Tenants in Germany will no longer bear the full burden of ongoing costs for oil or gas heating when their landlord replaces the heating system. The coalition has agreed on a cost cap for tenants in the new heating law, under which landlords must cover half of the ongoing heating costs going forward. With this agreement, the reform can now proceed to the cabinet. The plans have drawn criticism from real estate and property owner associations, while the tenants' association expressed satisfaction.
"When a landlord chooses a new fossil fuel heating system, they must share in the ongoing heating costs," announced Federal Justice Minister Stefanie Hubig (SPD) on Thursday. When a heating system in an existing residential building is replaced with one that runs on gas, heating oil, or liquefied gas, landlords must then bear half of the grid fees, the CO2 price, and the costs of biogenic fuels. This is set to take effect in January 2028.
From January 2029, a so-called bio-ladder will come into force. Newly installed oil and gas heating systems must then be operated with an increasing proportion of biogenic fuels in four stages, such as biomethane, biogenic liquefied gas, or green hydrogen. Details are to be worked out during the legislative process. It should also be clarified exactly what will apply to non-residential buildings. Tenants there should be "protected at a comparable level," it was stated.
The coalition had already agreed on the reform of the Building Energy Act at the end of February, which allows the continued operation and new installation of oil and gas heating systems in the long term. However, the protection of tenants from high utility costs due to the installation of heating systems using fossil fuels remained a sticking point.
The agreement now reached involved the coalition parliamentary groups as well as the ministries of Justice, Economics, and Construction, and was preceded by complicated negotiations. Justice Minister Hubig now spoke of a "viable compromise between freedom of choice and technology openness for landlords and decisive strengthening of tenant protection."
The property owners' association Haus & Grund sees the cost cap as a "big sham package." The association warned of a "massive burden on private small landlords and further endangerment of the future viability of Germany's building stock." The costs of "years of failed energy policy" are thus simply being shifted onto private small landlords.
The Real Estate Association of Germany also sees the new rules as an "investment brake." The announced freedom of choice in the boiler room for landlords is thus being effectively taken back. It merely shifts responsibility.
Environmental advocates also expressed criticism, but for different reasons. Fossil heating systems should no longer be an option at all, demanded WWF. The federal government is instead "once again creating fossil incentives, and this in the midst of an ongoing fossil energy crisis." Anyone who installs a fossil heating system must also bear the full economic cost risks of operation. BUND expressed similar views and instead advocated for heat pumps.
The German Tenants' Association, however, expressed satisfaction. The 50/50 rule is a "step in the right direction" and must now be implemented consistently. The Federation of German Consumer Organizations also fundamentally praised the plans. It is "right" to involve landlords in the heating cost risks, because tenants "cannot influence the type of heating, but have so far borne the ongoing costs and the consequences of investment decisions alone," explained the vzbv.
However, it is not enough to involve landlords only in the CO2 price, grid fees, and biogenic fuels, the association criticized. In view of the geopolitical situation, it is necessary to also include the independent price risks of oil and gas in the allocation of heating cost risks.
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