Net cold rent lease contract clause for real estate loan

Good day!

We are currently just about to purchase a property. Due to the size of the property, we initially planned to rent out part of it as a granny flat. Unfortunately, the upper and lower parts are not soundproofed, and renting it out is practically only possible to someone who is hard of hearing, without investing significantly more money than we currently have. Since we are not financially dependent on subletting urgently, the plan was to maybe offer it initially only as a holiday apartment and either retrofit it later or not. It would basically be a bonus to save a little extra money for future improvements, etc. However, we have already managed to include reserves in the monthly budget. Since the property is rather at the upper limit of our budget, the financial advisor included the potential subletting in the calculations, but it always sounded as if it didn’t really matter whether and when someone would actually move in, and it wouldn’t be monitored either. Generally, banks always calculate significantly higher living expenses than we actually have, since we live rather frugally overall. However, the loan contract now contains a clause AFTER disbursement stating that we must have a minimum net cold rent in the lease agreement. Since the disbursement is not affected and this is not due immediately after moving in, we are now wondering if this could still be a problem. Theoretically, we could just find someone who signs the lease agreement for us if that is all the bank cares about. As long as we can always pay our installments without any problems, this should at least not become an issue. I assume it would become a problem if we actually cannot pay our installments and then the fact that we have no subtenant could lead to an immediate termination of the contract.

Does anyone have experience with this? Are we worrying unnecessarily or should we rather look for another loan where this is not a clause?

Unfortunately, the upper part and the lower part are not soundproofed, and renting it out is basically only possible to someone who is hard of hearing, without investing significantly more money than we currently have.

The tenant cannot be reasonably expected to tolerate the noise, and you want to live in it yourselves and put up with that?

Since the property is rather at the upper limit of our budget

Why buy such a noise-permeable property at the upper limit then?

we are now still wondering if this could be a problem.

Yes, because you have to present a real rental contract. Otherwise, you break the contract and the bank has a right to terminate. It’s quite simple.

Theoretically, we could just find someone to sign the rental contract for us if that’s all the bank cares about. As long as we can always pay our installments without problems, that shouldn’t be an issue at least.

You can do it that way, but it is effectively fraud. Even if it doesn’t get noticed (unless the bank verifies the rent payments through bank statements).

I assume it would become a problem if we actually cannot pay our installments and then the fact that we have no subtenant could lead to an immediate termination of the contract.

AT THE LATEST. The right to terminate exists the entire time if you have no tenant.

Are we worrying unnecessarily or should we rather look for another loan where this is not a clause?

I wouldn’t sign the contract. The devil is a squirrel
And then it can really lead to trouble – either with the bank or with the forcibly required tenant who finds it too loud (or the landlords who have the same noise problem). Talk to the bank that you want to do without the tenant and only see renting out as a possible option.

The tenant cannot be expected to tolerate the noise level, and you want to live there yourselves and put up with it?

Why then buy such a thin-walled property at the upper limit?

Quite simply: Because we are not financially dependent on the tenant. But having more space than we actually need offers potential for the future. Either if we eventually have more money to improve the soundproofing, or if we actually find a solution where this doesn’t play such a big role. Maybe at some point the children will move in with their families, or holiday rentals will be profitable enough (where people also aren’t at home all day), or or or.

AT THE LATEST. The right to terminate exists the whole time if you don’t have a tenant.

As mentioned: it’s not possible to present a rental agreement at the time of contract signing anyway, simply because the rental apartment is not yet fully renovated. So I don’t quite understand the “at the latest” here. Does that mean just “theoretically the bank could terminate at any time, but doesn’t”? It’s only stated in the contract as an additional agreement, but without a date.

Talk to the bank about waiving the tenant and seeing renting out only as a possible option.

That would be my preference too. I just can’t assess at all whether they would then immediately withdraw the commitment. And since this is already taking so long, it could also be that we won’t get a second chance to find another lending partner.

That would be my preference, too. I just can’t really judge whether they would immediately withdraw the approval again. And since all this is already taking so long, it could also be that we won’t get a second chance to find another lending partner.

You can try to feel out over the phone what it’s like to do without a tenant, or ask what happens if you don’t find one at first. You don’t have to immediately alienate your contact person so that they withdraw the approval. That requires at most moderate tact. But installing new soundproofing afterwards is hardly possible. And holiday guests (staying up late in the evening with beer and wine) or your own family with children are definitely not quiet tenants that you’d want to hear.

I don't quite understand the "at the latest" here.

Normally, you should have a tenant after 6 months. From then on, the bank can terminate if it wants to. The exact time when the tenant must be present can probably be determined legally well. But after 2 years, during which you live in the place, you will no longer be able to say "We are still looking".

Does that only mean "theoretically the bank could terminate at any time, but it doesn't?"

Exactly

Well, it may be that one simply cannot find a tenant - but then one might at least have to prove the effort. I do wonder, however, how the clause is exactly worded, because the case - tenant finding impossible - is actually possible.