If a rented apartment is inherited, the tenancy is also transferred to the heir or the community of heirs. Heirs are then landlords. Inheritance not only entails rights, but also obligations. But what do heirs need to bear in mind if they want to sell the apartment, continue to rent it out or register their own use for it?
Heirs of a rented apartment must agree on what to do with the property. If they do not reach an agreement, there is a risk of foreclosure. This can lead to considerable financial losses and is best avoided.
Selling a rented apartment
Communities of heirs often decide to sell a rented property because managing the apartment jointly is often costly and many heirs lack the necessary expertise. Although a property management company can be commissioned, if the rental income has to be shared by several heirs, this is no longer worthwhile for many heirs.
As a rule, the proceeds from the sale of an unrented apartment are higher than for a rented one, as demand is higher here. On the other hand, a rented apartment offers investors the advantage that they do not have to look for a tenant first and can generate rental income immediately upon purchase.
A local quality estate agent advises communities of heirs on when it is worth selling a rented property. He will also find a suitable investor and sell the apartment at a fair market price.
Renting out an apartment
If the community of heirs decides to rent out the property, there are a few things to bear in mind. All heirs are equally liable for all costs incurred in maintaining and managing the property. The costs are divided according to the so-called inheritance quota. In practice, this usually means that one of the heirs pays the costs and claims them from the co-heirs. This can quickly become costly for the respective heir. In addition, the income from the rental must be taxed.
Register personal use
Anyone wishing to terminate a tenant's tenancy for personal use must prove that there is a legitimate interest. This would be the case, for example, if the landlord wants to use the apartment himself or demonstrably needs it for his family members or members of his household. Here too, the community of heirs must be in agreement. The statutory notice periods and formalities must be observed in the event of a termination for personal use.
Are you unsure what to look out for when selling your condominium? Get in touch with us! We will be happy to advise you.
Further information can be found here:
https://www.badische-zeitung.de/kaufpreisoptimierung-durch-renovieren-oder-sanieren–185062692.html
https://www.handwerksblatt.de/betriebsfuehrung/renovieren-vor-dem-immobilienverkauf
Notes
For reasons of better readability, the generic masculine is used in this text. Female and other gender identities are explicitly included where this is necessary for the statement.
Legal notice: This article does not constitute tax or legal advice in individual cases. Please consult a lawyer and/or tax advisor to clarify the facts of your specific individual case.
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