Keeping Up-to-date with the Everchanging Nature of Real Estate – Lawyer Monthly | Legal News Magazine

Keeping Up-to-date with the Everchanging Nature of Real Estate

Karsten Kranich’s professional interest reflects the laws and regulations of life of his clients. His empathy helps him to understand the concerns of his clients through their individual system of values and enables him to protect them through his legal advice. Apart from tenancy and housing law, Mr Kranich also consults his clients in terms of inheritance law and transport law. We speak with him on the changes he has witnessed in Berlin and impacts inheritance has on real estate, which has thus impacted his clients.


How have you seen tenancy law change over the years since you began practising? How has this impacted your clients?

Until 2001, we did not have a homogeneous judge-made law in the field of tenancy law. The German Supreme Court could not decide in tenancy law issues. The highest court you could reach was the Higher Regional Court and this led to different court decisions. But nowadays the German Supreme Court is also responsible for tenancy law cases as the third and last resort. Over the last few years, the German Supreme Court worked tremendously hard and decided many tenancy law cases leading to a more homogeneous judge-made system. I would allege that due to this development the judge-made law now supports the landlord’s interest more than before. A certain social protection of the tenant is not a general criterion anymore, unlike before, where it was sometimes found between the lines of a verdict in earlier times.


What advice would you offer when tenancy contracts are not obeyed by your client’s residents? How often could this be due to missing out important information on the contract itself?

The statutory law, the judge-made law and the specific situation of the contract agreement have an influence when we discuss legal issues. Furthermore the law is always developing. Insofar no contract can rule out everything completely. Our duty as lawyers is to find the right answers. An example: in the past you could allow more than thirty years to unload the refurbishing of a flat onto the tenant with a strict deadline in the contract. Nowadays all these old contract provisions are invalid and the specific condition of the flat after some years is the decisive point.


What big impacts does inheritance have on real estate issues?

Indeed, my clients voice inheritance matters to me when there is an impact to real estate law. It has to be clarified, for instance, what rights or obligations the inheritor has when the tenant or the landlord died. Very often it is also necessary to represent an inheritor against the other joint heirs, when they could not find an agreement about the property; a public auction by court can be then a solution in those cases.


What developments have you noticed in Berlin, which have thus had an impact on real estate?

The rent and costs for real estate have increased tremendously in the last ten years in Berlin. This has led to several attempts by the legislation to establish a counterbalance. For instance, it is prohibited nowadays to rent out your flat as a holiday apartment. The aim is to save the flats for residents in the city. Furthermore, landlords must obey to the average cost of all rents in Berlin, depicted on a binding public rent schedule, as opposed to previously, where the landlord was free to negotiate rent fees. Also nowadays the realtor has to be paid by the landlord, which is different from before, where the landlord namely ordered the realtor to advertise the flat and the tenant had to pay the fee of the realtor. Due to the former judge-made law this was legal; until now, these measures have not been fully sufficient to stop the increasing rents and prices. Other ideas like restricting, by law, the costs for notary or realtor are vaguely discussed in political campaigns.


What changes are you expecting to see in the next year? How does this complement investment opportunities Berlin offers?

We expect that the rent and the price for real estate will further increase in the next years. Also, the possibility to raise the rent after installing a heat insulation will be a way for investors to enlarge their benefits by managing real estate. In this area, the legislation in Germany supports modernisation in several ways. Building law has been renewed by the legislator this year, especially the area of building and selling flats from one hand to the members of an apartment-owner-community, has been ruled in a complete new way. This will probably develop the law rapidly in the next years.

Karsten Kranich
Tel.: 030 / 288 79 057
Fax: 030 / 400 54 137


Lawyer Karsten Kranich has acquired years of experience in different law offices, specialising in real estate law. As an independent consulting lawyer, he devotes himself to tenancy law, inheritance and building law. The specific regulations within these fields can have immediate relevance for the legal relationship between real estate businesses and the living situation of individual persons.

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