Learn what the law suggests for Berlin residential or commercial property owners and proprietors in our FAQ.

For which flats does the rent cap apply?

Rent cap regulations use to non-public housing. Excluded from the regulations are publicly subsidised housing, social well-being flats, flats in halls of residence and recently constructed flats that were very first all set for occupancy on 1 January 2014 or that have been brought back for property purposes from uninhabitable and empty former home that was transformed at a cost commensurate with a brand-new structure.

Commercial space that has actually been converted and rededicated as living space at substantial expense is also left out from the lease cap.
The lease cap uses to social housing which no longer falls under IBB dedication. In this case, it is not the rent on the efficient date, but the last lease concurred in the dedication period that is to be used as the basis.

The law says "rent in accordance with the rent cap" - what does that suggest?

According to Art. 3 (4 ), lease in accordance with the lease cap means the net base rent (not consisting of operating expenses and utility costs for heating and warm water), however including all surcharges for furnishings and home furnishings.

In rental contracts in which no net base lease has been agreed, the proprietor must, if needed to do so and at the demand of the skilled authorities, provide renters with the accurate net base rent quantity in addition to the information utilized for the calculation basis.

The length of time is the rent cap valid?

Can I still increase the lease now?

The essential date for the "freezing" of the lease is the date of the Senate resolution on 18 June 2019, i.e. after the law enters force, the standard for a re-letting is the lease that was effective on the crucial date.

In principle, the very same level of lease can be concurred with the next renter. However, this is just allowable if it does not exceed the upper lease limitations under Art. 5 MietenWoG.

If the flat was not rented on the key date of 18 June 2019 or if an occupant change has happened between the essential date and the effective date of the law, the rent consented to throughout this duration will be "frozen".

How much lease can I charge as a property manager? In order to determine the upper rent limitations, the leas listed in the 2013 Berlin Rent Index were upgraded to show real wage advancement until 2019. The upper rent limits are stemmed from the table in the lease cap law and are graduated according to developing age classes and amenities. Surcharges are likewise allowed. For flats with modern facilities, the upper limitation is increased by 1 euro. Relevant here are just those amenities offered by the property manager. According to the law's rent table, contemporary facilities exists if the home has at least three of the 5 following attributes:

The lease ceiling is likewise increased by a surcharge of 10% if the property space is located in a building without any more than 2 flats. So for the computation of the acceptable lease: rent ceiling according to the rent table + additional charges noted above.

You can find detailed definitions of the five contemporary amenity criteria, as stated by the Senate Department for Urban Development and Housing rent cap implementation regulations, in our list for owners and landlords.

Just how much lease can I charge if I re-let the system?

If the residential unit is re-let after the law enters force, the law prohibits taking a greater rent than the rent that has been "frozen". If the frozen lease is greater than the suitable upper lease limitation (see rent table), the unit might just be let at the statutory lease limit. If needed, additional charges for modern-day facilities and modernisation steps can be taken into consideration in the rent ceiling. In the case of flats whose previous lease was less than EUR 5.02 per square metre, the rent may be increased by a maximum of EUR 1 as much as EUR 5.02 per square metre upon re-letting if contemporary amenities are readily available. Modern facilities exists if the home has at least 3 of the five following attributes:

- Passenger lift, available without thresholds from the flat and from the structure entrance
- Fitted kitchen
- High-quality hygienic devices
- High-quality floor covering in the majority of spaces
- Energy usage worth of less than 120 kWh/( m ² a)

When is a rent thought about excessive and when can it be minimized?

A rent is considered extreme and is therefore prohibited if it is more than 20% above the relevant upper lease limit in the lease table, taking into consideration the residential place.

Appropriate additional charges and deductions are also suitable:

- Flats in a simple house -0.28 euros
- Flats in a medium suburb -0.09 euros
- Flats in an excellent house +0.74 euros

Are modernisations still possible? To what extent can they be allocated to the lease?

Certain modernisation measures and their apportionment to the lease are permitted approximately a maximum of EUR 1.00 per square metre. This limitation likewise uses in the event of numerous modernisations during the law's credibility period. The requirement is that landlords inform the Investitionsbank Berlin (IBB) of increased rent based upon modernisation procedures. The IBB is providing an online notice procedure. You can send a modernisation notice here.

Please note that when re-letting residential area after an apportionable modernisation, the 5 modern feature criteria discussed above might not be furthermore apportioned (in order to prevent a boost of the upper lease limitation by up to 2 euros/sq. m).

Which modernisations are permitted?

Apportionable modernisation procedures are those to which property owners are required by law:

- For thermal insulation of the building envelope, basement ceiling, top flooring ceiling or roofing system
- For making use of renewable resources
- For energy-efficient window replacement
- For heater replacement with heating optimisation
- For the addition of a lift
- For the removal of barriers through limit elimination, door widening or restroom conversion

What options do I have as a residential or commercial property owner if the allowable lease leads to losses or to a threat to the building structure in the long term?

In remarkable cases, the IBB can approve a greater allowable rent. The prerequisite is the existence of unnecessary economic difficulty. This is especially pertinent if preserving the allowable lease would cause permanent losses for the landlord or endanger the building structure over the long term.

A loss is considered to exist if current expenditures surpass earnings for the appropriate service entity. A danger to the building structure exists if the earnings from the residential or commercial property is no longer enough for its upkeep.

It ought to be kept in mind that financial difficulty can only be thought about if the hardship is brought on by the lease cap law. Undue financial difficulty is likewise just valid if its event does not lie within the sphere of responsibility of the landlord. In other words, expectations of appreciation in value, expected returns, rising funding expenses outside routine market conditions, expected returns based upon extreme leas and losses resulting from the division into company entities do not make up a case of difficulty.

You can send a difficulty application to the IBB here.

What info commitments do I have as a landlord?

Landlords must provide renters with details on the scenarios appropriate to the calculation of the rent ceiling within two months after the law entering into force and also before the conclusion of a brand-new rental agreement, without being asked for to do so. Landlords need to inform renters of the quantity of the crucial date lease on 18 June 2019 upon demand. Prior to the signing of a brand-new lease, landlords must inform future occupants of both without being asked.

You can discover details of the info obligations under the lease rate cap in our list for residential or commercial property owners and property owners.

How are infractions punished?

A fine of as much as 500,000 euros may be imposed for offenses of the lease price cap.

Where can I find more details?

At www.engelvoelkers.com/mietendeckelberlin you can find regular updates on the rent cost cap.

Do you have additional concerns?

We would enjoy to recommend you! More than 50 real estate experts for the Berlin domestic and business residential or commercial property market are offered to you for further information at any time face to face, by telephone or by e-mail.

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Everything about the Berlin lease rate cap:

This implies the rent cost cap

Rent rate cap calculator

Obligations for property managers

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