After the Federal Constitutional Court of Germany ruled in its decision of 25 March 2021 (2 BvF 1/20, 2 BvL 5/20, 2 BvL 4/20) that the Berlin Law on Rent Restrictions in the Residential Sector in Berlin (“Berlin Rent Ceiling”) was incompatible with the German Constitution and therefore null and void, the displeasure of Berlin tenants was considerable.
Because affordable housing is becoming scarce – especially in Germany’s large cities. The Mietpreisbremse is therefore intended to apply where there is a tight housing market and unfortunately remains the only legal instrument for tenants to be able to limit the rent to a maximum of ten percent above the local comparative rent.
Read here how you can enforce your rights and what you have to consider.
1. Is the Mietpreisbremse applicable to me at all?
If you have concerns about the permissibility of the amount of rent you have to pay, the first question is whether the legal regulations of the Mietpreisbremse apply to you at all. The Mietpreisbremse always applies where a tight housing market has been defined by the individual federal states of Germany. This is then valid for five years. The individual federal states can apply for an extension after this period until 31 December 2025. In Berlin, the Senate issued the Ordinance on the Permissible Rent Level at the Start of the Tenancy pursuant to § 556d (2) of the German Civil Code (Mietenbegrenzungsverordnung) on 19 May 2020 (GVBI. p. 343), thus extending the Mietpreisbremse until the end of 2025.
2. Calculation of the rent index (local comparative rent)
After determining the applicability of the legal rent cap, the next step is to determine the rent index or the local comparable rent for your residential address. There are a few online portals provided by the individual federal states or cities that allow you to calculate the rent index. If, after this calculation, you determine that the net cold rent paid by you exceeds the local comparable rent (Euro/m²/month) by more than 10%, this could be a reason to consider taking the next steps.
3.Letter of complaint
In the further course, it may then be advisable to draft a so-called letter of complaint, in which you inform your landlord that the net cold rent paid by you exceeds the local comparable rent by more than 10%. This gives rise to a large number of legal claims, which are also claimed within the scope of this letter of complaint and are linked to one or more claims against your landlord. We will be pleased to assist you with competent advice regarding the formally correct assertion of the rights resulting from the Mietpreisbremse.
4. Are there any exceptions?
Yes. The Mietpreisbremse does not apply without restriction to new buildings (housing first used and rented after 1 October 2014) due to concerns that investors could be inhibited from creating new rental space. Accordingly, it applies in principle to the re-renting of existing flats. However, there are also a few exceptions to this. In particular, if modernisation measures have been carried out in existing flats, the Mietpreisbremse does not apply to compensate the landlord for the costs of the modernisation measures. Therefore, the first letting after comprehensive modernisation is exempt from the Mietpreisbremse. When comprehensive modernisation is to be assumed was specified by the Federal Supreme Court (VIII ZR 369/18): A substantial construction effort in the sense of comprehensive modernisation can be assumed if the costs reach approx. ⅓ of the effort required for a newly built flat. Only then the application of the Mietpreisbremse is excluded.
It is also important to know that your landlord must inform you in writing when signing the tenancy agreement that the Mietpreisbremse does not apply due to extensive modernisation. If he omits to do so, he cannot claim that the Mietpreisbremse does not apply to your tenancy. However, the landlord has the option to rectify this written form requirement, but he cannot raise the rent until two years after he has provided the required disclosure that the Mietpreisbremse does not apply to you. If the landlord has violated this written form requirement but still demands a rent that is higher than the local comparative rent, the agreed net cold rent is void by law and must be reduced to the rent index applicable at your residential address until two years after the landlord has provided the written disclosure.
Modernisation measures that are not considered “comprehensive” can also justify a rent above the price cap under certain conditions. Please do not hesitate to contact us!
If the landlord has already set the rent above the rent index for the previous tenant, the landlord may invoke grandfathering. Landlords may therefore continue to charge a rent that was permissibly agreed at that time when re-renting. The Mietpreisbremse does not apply.
5. What rights do I have?
A number of claims arise from the Mietpreisbremse. Since 1 January 2019, the landlord is obliged to disclose to you, without being asked and in writing, how much rent was charged by the previous tenant before the contract is concluded with you. You are entitled to this right if you are asked to pay rent that is to be assessed 10% above the permissible local comparative rent. In addition, in the case of the modernisation apportionment already described above, the landlord must provide you with clear information in writing about which exemption the landlord is making use of. If the landlord does not provide this information, you can informally complain and reduce the rent to the local comparable rent. Only when the landlord has provided this information can he increase the rent again two years after providing this information.
Furthermore, under certain conditions, you can retain the difference of the overpaid rent from the time the letter of complaint is received by the landlord.
In addition, the rights of tenants resulting from the Mietpreisbremse were strengthened with effect from 1 April 2020. Since then, they can retroactively reclaim the overpaid rent for tenancies that were established after 1 April 2020. This regulation applies if the tenants complain about the excessive rent within 30 months after the beginning of the tenancy and the tenancy had not yet ended. Complaints made later than 30 months after the beginning of the tenancy only justify a right to reclaim rent that became due after the complaint was made.
For already existing tenancy agreements concluded up to and including 31 March 2020, the reprimand only applies to the future, i.e. overpaid rent can only be reclaimed from the date of the reprimand. In rare cases, however, a claim for damages for the return of the entire overpaid rent may be considered if the necessary conditions are met.
In addition, you can ask for specific information in the letter of complaint regarding the circumstances or facts that are decisive for the admissibility of the originally agreed rent, such as the energy consumption (in kWh/sqm/a) or the year of construction of the building. This way, in case of doubt, you can be conclusively sure in your determination of the permissible maximum rent how the originally agreed net cold rent was arrived at and whether a reduction of the rent can be considered.
If a rent reduction is actually justified, you also have a claim to the return of the pro rata overpaid deposit in the form of a monetary payment.
If your landlord still refuses to accept the rent reduction, you can still take legal action. You can also demand the so-called legal costs (claims for damages) from the landlord that may arise, e.g. through legal advice or legal proceedings, if you are successful. We are at your disposal and will be pleased to advise you.