[“Housing market: Regional Court questions part of Berlin’s rent cap”]

According to a ruling of the Berlin Regional Court, upper limits for rents are constitutional. But they could not be applied retroactively.

A civil chamber of the Berlin Regional Court has questioned part of the controversial rent cap in the capital. In a recent ruling, the court classifies the law with state ceilings on rents, which is unique in Germany, as constitutional. However, according to the judges, these limits could not apply retroactively from June 18, 2019, but only since the rent cap law came into force on February 23, 2020. Accordingly, rent increases above the ceilings would only be prohibited from March 2020.

According to the court (AZ 66 S 95/20), the reference date in the previous year contained in the law is a materially relevant reference point for determining the absolutely permissible rent level. However, this does not change the fact that the statutory prohibition of higher rents did not yet exist on 18 June 2019.

With the Rent cap law, rents for 1.5 million apartments were frozen for five years – at the level of 18 June 2019, the day on which the red-red-green senate presented the first key points for the cap. From 2022, existing rents may increase by a maximum of 1.3 percent annually. If an apartment is rented out again, the landlord must adhere to fixed ceilings and the last rent demanded.

With the rent cap, the Berlin Senate wants to slow down the recent sharp rise in rents in the capital. Legal action against the law is pending before the state and federal constitutional courts.

The ruling of the Regional Court, in turn, related to an individual case concerning the legality of a rent increase. However, it could also be of fundamental importance. For if this case law were to stand, Berlin landlords who have not increased rents since 18 June 2019 in the knowledge of the planned rent cap could make up for this – at least until the month of February.

The judgment is not yet final. The regional court did not allow an appeal. However, the plaintiff may appeal to the Federal Supreme Court

Image source: https://bit.ly/2BLUwWy

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