Addressing an imbalance in which expats pay 28 percent more rent than Danes – The Post

Addressing an imbalance in which expats pay 28 percent more rent than Danes

Rent Hero, a new Copenhagen startup, is trying to flip the tables on landlords who scam internationals out of fair rent

Teething trickiness: Bank account, apartment, job and CPR number (photo: Rent Hero)
August 17th, 2019 5:55 am| by Emile Young

It’s no secret that Copenhagen is getting more expensive to live in. But new data suggests there’s a staggering disparity between how much rent an expat pays compared to a Dane.

According to the Lejernes Landsorganisation (LLO), there are specific regulations concerning the rental price and other aspects of owner-occupied apartments in properties built before 1992. However, these rules are rarely complied with, LLO finds.

“In nine out of ten cases we look at, the rent is too high,” confirmed Claus Højte, the head of LLO Hovedstaden.

New kid on the block
August is an especially busy time for rental turnovers as foreign professionals and students move to Copenhagen, one startup is tackling the rental market inequality head-on.

Rent Hero (renthero.dk), launched by co-founders Alex Dagil and Mads Holtug, educates renters about the legality of their contracts and seeks compensation for tenants when they’re overcharged. With their joint technical and legal expertise, Dagil (CEO) and Holtug (head of legal) want to help both Danes and expats alike. However, they admit that Rent Hero caters especially to expats because they’re the most common victims of overpriced rental schemes.

“Often landlords exploit how you’ve moved to a new country and don’t know the housing laws yet,” Dagil explained.

“Our goal is to get a fair deal for expats.”

Overpaying rent
Dagil first stumbled upon this problem eight months ago while shopping for a new apartment. He signed up for housing platforms – including Housing Denmark, Dansk Boligsormibiling and BoligPortal – but said several landlords stated they would only rent to an expat as they could charge higher prices.

And in general, expats are willing to pay. In addition to the legal minefield surrounding Danish rental laws, expats face tight administrative deadlines to legally reside in Denmark. For instance, foreigners must obtain a residential address as soon as possible in order to obtain a CPR number and, in some cases, receive an identification card. Only then can they open bank accounts or get health insurance.

According to Daniel Hershcovich, a recent arrival from Israel, the higher rental fees seemed justified if it meant a quick conclusion to the housing search.

“I was staying at a hostel, and I just wanted to find an apartment really fast to get a CPR number and get a bank account. I already had a job, so I needed a bank account to get my salary. I didn’t have the luxury of house-shopping for a long time,” Hershcovich said.

Hershcovich spent just over two weeks looking for an apartment and in the end he settled for a place a little out of his price range. He’s not alone in this. According to Dagil, expats pay 28 percent more in rent compared to Danes on average.

Losing deposits
This new data comes from Rent Hero’s built-in calculator, which is accessible both on its site and posted to various Facebook housing groups. Based on the apartment’s location, size, living conditions and monthly rent, along with the number of months lived at the apartment, the calculator performs a rough assessment of whether the tenant has been overpaying for rent.

The 28 percent figure only takes into consideration rent-regulated rental units, Dagil revealed. Sometimes, expats are paying up to 50 percent more for apartments without rent-control. According to Dagil, landlords overcharge tenants at two key points in the rental process: in monthly rent payments and in failing to return the deposit when tenants move out.

“The only renovations you have to pay for are the ones that exceed normal wear and tear. And the landlord is almost never allowed to have the tenants pay for these renovations if they rent for under a year,” Dagil insisted.

Left to their own devices
Indeed, there aren’t a lot of resources to help expats – both professionals and students alike – to navigate the Danish rental market. Among them are Lejeloven.dk, which has an English-language section, and a student housing guide compiled by the University Post, a University of Copenhagen newspaper that is editorially independent from the university.

The online guide provides no guidance on rental laws. Even still, the University Post’s housing guide admits there is a general shortage of student housing and that most students turn to private rooms. On this point, the University Post advises caution: “The private housing market is not regulated well, and many students experience conflicts or even fraud from their landlords.”

Even reputable sites like BoligPortal may contain fake housing adverts, confirms Bolig Portal CEO Henrik Løvig. As such, foreign students and professionals alike are largely left to their own devices.

No cure, no pay!
Rent Hero responds to this grey area by offering advice and education via Facebook posts. While the startup cannot truly help tenants before they’ve moved in, the rent calculator can help tenants assess if their rental terms are fair.

In addition, Rent Hero has a ‘No cure, no pay’ policy, which means it only gets paid if it secures a rent reduction or gets the tenant back-payment for the excess rent they’ve paid. As such, the startup is happy to field legal housing questions from potential clients – essentially for free unless there is basis for a case and the tenant wishes to pursue the case.

“Our incentive is to help you get the biggest compensation possible,” contended Dagil.

“So, it’s free to use our service unlike that of a housing lawyer. Their interest is to sell you hours, not to get the case finished as fast as possible with the highest compensation. Our philosophy is that we don’t get paid unless you get paid!

Get fair rent 101
So how does Rent Hero get expats the fair rent they promise? Easy. After assessing a client’s case, it puts together a legal basis and approaches the landlord to make a settlement.

While a case can take 8-12 months for Copenhagen Municipality to process, according to Dagil most landlords tend to settle within a month in order to avoid having a public record of the case. This was the case for Hershkovich. Even though he initially overpaid in rent, he said Rent Hero helped him reach a quick settlement with his landlady in June.

“It was all very straightforward for me. I didn’t have to talk to my landlady at all. Rent Hero did everything for me. They sent me very clear documentation of what this was going to involve, so it’s the best process that I could imagine,” Hershkovich said.

Keep Copenhagen great
Ultimately, Rent Hero’s goal is to help people get a fair deal and keep Copenhagen an attractive place to live. Unfair rental terms drive up overall prices and can ultimately make Copenhagen less popular with expats, contends Dagil.

“As a country we need some of the expats who want to stay here and help. There are regrettable social implications from renting out real estate for an excessive amount and there’s a reason the market is regulated,” Dagil said.

While housing prospects may seem bleak, perhaps Rent Hero is the hero Copenhagen expats need when tackling the rental market.