Easy methods to implement rent control in SAP®
The law regarding rent control when re-letting flats came into force on 1 June 2015. This law stipulates that the basic rent can be a maximum of ten percent higher than the local average for comparable properties. This applies to all areas that the German state governments have identified as having “strained housing markets” up to 31 December 2020. Flats that were let for the first time after 1 October 2014 are not affected by this restriction. The same applies the first time a flat is let following extensive modernisation. Also exempt from the rental price restriction are flats that already exceeded the local average rent for comparable properties plus ten percent in the previous lease-out.
PROMOS provides five specific solution proposals in the rental
calculation area to allow you to conscientiously map the legal requirements in
your SAP® system. With our solution modules, we support you in concluding
legally compliant lease-outs – including saving the local average rent for
comparable properties, validation with new and previous contracts and taking
into account graduated rental agreements.
In order to map the rent control in SAP®, the typical comparable rent for the local area must be saved in the system. This allows the upper rent limit to be calculated automatically. PROMOS recommends that you maintain the typical comparable rent by integrating it into the rental object in SAP® as a statistical condition.
To ensure that the rent is not more than ten percent higher than the typical comparable rent when a new lease-out is concluded, the corresponding percentage must, of course, also be saved in the system. For this purpose, PROMOS recommends an additional “rent control” measurement type in the rental object with details regarding the possible increase amount, e.g. ten percent. To keep the maintenance effort low, you can initially perform this measurement type for a number of rental objects using the PROMOS mass maintenance for rental objects. At the same time, you can also define the validity of the measurement type. Of course, it is also possible to maintain the variance amount separately for each rental object.
Two different validation mechanisms check that the rent increase complies with the legal specifications. First, the typical comparable rent plus the percent increase from the rent control measurement type has to be compared with the relevant condition in the new contract. If the rent in the new contract exceeds the typical comparable rent plus ten percent, the contract cannot be saved. If this is the case, the rent is then also compared with the conditions from the previous contract. If the rent in the previous contract is higher than the typical comparable rent plus the rent price, it must be possible to save the contract. This prevents the risk of violating the law.
- Graduated rental agreements: To coordinate the rent with the law regarding the rent control for future graduations, too, PROMOS provides the option to extend the existing validation to future conditions (graduated rents). To implement this, we highly recommend customer-specific coordination.
Legal conformity: With the PROMOS rent control solution, you can map the actual situation for the cities concerned and thus meet the legal specifications.
Automation: You can use the PROMOS mass
maintenance for rental objects or initial maintenance of the “rent control”
- Commercial real estate employees
- Employees from the rent calculation field
- Employees who conclude new lease-outs (landlords)
- SAP® RE-FX