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

For which flats does the rent cap use?

Rent cap policies apply to non-public housing. Excluded from the regulations are publicly subsidised housing, social well-being flats, flats in halls of residence and newly built flats that were first all set for tenancy on 1 January 2014 or that have actually been restored for residential functions from uninhabitable and empty previous home that was transformed at a cost commensurate with a new structure.

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

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

According to Art. 3 (4 ), rent in accordance with the rent cap implies the net base rent (not consisting of running costs and utility costs for heating and hot water), however including all additional charges for furnishings and furnishings.

In rental agreements in which no net base lease has been agreed, the landlord must, if required to do so and at the demand of the qualified authorities, offer occupants with the precise net base rent amount along with the information used for the estimation basis.

How long is the lease cap valid?

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 force, the standard for a re-letting is the rent that was efficient on the essential date.

In concept, the exact same level of rent can be agreed with the next renter. However, this is only acceptable if it does not surpass the upper rent limitations 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 essential date and the reliable date of the law, the rent accepted throughout this period will be "frozen".
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How much rent can I charge as a landlord? In order to identify the upper rent limits, the leas listed in the 2013 Berlin Rent Index were updated to show real wage advancement until 2019. The upper rent limits are originated from the table in the lease cap law and are graduated according to developing age classes and facilities. Surcharges are likewise permitted. For flats with modern-day amenities, the ceiling is increased by 1 euro. Relevant here are just those amenities offered by the property owner. According to the law's rent table, contemporary facilities exists if the living space has at least three of the 5 following qualities:

The lease ceiling is also increased by an additional charge of 10% if the residential space is located in a building without any more than two flats. So for the calculation of the allowable rent: lease ceiling according to the rent table + surcharges noted above.

You can find in-depth definitions of the five contemporary feature requirements, as specified by the Senate Department for Urban Development and Housing lease cap implementation guidelines, in our list for owners and property owners.

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

If the residential unit is re-let after the law enters into force, the law prohibits taking a higher lease than the rent that has actually been "frozen". If the frozen rent is higher than the applicable upper rent limit (see lease table), the system might only be let at the statutory lease limitation. If required, additional charges for modern features and modernisation procedures 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 lease might be increased by an optimum of EUR 1 as much as EUR 5.02 per square metre upon re-letting if contemporary facilities are available. Modern facilities exists if the home has at least 3 of the five following attributes:

- Passenger lift, accessible without thresholds from the flat and from the building entryway

• Fitted kitchen
• High-quality sanitary equipment
• High-quality flooring in the majority of rooms
• Energy intake value of less than 120 kWh/( m ² a)
  
  When is a lease considered excessive and when can it be minimized?
  
  A lease is considered excessive and is for that reason restricted if it is more than 20% above the relevant upper lease limitation in the lease table, considering the residential location.
  
  Appropriate additional charges and deductions are likewise suitable:
  
  - Flats in a basic house -0.28 euros
• Flats in a medium residential location -0.09 euros
• Flats in a good property area +0.74 euros
  
  Are modernisations still possible? To what degree can they be allocated to the rent?
  
  Certain modernisation steps and their apportionment to the lease are allowed approximately a maximum of EUR 1.00 per square metre. This limitation likewise uses in case of numerous modernisations during the law's credibility duration. The requirement is that proprietors notify the Investitionsbank Berlin (IBB) of increased rent based upon modernisation measures. The IBB is offering an online alert treatment. You can send a modernisation notice here.
  
  Please note that when re-letting domestic area after an apportionable modernisation, the five contemporary amenity criteria pointed out above may not be additionally allocated (in order to prevent a boost of the upper lease limit by approximately 2 euros/sq. m).
  
  Which modernisations are allowed?
  
  Apportionable modernisation steps are those to which property owners are obliged by law:
  
  - For thermal insulation of the structure envelope, basement ceiling, leading floor ceiling or roofing system
• For using renewable resources
• 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 bathroom conversion
  
  What alternatives do I have as a residential or owner if the allowable rent results in losses or to a hazard to the building structure in the long term?
  
  In remarkable cases, the IBB can approve a higher permissible lease. The requirement is the presence of undue economic challenge. This is especially relevant if maintaining the allowable lease would cause long-term losses for the proprietor or threaten the building structure over the long term.
  
  A loss is deemed to exist if current expenses exceed earnings for the relevant business entity. A hazard to the building structure exists if the earnings from the residential or commercial property is no longer enough for its upkeep.
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  It should be noted that financial challenge can only be thought about if the difficulty is caused by the lease cap law. Undue economic hardship is likewise just valid if its occurrence does not lie within the sphere of duty of the property owner. In other words, expectations of gratitude in worth, expected returns, increasing financing expenses outside routine market conditions, anticipated returns based upon excessive leas and losses resulting from the department into company entities do not make up a case of difficulty.
  
  You can send a difficulty application to the IBB here.
  
  What details responsibilities do I have as a property manager?
  
  Landlords need to supply renters with details on the scenarios appropriate to the calculation of the rent ceiling within 2 months after the law entering into force and likewise before the conclusion of a new rental arrangement, without being asked for to do so. Landlords must inform tenants of the quantity of the crucial date lease on 18 June 2019 upon request. Prior to the finalizing of a brand-new lease, property managers should inform future renters of both without being asked.
  
  You can find information of the details responsibilities under the lease cost cap in our checklist for residential or commercial property owners and landlords.
  
  How are offenses punished?
  
  A fine of as much as 500,000 euros might be enforced for violations of the rent cost cap.
  
  Where can I find further information?
  
  At www.engelvoelkers.com/mietendeckelberlin you can discover routine updates on the lease rate cap.
  
  Do you have more concerns?
  
  We would more than happy to advise you! More than 50 real estate specialists for the Berlin property and business residential or commercial property market are available to you for further information at any time face to face, by telephone or by e-mail.
  
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  All about the Berlin lease price cap:
  
  This means the rent rate cap
  
  Rent cost cap calculator
  
  Obligations for property owners
  
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