ form those of UK tenants. In particular, people tend to rent for much longer periods (sometimes up to 10 years) and therefore treat the property is if it were their own home. Most tenants will let unfurnished and bring their personal possessions with them. Short term lets such as as holiday home lets or executive lets would expect a property to be let furnished. Consequently, some tenancy laws have been created to protect tenants rights and mirror their expectations. In particular, most long term rental tenancy agreement contracts in Germany extend for an undefined period (whereas in the UK most would be a 6 month assured short hold tenancy agreement). For short term holiday home rentals this may be less of an issue – for long term investor landlords eviction process are more cumbersome). Unlike the UK, it is normal practice for the letting agency fee be paid by the tenant, (not the landlord) when a letting agreement is signed that exceeds one year (the maximum charge is two months rent plus local tax). It is imperative you obtain German holiday home insurance before any contract is signed. The normal practice in Germany is for tenants to sign up for an unlimited period in the tenancy agreement but with a three months termination notice period to the end of the third month. For longer term, lets you may ask your tenant to sign a long term agreement which they are legally bound to pay (even if they leave before the period has completed).
Rental Issues – any, increases in the rent are also tightly controlled with a legal process called a Mietspiegel (‘rental mirror’); each local municipality is allowed to publish a maximum level of rent above which landlords must not exceed rental charges. Short term holiday rentals are not restricted by Mietspiegel which is mainly aimed to protect longer term tenants. The assessment rate is based on quality of the area and the property. Landlords who break the level, risk financial penalties and return of any excess rent charged back to the tenant. As a holiday home landlord you will also have to clearly identify how rent is structured; the rental rate itself cannot be changed throughout the life of the tenancy agreement whereas the ‘umlagen’ can (this is the cost to the tenant represented as a share of variable landlord costs such as rubbish collection, water rates, property tax, heat and communal block charges). Lastly, German housing law states that any decorations and even renovations must be undertaken by long term tenant during pre-agreed intervals and/ or at the end of the contact term. So it is highly advisable to employ a German lawyer to draft a fair and reasonable rental contract that protects your rights while meeting the needs of the population (particularly if they are German nationals who are familiar with current rental practices and German letting agreements.).
So if you are seeking holiday home insurance Germany quote for a property in popular cities like Berlin, Frankfurt, Hamburg or Munich why not see if we can help? The main holiday home areas are: Baden Wuerttemberg, Baden Wurttemberg, Bavaria Bayern, Bayern, Berlin, Brandenburg, Bremen, Hamburg, Hessen, Lower Saxony, Mecklenburg Vorpommern, Mecklenburg West Pomerania, Niedersachsen, Nordrhein Westfalen, Rheinland Pfalz, Rhineland Palatinate, Saarland, Sachsen, Sachsen Anhalt, Saxony, Saxony Anhalt, Schleswig Holstein, Thueringen and Thuringia