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Due to rising inflation, rental prices are increasing significantly through annual rent indexation. The landlord may index the rent if the rental agreement permits it, but is not obliged to do so: he may also waive (part of) the increase. Tenants and landlords are increasingly making agreements regarding this.
What is rent indexation?
Rent indexation is the annual adjustment of the rent price, usually linked to a price index such as the Consumer Price Index. The clause for this is included in the rental contract. In the event of high inflation, this means a substantial rent increase, for both residential properties and, for example, retail or commercial premises.
Is the landlord always allowed to index?
The landlord may index the rent to the extent permitted by the contract. For regulated residential accommodation, statutory limits apply to the increase; for commercial premises, it is primarily a matter of what has been contractually agreed. Therefore, read the indexation clause carefully.
The landlord can also waive
Indexing is a right of the landlord, not an obligation: he can choose not to increase the rent, or to increase it only partially. In times of sharply rising prices, some landlords refrain from doing so, for example to retain a good tenant or to preserve the relationship. This is then done by mutual agreement.
Make arrangements in consultation
If the indexation hits hard, enter into a dialogue. The tenant and landlord can agree to limit the increase, spread it out, or temporarily suspend it. Record such an agreement in writing so that it is clear what applies and for what period. A good arrangement prevents conflicts and payment problems.
Frequently Asked Questions
Is the landlord allowed to increase the rent annually?
To the extent permitted by the contract. For regulated residential accommodation, statutory limits apply; for commercial premises, it is determined contractually.
Does the landlord have to index the rent?
No, indexation is a right, not an obligation. The landlord can waive (part of) the increase.
Can we make agreements about the increase?
Yes. The tenant and landlord may limit, spread, or suspend the increase by mutual agreement. Record this in writing.
Questions about rent and indexation?
Our legal experts review your indexation clause and lease agreement. View our tenancy lawteam or schedule a free consultation.
