BERLIN RENT CAP DECLARED INVALID

A rent cap had been in place in Berlin since 2020, which was intended to curb the rapid rise in rents through four measures. On 15 April 2021, this was declared invalid by the Federal Constitutional Court in Karlsruhe, as it violated the Basic Law. The federal government is responsible for statutory regulation and not the federal states.

Rent control and rent cap – the background

Rents in Berlin have risen sharply over the last decade. Some neighborhoods have seen annual increases in the double-digit percentage range. As a result, tenants have increasingly reached their rent limits. There has been a similar trend in other German cities in recent years.

The German government therefore introduced the so-called rent freeze in 2015. It enables federal states to limit the rent level for new lettings of existing flats in tight housing markets.

This rent cap came into force in Berlin on 1 June 2015. However, as it did not sufficiently slow down the rise in rents, the city also decided to introduce a rent cap in January 2020. The associated law came into force on 23 February 2020 and comprised four measures. One of these was the rent cap for re-letting. In addition, some tenants have been entitled to a reduction in their rent since 23 November 2020.

Consequences for landlords and tenants

For landlords, the decision against the rent cap means that they can assert a repayment claim. Rents may be increased back to the previous amount.

Tenants, on the other hand, will have to pay back the contributions saved unless the housing companies make special arrangements. They will be informed of this in writing by the landlord. Tenants who receive state benefits such as unemployment benefit II and are asked to make additional payments receive a one-off reimbursement for accommodation and heating. The Berlin Senate has also agreed on support that applies to tenants with an income of up to 280 per cent of the federal income limit. For this, an application must be submitted to the Senate Department for Urban Development and Housing, which must include the tenancy agreement, proof of rent payments for the last three months and, if available, a letter from the landlord, as well as proof of identity.

Victor Investment GmbH – Your contact for property in Berlin

Do you have any questions about the current judgment on the rent cap or about property in Berlin in general? Please feel free to contact us! We will advise you individually on your concerns.