Discover what the law implies for Berlin residential or commercial property owners and property owners in our FAQ.

For which flats does the rent cap apply?

Rent cap regulations use to non-public housing. Excluded from the guidelines are openly subsidised housing, social well-being flats, flats in halls of residence and newly built flats that were first all set for occupancy on 1 January 2014 or that have actually been restored for domestic purposes from uninhabitable and empty previous home that was converted at a cost commensurate with a brand-new structure.

Commercial area that has been transformed and rededicated as living space at considerable expense is also left out from the lease cap.
The rent cap applies to social housing which no longer falls under IBB dedication. In this case, it is not the lease on the reliable date, however the last lease agreed in the commitment period that is to be used as the basis.

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

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

In rental arrangements in which no net base lease has actually been concurred, the property manager must, if needed to do so and at the request of the proficient authorities, offer tenants with the precise net base rent amount along with the information used for the computation basis.

How long is the lease cap legitimate?

Can I still increase the rent now?

The crucial date for the "freezing" of the rent is the date of the Senate resolution on 18 June 2019, i.e. after the law comes into force, the standard for a re-letting is the rent that worked on the key date.

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

If the flat was not leased on the key date of 18 June 2019 or if a tenant modification has occurred between the crucial date and the effective date of the law, the lease consented to throughout this period will be "frozen".

Just how much rent can I charge as a proprietor? In order to determine the upper lease limits, the leas noted in the 2013 Berlin Rent Index were updated to reflect genuine wage advancement until 2019. The upper lease limits are originated from the table in the lease cap law and are finished according to developing age classes and amenities. Surcharges are also allowed. For flats with modern-day facilities, the ceiling is increased by 1 euro. Relevant here are just those facilities supplied by the landlord. According to the law's rent table, modern features exists if the home has at least three of the 5 following qualities:

The rent ceiling is likewise increased by an additional charge of 10% if the property area lies in a structure with no more than 2 flats. So for the computation of the allowable rent: lease ceiling according to the lease table + additional charges listed above.

You can find comprehensive meanings of the 5 modern amenity requirements, as specified by the Senate Department for Urban Development and Housing lease cap execution policies, in our checklist for owners and property owners.

How much rent can I charge if I re-let the system?

If the domestic unit is re-let after the law enters force, the law prohibits taking a greater lease than the lease that has been "frozen". If the frozen lease is greater than the suitable upper lease limit (see rent table), the system may just be let at the statutory lease limitation. If needed, surcharges for contemporary amenities and modernisation steps can be considered in the lease ceiling. In the case of flats whose previous rent was less than EUR 5.02 per square metre, the rent may be increased by an optimum of EUR 1 up to EUR 5.02 per square metre upon re-letting if modern-day facilities are offered. Modern facilities exists if the living space has at least three of the 5 following attributes:

- Passenger lift, available without limits from the flat and from the structure entryway
- Fitted kitchen
- High-quality hygienic equipment
- High-quality flooring in the majority of spaces
- Energy usage value of less than 120 kWh/( m ² a)

When is a lease considered excessive and when can it be decreased?

A rent is considered extreme and is therefore forbidden if it is more than 20% above the appropriate upper rent limit in the lease table, considering the domestic location.

Appropriate additional charges and reductions are also appropriate:

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

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

Certain modernisation measures and their apportionment to the rent are allowed approximately an optimum of EUR 1.00 per square metre. This limit also uses in case of multiple modernisations throughout the law's credibility duration. The requirement is that proprietors inform the Investitionsbank Berlin (IBB) of increased rent based upon modernisation measures. The IBB is using an online notice treatment. You can send a modernisation notice here.

Please note that when re-letting property area after an apportionable modernisation, the 5 modern-day facility requirements pointed out above might not be additionally assigned (in order to avoid an increase of the upper rent limit by up to 2 euros/sq. m).

Which modernisations are allowed?

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

- For thermal insulation of the structure envelope, basement ceiling, leading floor ceiling or roofing system
- For using renewable energies
- For energy-efficient window replacement
- For heating unit replacement with heating optimisation
- For the addition of a lift
- For the removal of barriers through threshold elimination, door widening or restroom conversion

What options do I have as a residential or commercial property owner if the permissible 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 requirement is the existence of unnecessary financial difficulty. This is especially appropriate if keeping the allowable lease would cause irreversible losses for the proprietor or threaten the building structure over the long term.

A loss is deemed to exist if present expenses go beyond income for the relevant company entity. A risk to the building structure exists if the income from the residential or commercial property is no longer sufficient for its maintenance.

It should be kept in mind that financial difficulty can only be thought about if the difficulty is brought on by the rent cap law. Undue financial challenge is likewise only legitimate if its event does not lie within the sphere of obligation of the proprietor. In other words, expectations of appreciation in value, expected returns, increasing financing costs outside routine market conditions, anticipated returns based upon extreme rents and losses arising from the division into business entities do not constitute a case of challenge.

You can submit a hardship application to the IBB here.

What info commitments do I have as a property manager?

Landlords should offer renters with information on the situations appropriate to the calculation of the lease ceiling within 2 months after the law coming into force and also before the conclusion of a new rental arrangement, without being requested to do so. Landlords need to inform occupants of the quantity of the essential date lease on 18 June 2019 upon demand. Prior to the signing of a new lease, property managers should inform future tenants of both without being asked.

You can find information of the info commitments under the rent rate cap in our list for residential or commercial property owners and property managers.

How are violations penalized?

A fine of approximately 500,000 euros may be imposed for offenses of the rent price cap.

Where can I find more information?

At www.engelvoelkers.com/mietendeckelberlin you can find routine updates on the rent rate cap.

Do you have additional concerns?

We would enjoy to advise you! More than 50 property experts for the Berlin residential and industrial residential or commercial property market are offered to you for further details at any time personally, by telephone or by email.

Ulrich Blaeser

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All about the Berlin lease price cap:

This means the lease rate cap

Rent cost cap calculator

Obligations for property owners

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