Loss of rent

from Wikipedia, the free encyclopedia

From the landlord's point of view, there is a loss of rent if the actual rental income is lower than the rent agreed in the rental agreement with the tenant. The final loss of rent counts as a bad debt loss in accounting .

causes

Continuous obligations such as rental contracts are characterized by the fact that the creditworthiness of the contracting party obliged to pay money can deteriorate during the term of the contract for a wide variety of reasons and this affects the solvency . The risk of non-payment due to creditworthiness can arise shortly after the start of the contract or only later. The main causes of arrears or non-payment of rent by the tenant can be growing debts , unemployment , family problems, increased energy prices or even failed self-employment. Another risk of loss of rent can be seen in the rent reduction , which is due to a lack of the rented property. Renting out rooms at a lower rent than previously achieved is also to be regarded as loss of rent. Pay Mietnomaden the rent entirely or partially, is also here a loss of rent. The vacancy , on the other hand, is not part of the risk of rent default in the narrower sense, because it is caused by non-let residential or commercial space .

In the historically rather seldom encountered form of protest of the collective rent strike, refusal to pay and insolvency were often combined , for example in the Berlin rent strikes in 1919 and 1932. Here, the strikers combined refusal to pay with social or socialist demands ( expropriation of the homeowners).

For 2015, 2.2% of the households surveyed for EU-SILC stated that they had arrears on mortgage or rent payments, compared with 5.8% of the population at risk of poverty.

Rent loss risk

The risk of rent default (also known as rent default risk ) is understood to mean the risk that expected rental income will not be available in whole or in part. A legal definition of Section 29 of the Second Calculation Ordinance defines the risk of loss of rent as "the risk of a reduction in income that arises from unrecoverable arrears in rents, leases, remuneration and surcharges or from vacancy of space intended for renting". In terms of housing, vacancy is also part of the risk of rent default. For commercial real estate it is 4%, for residential real estate it is 2% of the annual net rent.

According to a study by Bielefeld University from 2011, the incidence of loss of rent caused by rental nomads was the highest at 98%, followed by property damage (69%), procedural costs (48%) or enforcement costs (31%) caused by rental nomads. A total of 1347 surveyed landlords named 426 cases in which rent payments were stopped in the first three months.

The risk of loss of rent increases when a main tenant ( anchor tenant ) takes over a large proportion of the rental space and decreases with many small tenants. It also increases with increasing rent, as tenants run the risk that the increased rental expenses are no longer covered by their income (see rent burden rate ). The proportion of housing costs (the proportion of housing costs in the net household income of a private household ) is rising steadily and in 2013 was over 20% in major German cities (e.g. Cologne and Bremen 21%, Frankfurt am Main and Dresden 21.4%, Berlin 22.5% and Munich 23) , 9%). The rent default risk correlates positively with the rental yield . The higher the rental return, the higher the risk of rent default and vice versa. The worse the location of rental properties, the higher the rental yield if there is a high risk of vacancy and rent default. The risk of loss of rent is part of the management costs according to § 187 BewG . These are imputed costs that, in the case of commercial properties, such as operating costs, are included in the management costs and may be passed on to the tenants.

Economic damage from loss of rent

The damage caused by arrears or missing rent payments is not evenly distributed, but depends on the type and location of the property and the corresponding target groups. In relative terms, individual, especially small, landlords can be far more affected than a large real estate company . The endangerment of real estate financing , the loss of private retirement provisions or the insolvency of the landlord can result.

Since there are no nationwide official statistics, published figures only show experience in certain market areas. According to estimates by the owners' association Haus & Grund , landlords in Germany record rent losses due to arrears or missing rent payments amounting to around 2.2 billion euros annually. The company readyfact Germany, which specializes in the protection of rental default risks , assumes that there are around 600,000 cases in which the rent is deliberately not paid. A total of around 30 percent of all tenancies are now considered encumbered, as there are irregular rent payments.

Protection against loss of rent

The landlord has several options to reduce or eliminate the risk of rent default. Deposits and rent guarantees serve the landlord to reduce risk , because they prevent the risk of rent default. If there is a loss of rent, the landlord can make use of this security. Risk transfer occurs when a rental loss insurance is taken out if the insured rooms have become unusable when the insured risk occurs (fire, lightning, explosion, tap water, pipe burst, frost, storm and hail) and the tenant can therefore refuse to pay the rent. Further default risks can be taken out as part of a residential building insurance. The ability to allocate the costs of a separate rental loss insurance to the tenant is disputed for the rental of the apartment. In the case of commercial properties, however, the addition to the provision may be included in the commercial rent as a risk provision for the risk of loss of rent.

Losses in rent due to arrears or missing rent payments can be reduced within the framework of rent factoring. Factoring is a common form of finance in business . The owner gets this way backward or absent rental claims to the factoring companies assign . In return, the landlord receives the purchase price. This purchase price is usually below the outstanding rent. The risk that the claim can no longer be realized is completely transferred to the factoring company. In January 2009, the banking supervisory authority BaFin added rental factoring to the catalog of supervised financial services .

prevention

Insurance or rental factoring cause financial and organizational effort. Reducing the risk of rent default is not always efficient. Losses in rent can therefore usually only be effectively reduced through precautionary action, such as efficient creditworthiness and property controlling and corresponding key figure-oriented portfolio reporting to administrators and owners. If there is a large stock of rental space, it is advisable to rent it to different target groups (e.g. professional groups for private tenants, sectors for commercial tenants) in order to diversify the risk . Well-preserved stocks reduce the risk of justified rent reductions. In the event of credit-related failures, a suitable dunning process or legal advice is necessary.

Web links

Wiktionary: loss of rent  - explanations of meanings, word origins, synonyms, translations

Individual evidence

  1. ↑ Housing: Economic burdens from payment arrears Website of the Federal Statistical Office , accessed on April 3, 2017
  2. ↑ Hanspeter Gondring / Eckard Lammel (eds.), Real Estate Management Handbook , 2001, p. 793
  3. ↑ Bielefeld University, Research Center for Real Estate Law (Markus Artz / Florian Jacoby), tenant protection and willingness to invest in residential construction: Loss of rent due to so-called "tenant nomads" , 2011, p. 12
  4. ↑ Alexander Blankenstein, Difficult Tenants , 2014, p. 12 f.
  5. ↑ Statista The Statistics Portal, Share of housing costs in net household income in selected cities in Germany in 2013
  6. ↑ Florian Müller, Advantageous acquisition strategies for owner-occupied residential property as retirement provision , 2009, p. 21
  7. ↑ 2.2 billion euros - rent arrears remain at a high level
  8. ^ Frank von Fürstenwerth / Alfons Weiss, Insurance Alphabet , 2001, p. 434 f.
  9. ↑ Wolfgang Schmidt-Futterer , Großkommentar Mietrecht , 11th edition 2013, § 556 BGB marginal number 178
  10. ↑ Friedrich Borrosch, income tax return, 2015, p. 1229
  11. ↑ Landlord tips: Avoid loss of rent ( memento of the original from October 20, 2015 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. Retrieved November 5, 2013 @1@ 2Template: Webachiv / IABot / ratgeber.immowelt.de

literature

  • German Tenants' Association, Housing Deficiencies and Rent Reduction, 2011, ISBN 978-3933091888
  • Metzner, S. / Opfermann, M. / Witzel, D .: KPI-oriented portfolio reporting for property companies and direct investments, 2008, ISBN 978-3837042719
  • Sternel, Friedemann: Current Tenancy Law, 2009, ISBN 978-3504450151