What is the rent cap in Berlin?
Law on rent caps in the housing sector in Berlin
Berlin currently has around 3.7 million inhabitants, and the population is increasing by about 40,000 people every year. There are 1,906,400 apartments in Berlin, of which 1.6 million are rental apartments. 85 % of the Berliners are tenants.
Entry into force
The law was passed by the Berlin House of Representatives on 30.01. and came into force on 23.02.2020.
With retroactive effect from the cut-off date of 18 June 2019, rents for existing apartments in Berlin were frozen for five years. Rents that were already above the agreed limit on the cut-off date of 18 June 2019 are to be reduced on 23 November 2020.
On average, Berliners pay low rents compared to Hamburg and Munich.
Nationwide rents, but also property prices, have risen sharply. This is mainly due to the fact that there is too little construction and a lack of investment alternatives. The Berlin Building Senate has calculated that the rent index has risen by 18.1% over the last five years, or by an average of 3.3% per year. Supply-side rents have even increased by 30.5 % or 5.5 % annually over the last five years. The average net cold rent for new rentals is € 10 per square metre.
When the law comes into force, landlords may not demand more than before when re-letting. The upper limit depends on the year of construction, the location of the apartment and its size (see table).
When we talk about rent in the following, we mean the net cold rent, i.e. without the operating costs and without heating and hot water costs.
When may the landlords increase the rent?
The rent cap applies to all rental agreements that already existed on the key date 18.06.2019 and still exist. This does not apply to publicly subsidised housing, owner-occupied flats, flats in halls of residence and new buildings that were ready for occupancy for the first time since 1 January 2014. This also includes attic flats that were subsequently added to the house. In the case of apartments where the previous rent was less than 5 €/m², the rent may be increased by a maximum of 1 € to up to 5.02 €/m² on re-letting, provided that modern equipment is available.
A modern furnishing is present if at least three of the following features are present:
- elevator without thresholds
- fitted kitchen
- high-quality sanitary facilities
- high-quality flooring in the vast majority of living spaces
- Energy consumption characteristic value of less than 120 kWh/(m² a)
Another exception are detached or semi-detached houses. These can be rented at a 10% higher price.
Landlords can raise rents by only 1.3% from 2022, allegedly to cushion inflation. However, the rent must then remain below the prescribed rent ceiling.
Modernisation costs may only be passed on to tenants at €1 per square metre per month. Recognised modernisation measures include measures to which landlords are obliged by law. Furthermore, measures apply: for thermal insulation, the use of renewable energies, energy-efficient window replacement, heating system replacement, elevator extension or measures for barrier-free access.
The passing on of costs incurred by luxury renovations is excluded. Other modernization costs must be notified in advance to the responsible authorities.
Berlin rents in 2013 were only between 5.95 and 9.80 €/m² for normally equipped apartments (with collective heating and bathroom). A further 13.4% was added to these values, because it was assumed that income has risen so much since then.
For flats in a simple location there is a discount on the rents in the rent table of 28 cent/m², for flats in a medium location nine cent/m² are deducted and for flats in good locations 74 cent/m² are added.
Hardship clause for landlords
In cases of economic hardship of landlords, rent increases may be approved if this is absolutely necessary to avoid endangering the substance and permanent losses. Approved rent increases above the upper rent limits are cushioned by a rent subsidy. The rent subsidy may not exceed the amount exceeding the rent ceiling.
Tenants do not have to become active
Tenants do not have to become active. Landlords must provide tenants with information on the relevant circumstances for the calculation of the rent ceiling without being asked until 23 April 2020 or before the conclusion of a new rental agreement. Once the rent cap comes into force, it is generally prohibited to demand a higher rent than the rent on the reporting date. Tenants can report violations by the landlord to the district housing office.
Reduction of rents from November 2020
The law stipulates that rent above the set amount is prohibited. This prohibition will apply from 23.11.2020. Rents that are more than 20% higher than the rent ceiling determined taking into account the residential situation are considered excessive.
Landlords must reduce the rent to the rent ceilings on their own initiative, otherwise they are liable to a fine.
Graduated rents become invalid
Graduated rents are also no longer legally effective after the law comes into force.
If landlords try to increase rents after 18.06.2019, this is not legally valid according to the Berlin Senate.
A fine of up to 500,000 € can be imposed for violations of the rent cap.
Expert opinions prove it: The state of Berlin does not have the authority to pass such legislation. There was also criticism that the subsequent reduction of rents was a violation of the constitution.
The rent cap is considered an encroachment on property, which is strongly protected by the Basic Law. Some legal experts therefore think that the Berlin law violates the constitution. CDU/CSU and FDP have already filed a complaint with the Federal Constitutional Court.
Representative list of rents index table
Comparable rents in line with local standards (effective date 01.09.2018) Net cold rent in Euro per square metre per month
Rental cover table
For apartments in old buildings (ready for occupancy until 1918 and 1919 to 1949) without collective heating, without bathroom, with WC in the apartment (IWC), the locally customary comparative rent per square metre of living space is € 2.20 per month less than the amounts shown in column 1 for ready for occupancy until 1918* or column 2 for ready for occupancy 1919 to 1949*. ***
For apartments in old buildings (ready for occupancy until 1918) with collective heating or with bathroom, with WC in the apartment (IWC), the local comparative rent per square metre of living space is € 1.41 per month less than the amounts shown in column 1***.
For apartments in old buildings (ready for occupancy from 1919 to 1949) with collective heating or with bath, with WC in the apartment (IWC), the customary local comparative rent per square meter of living space is 0.43 € per month below the amounts in the indicated column 2***.
For newly built flats (ready for occupancy 1950 to 1964) with collective heating or with bath, with WC in the flat (IWC) the local comparative rent per square metre of living space is 1.45 € per month below the amounts in column 3***.
The data marked with * and ** have only limited significance due to the small number of rental values collected (* = 15 – 29 rental values, ** = 10 – 14 rental values). These deductions can therefore not be assigned to the scope of the qualified representative list of rents. The table fields show the respective mean value (median) and the 3/4 range.
Foto Lizenz: Jerzy Sawluk / pixelio.de