Letting agent fees in Germany: who pays the agent?

The rule in plain terms

An agent has a claim to a fee only if a lease actually results from the agent’s mediation or from the agent’s referral of the opportunity. The agency contract must be in text form (§ 2 (1) WoVermRG).

Paragraph 1a then bars the agent from demanding, accepting or having promised from the home-seeker any fee for the mediation or the referral of an opportunity to conclude a residential lease. The exception: the agent obtains the order to offer the flat from the landlord or another person entitled only because of the agency contract with the home-seeker.

What does that mean in practice? If a landlord hired the agent, the landlord pays. If the agent obtains the instruction from the landlord only because of the contract with the home-seeker, the home-seeker may be charged. The statute turns on who instructed the agent and why; read the agency contract for that.

Clauses that do not work

An agreement is void if it departs from paragraphs 1 to 4 of § 2 or if it obliges the home-seeker to pay a mediation fee that the landlord or a third party owes (§ 2 (5)). Practical consequences:

• A clause in a lease or viewing form that shifts the landlord’s agent fee on to you is void.
• The same goes for a “handover fee”, “administration fee” or similar if it is in truth the fee the landlord owes the agent. The Code also bars additional charges for related work or minor services, such as registration fees, writing fees or reimbursement of expenses (§ 3 (3)), with a limited exception for proven expenses exceeding one month’s rent and for expenses on a lease that does not come about if that was agreed.
• Advance payments may not be demanded, agreed or accepted (§ 2 (4)).
• An obligation to buy goods or services in connection with the order is void (§ 3 (4)); an obligation to take over furnishings or equipment from the previous occupant is not covered by that rule.

Ceiling where a fee is allowed

Where the narrow exception allows a fee, it must be stated as a fraction or multiple of the monthly rent (§ 3 (1)), and it may not exceed two months’ rent plus statutory VAT. Service charges that are settled separately are left out of the monthly rent for this purpose (§ 3 (2)).

A worked calculation (formula): with a monthly net rent of €1,000, the ceiling is 2 x €1,000 = €2,000 plus VAT.

Cases where no fee is due from anyone

Under § 2 (2) the agent has no claim to a fee if the lease only continues, extends or renews an existing tenancy of the same rooms, or where the agent is the owner, manager, tenant or landlord of the flat, or has a legal or economic interest in the legal person that is owner, manager or landlord (and the same in reverse). Under § 2 (3), no fee may be claimed against the home-seeker for publicly subsidised or other rent-controlled housing of the kinds the Act lists.

Fines

An agent who, in breach of § 2 (1a), demands, has promised or accepts a fee from the home-seeker commits an administrative offence. The same applies where the fee is above the limit in § 3 (2). These two offences carry a fine of up to €25,000; other breaches (not stating the fee as a fraction or multiple of rent, offering flats without an order, or leaving out required information in adverts) carry up to €2,500 (§ 8 WoVermRG). Fines are for the authority, not for you to enforce; as a home-seeker you instead reclaim what you paid.

If you paid anyway

§ 2 (5) makes such an agreement void, and the Act itself sets out no repayment procedure; how to reclaim a payment is a question for a lawyer or a tenants’ association. Keep the agency contract, any invoice, proof of payment and the listing.

What this does not cover

The WoVermRG regulates the mediation of residential leases. When you buy a home, brokerage rules sit in §§ 656a to 656d of the Civil Code (BGB), a separate topic. Also, a person who is not an agent, for example a flatmate passing on a room, is outside the Act. Payotte does not state a typical commission for sales or lettings, because none is set by law.

An agent needs a permit under § 34c of the Trade Regulation Code (Gewerbeordnung). The register of intermediaries in § 11a GewO does not list § 34c permits, so there is no public register of letting agents to check; the permit comes from the competent chamber of commerce or trade office. Ask the agent for the permit and which authority issued it.

Which professional to consult

A tenants’ association or a lawyer specialised in tenancy law can review an agency contract and a fee demand. The trade of the real estate agent is described on Payotte. Payotte does not recommend individuals.