Rent and regulations

Your rent can be set in many different ways. As a starting point, there is a basic rent, but in addition, there may be charges for maintenance, improvements, on-account water and heat, etc.

When the rent on a private rental property rises, this is done on the basis of the rules in two different laws: The Rent Act and the Housing Regulation Act. Together, these acts comprise the rules for housing rental in Denmark.

Warning of rent increases vary depending on:

  • Which municipality you live in.
  • When the property was constructed.
  • The number of rental units in the property.
  • If there is a business in the property.
  • If you have questions about your notice, please feel free to contact us.

 

Cost-based rent

In most municipalities, the rent in many properties is determined on the basis of the property's operating expenses. Operational expenditures include government taxes and duties, the costs of waste disposal, water, public lighting, insurance, building superintendent and other upkeep of property, including the statutory provision for maintenance, administration, returns and the like.

When the property's operating expenses are rising, the rent can be increased with three months' notice so operating costs are reflected in the rent on an ongoing basis. The increase is usually announced in September. The rent increase is then valid from the following 1 January.

In the case of rising operating costs, a rent increase may be announced at any time of the year.

In newer properties the cost-based rent can be unrealistically high. In this case the landlord provides a rent reduction, so the rent corresponds to the value of the premises.

You can read more about cost-based rent in our leaflet ‘Changes to the rent’.

Maintenance costs

Along with operating costs, tenants may be charged an amount for maintenance of the property and in some cases for internal maintenance of the individual units.

The payment for the property's maintenance consists partly of a basic amount per square metre and partly by a supplement, which depends on the property's technical installations (lifts, heating and antenna systems, door telephones, etc.).

Increase

Payment for internal maintenance and to the property's maintenance shall be increased each year on 1 January with a percentage that follows the development of the net price index.

The increase must be announced with three months’ notice, and therefore typically takes place at the same time that notice is given of cost-based rent.

You can read more about maintenance costs in our leaflet ‘Changes to the rent’.

Taxes and fees

Rental properties are subject to taxes and fees, in principle in the same way as someone who owns a condominium or house will be required to pay property taxes. If taxes and fees rise, the increase is added to the rent. The taxes and fees include property taxes, building tax, the cost of waste disposal, water and water diversion fees, common lighting, etc.

Taxes and fees are actually a part of the operating costs, but since we don't have the ability to anticipate expenditure size, because they are determined by the government, there are some very specific rules when the rent increase is due to rising taxes and fees.

Increase with retroactive effect

If property taxes and fees rise, there is a possibility that the increase is added to the rent with retroactive effect. That is, from the time when the property is required to pay the increased fees to the government.

However, the rule is that the rent increase must be announced five months after the government imposes the new elevated property taxes.

Municipalities often first issue property tax levies in December or January, although they come into force on 1 January. Therefore rent increases must be announced before the end of May to comply with this rule. We therefore announce tax and duty increases in the period from January-May with three months' notice, and it is with retroactive effect from 1 January. You should therefore be aware that there may be a post-clearance recovery valid for 1 January until the announcement comes into force.

You can read more about taxes and duties in our leaflet ‘Changes to the rent’.

Deposit and pre-paid rent

Your deposit and pre-paid rent are adjusted in line with price developments in taxes and duties.

Indexation

If your rent needs to be indexed, it is indicated in section 11 of your tenancy agreement.

Indexation is based on rents being adjusted once a year by the percentage that the net price index has risen. This form of regulation is always agreed in the lease. The lease indicates on which date the rent increases, and which index is to be used. Indexation is always based on the previous year’s rent.

Notification

You will always be notified of a rent increase. But that does not mean that you necessarily receive the notice no later than three months before the regulation enters into force, as is the case with all other rental adjustments. This is because the date of the change is indicated by your tenancy agreement.

Stepwise rent increase

Your tenancy agreement may indicate that rents must rise by specific amounts at specific times. This is called a stepwise rent increase.

After 1 July 2015, stepwise rent increases may no longer be agreed. If you have leased your unit before that date, the agreement continues as indicated in your tenancy agreement.

Your tenancy agreement must clearly state when and by how much the rent increases, and there must be an end date for the stepwise rent increase.

In the period of time you pay rent, your rent may be regulated due to increases or decreases in taxes.

On-account payment of water and heating

Heat and water accounting is calculated for one year at a time. Your tenancy agreement indicates when the heat and water accounting period ends in your property. The property's heat consumption also includes the costs of heat supply and energy labelling.

You should be aware that it takes 3-4 months after the heating or water accounting period before you will receive the accounts.

If you are to receive a refund, the settlement shall be made along with the rent the month after you receive the accounts. If you owe money, the amount will be charged a minimum of one month after you receive the accounts.

On-account payments

Each month you make an on-account payment. Your on-account payment, deducted from your total consumption, equals your settlement. If you paid more on-account than you consumed, you will receive a refund. If you paid less on-account than you consumed, you will receive a bill.

If you receive a bill, we will adjust your on-account payment so that – as far as possible and subject to price changes – you can avoid receiving a similar bill in the following year.

You should be aware that if you move out of your rental unit, you will be responsible for paying a reading fee for the utilities.

You can read more about the on-account water and heat in our leaflet 'Changes to the rent'.

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