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

For which flats does the lease cap apply?

Rent cap policies use to non-public housing. Excluded from the regulations are openly subsidised housing, social well-being flats, flats in halls of residence and freshly built flats that were first ready for tenancy on 1 January 2014 or that have been restored for domestic functions from uninhabitable and empty previous home that was converted at an expense commensurate with a brand-new building.

Commercial area that has been converted and rededicated as living area at considerable expenditure is likewise omitted from the rent cap. The rent cap applies to social housing which no longer falls under IBB commitment. In this case, it is not the lease on the effective date, but the last rent concurred in the dedication duration that is to be utilized as the basis.

The law states "lease in accordance with the lease cap" - what does that indicate?

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

In rental agreements in which no net base rent has been agreed, the property manager must, if needed to do so and at the demand of the skilled authorities, provide renters with the accurate net base lease amount along with the information used for the estimation basis.

The length of time is the rent cap legitimate?

Can I still increase the rent now?

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

In concept, the same level of lease can be agreed with the next tenant. However, this is only acceptable if it does not surpass the upper rent limits under Art. 5 MietenWoG.

If the flat was not rented on the key date of 18 June 2019 or if an occupant modification has occurred in between the key date and the efficient date of the law, the lease agreed to throughout this period will be "frozen".

How much rent can I charge as a property owner? In order to determine the upper lease limits, the leas listed in the 2013 Berlin Rent Index were upgraded to show genuine wage advancement until 2019. The upper lease limitations are obtained from the table in the lease cap law and are graduated according to constructing age classes and features. Surcharges are likewise allowed. For flats with contemporary amenities, the ceiling is increased by 1 euro. Relevant here are only those facilities provided by the property owner. According to the law's lease table, contemporary facilities exists if the living space has at least 3 of the five following attributes:

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

You can find detailed definitions of the five requirements, as stated by the Senate Department for Urban Development and Housing lease cap execution regulations, in our list for owners and proprietors.

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

If the domestic system is re-let after the law enters into force, the law prohibits taking a greater lease than the lease that has actually been "frozen". If the frozen rent is greater than the applicable upper rent limitation (see rent table), the system might only be let at the statutory rent limitation. If needed, surcharges for contemporary amenities and modernisation procedures can be considered in the rent ceiling. When it comes to flats whose previous lease was less than EUR 5.02 per square metre, the rent might be increased by a maximum of EUR 1 as much as EUR 5.02 per square metre upon re-letting if modern amenities are available. Modern facilities exists if the living space has at least 3 of the five following qualities:

- Passenger lift, available without limits from the flat and from the structure entryway

• Fitted kitchen area
• High-quality sanitary equipment
• High-quality floor covering in the majority of spaces
• Energy usage worth of less than 120 kWh/( m TWO a)
  
  When is a rent thought about excessive and when can it be minimized?
  
  A rent is thought about excessive and is for that reason prohibited if it is more than 20% above the pertinent upper rent limitation in the lease table, taking into consideration the property place.
  
  Appropriate additional charges and reductions are also suitable:
  
  - Flats in a simple suburb -0.28 euros
• Flats in a medium property location -0.09 euros
• Flats in a great house +0.74 euros
  
  Are modernisations still possible? To what level can they be assigned to the rent?
  
  Certain modernisation measures and their apportionment to the lease are allowed as much as an optimum of EUR 1.00 per square metre. This limitation also uses in case of numerous modernisations during the law's credibility duration. The requirement is that property owners inform the Investitionsbank Berlin (IBB) of increased rent based upon modernisation steps. The IBB is providing an online notice treatment. You can send a modernisation notice here.
  
  Please note that when re-letting residential area after an apportionable modernisation, the five modern amenity criteria pointed out above might not be in addition allocated (in order to prevent an increase of the upper rent limitation by approximately 2 euros/sq. m).
  
  Which modernisations are allowed?
  
  Apportionable modernisation procedures are those to which landlords are required by law:
  
  - For thermal insulation of the building envelope, basement ceiling, top flooring ceiling or roofing
• For using renewable resources
• For energy-efficient window replacement
• For heating unit replacement with heating optimisation
• For the addition of a lift
• For the elimination of barriers through threshold elimination, door widening or bathroom conversion
  
  What choices do I have as a residential or commercial property owner if the allowable lease leads to losses or to a hazard to the building structure in the long term?
  
  In extraordinary cases, the IBB can authorize a greater allowable lease. The prerequisite is the presence of excessive financial hardship. This is particularly relevant if maintaining the acceptable rent would lead to irreversible losses for the property owner or threaten the building structure over the long term.
  
  A loss is considered to exist if existing expenditures exceed income for the appropriate company entity. A hazard to the building structure exists if the income from the residential or commercial property is no longer adequate for its upkeep.
  
  It needs to be kept in mind that financial challenge can only be thought about if the difficulty is caused by the rent cap law. Undue financial challenge is also just valid if its event does not lie within the sphere of obligation of the landlord. Simply put, expectations of gratitude in worth, expected returns, rising funding expenses outside regular market conditions, anticipated returns based upon extreme rents and losses arising from the division into service entities do not make up a case of challenge.
  
  You can submit a challenge application to the IBB here.
  
  What information obligations do I have as a property manager?
  
  Landlords should supply tenants with details on the circumstances relevant to the computation of the rent ceiling within 2 months after the law coming into force and also before the conclusion of a new rental contract, without being requested to do so. Landlords must inform occupants of the quantity of the essential date lease on 18 June 2019 upon demand. Prior to the finalizing of a new lease, landlords should inform future renters of both without being asked.
  
  You can find details of the details obligations under the rent cost cap in our list for residential or commercial property owners and landlords.
  
  How are infractions penalized?
  
  A fine of up to 500,000 euros might be imposed for violations of the rent price cap.
  
  Where can I find additional details?
  
  At www.engelvoelkers.com/mietendeckelberlin you can discover routine updates on the lease rate cap.
  
  Do you have further questions?
  
  We would enjoy to recommend you! More than 50 realty experts for the Berlin residential and commercial residential or commercial property market are available to you for additional info at any time in individual, by telephone or by e-mail.
  
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  Everything about the Berlin rent cost cap:
  
  This means the rent price cap
  
  Rent rate cap calculator
  
  Obligations for property owners
  
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