Ask an attorney: Who pays realtor’s fee?

by Holger Blug Kaiserslautern Legal Services Center

Q: I’m searching for a house to rent on the German economy. If I go through a German realtor to find one, who has to pay the realtor’s finder’s fee?

A: Searching for a home to rent in Germany can be very stressful. It requires some luck and patience, and it can also be quite costly. Besides the rent that you will have to pay, the landlord will require you to pay a security deposit, or “Kaution” in German, and if you use a realtor, “Immobilienmakler,” they may charge a finder’s fee, “Maklergebuehr.” Historically, the tenant has been saddled with the realtor’s fee in most cases, but a recent change in German law may provide some relief for current and future house hunters.

According to German brokerage law, a realtor is entitled to a finder’s fee if he either negotiates a rental contract or initiates the opportunity to enter into such a contract. This means that merely advertising and showing the house could trigger the requirement to pay a finder’s fee. And even though it is usually the landlord who hires a realtor to find him a tenant, in the past, it was standard practice for the tenant to be charged the finder’s fee. Sometimes realtors even managed to charge finder’s fees to both the tenant and the landlord.

All this changed on June 1, 2015, when significant reforms to the German law governing realtors’ finder’s fees, designed to better protect tenants, took effect. Applying the so-called customer principle “Bestellerprinzip,” under which the one who places an order must pay the bill, now only the person who hired the realtor must pay the finder’s fee. Hence, the realtor can no longer charge both parties a finder’s fee. Since it is usually the landlord who hires the realtor to find him a tenant, the landlord will normally be the one who has to pay the finder’s fee from now on.

According to the new rules, the tenant does not have to pay a finder’s fee unless he retained the realtor’s services to find him a house or an apartment. Only if the realtor is solely and exclusively working for the tenant, starting the search for a house or an apartment after he received a request to do so from the tenant, can he charge the tenant a finder’s fee. An independent request by the tenant is necessary.

That means the tenant can no longer be forced to pay the landlord’s finder’s fee. Once the realtor begins advertising a house or apartment on a website or in the papers, there is obviously no doubt that he was hired by the landlord, and the tenant cannot be charged anymore. If the realtor illegally tries to charge the tenant a finder’s fee, the realtor can even be slapped with a fine. Any agreement between the tenant and the realtor or the tenant and the landlord stipulating that the tenant will have to bear the finder’s fee is void.

In addition, it is now illegal to charge the tenant with “hidden fees.” The landlord is not allowed to charge a higher rent in order to get back what he spent on the finder’s fee, nor is he allowed to sell overpriced fixtures or furniture to the tenant. Moreover, the realtor is not allowed to charge an administrative fee or an extra fee to make sure the previous tenant vacates the apartment in time.

Another change under the new law that was designed to protect tenants is the formal requirement for brokerage contracts. In the past it was possible to conclude the contract orally or by implied consent. Now, the contract has to be in text form. Text form does not require a signature, but it must be in writing and it must be clear that both parties wanted to conclude a legally binding contract. If these requirements are not met, the contract is void and the realtor is not entitled to charge a finder’s fee, even though he may have already provided his services.

If a tenant is improperly charged a finder’s fee in violation of these new rules, the realtor is now required to reimburse the fee. Since these changes to German rental law do not apply retroactively, they have no effect on brokerage contracts concluded before June 1, 2015, even if the lease was signed after that date.

These new rules only apply when you rent a place to live and are not applicable when you are buying a house or apartment.

As you can see, German rental law is a tricky area that is constantly changing. It constitutes a major portion of the practice of the German Legal Assistance Attorneys who work for the military, especially in communities like Kaiserslautern, where there is high demand for housing and limited on-post options. If you are new to Germany and are unfamiliar with German rental law practices, contact your legal office.

Editor’s note: This article is for general information only and does not constitute legal advice or create an attorney-client relationship. You should always consult an attorney for specific legal questions.