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

For which flats does the lease cap apply?

Rent cap guidelines apply to non-public housing. Excluded from the guidelines are openly subsidised housing, social welfare flats, flats in halls of house and recently constructed flats that were first prepared for occupancy on 1 January 2014 or that have been restored for domestic functions from uninhabitable and vacant previous home that was converted at an expense commensurate with a brand-new building.

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

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

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

In rental agreements in which no net base lease has actually been concurred, the property owner must, if needed to do so and at the request of the proficient authorities, provide occupants with the accurate net base rent quantity together with the information utilized for the computation basis.

For how long is the rent cap valid?

Can I still increase the rent 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 into force, the baseline for a is the rent that was reliable on the crucial date.

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

If the flat was not leased on the essential date of 18 June 2019 or if a renter change has actually happened between the essential date and the effective date of the law, the lease agreed to during this duration will be "frozen".

Just how much rent can I charge as a landlord? In order to identify the upper rent limits, the rents listed in the 2013 Berlin Rent Index were upgraded to reflect real wage development till 2019. The upper lease limitations 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 features, the upper limit is increased by 1 euro. Relevant here are just those amenities offered by the landlord. According to the law's lease table, modern facilities exists if the home has at least 3 of the five following attributes:

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

You can find detailed definitions of the 5 modern-day feature requirements, as specified by the Senate Department for Urban Development and Housing rent cap implementation policies, in our list for owners and property owners.

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

If the residential unit is re-let after the law enters into force, the law restricts taking a higher rent than the rent that has actually been "frozen". If the frozen rent is higher than the applicable upper rent limit (see rent table), the system might only be let at the statutory lease limitation. If required, surcharges for contemporary facilities and modernisation procedures can be taken into account in the lease ceiling. When it comes to flats whose previous rent was less than EUR 5.02 per square metre, the rent may be increased by an optimum of EUR 1 approximately EUR 5.02 per square metre upon re-letting if contemporary facilities are offered. Modern facilities exists if the living area has at least 3 of the 5 following attributes:

- Passenger lift, available without thresholds from the flat and from the structure entrance

• Fitted cooking area
• High-quality sanitary equipment
• High-quality flooring in the majority of spaces
• Energy consumption value of less than 120 kWh/( m TWO a)
  
  When is a lease considered excessive and when can it be decreased?
  
  A lease is considered extreme and is for that reason prohibited if it is more than 20% above the relevant upper rent limitation in the lease table, taking into account the domestic location.
  
  Appropriate additional charges and reductions are likewise applicable:
  
  - Flats in an easy suburb -0.28 euros
• Flats in a medium suburb -0.09 euros
• Flats in a great house +0.74 euros
  
  Are modernisations still possible? To what extent can they be assigned to the rent?
  
  Certain modernisation procedures and their apportionment to the lease are permitted approximately an optimum of EUR 1.00 per square metre. This limit likewise applies in case of multiple modernisations during the law's credibility duration. The prerequisite is that proprietors alert the Investitionsbank Berlin (IBB) of increased lease based upon modernisation steps. The IBB is offering an online alert procedure. You can submit a modernisation alert 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 allocated (in order to avoid an increase of the upper rent limit by up to 2 euros/sq. m).
  
  Which modernisations are permitted?
  
  Apportionable modernisation steps are those to which proprietors are obliged by law:
  
  - For thermal insulation of the structure envelope, basement ceiling, top flooring ceiling or roofing system
• For using renewable resources
• For energy-efficient window replacement
• For heating system replacement with heating optimisation
• For the addition of a lift
• For the elimination of barriers through threshold removal, door widening or restroom conversion
  
  What alternatives do I have as a residential or commercial property owner if the allowable rent results in losses or to a hazard to the building structure in the long term?
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  In exceptional cases, the IBB can approve a greater permissible rent. The prerequisite is the presence of excessive economic challenge. This is especially relevant if maintaining the permissible lease would lead to irreversible losses for the property manager or threaten the building structure over the long term.
  
  A loss is considered to exist if existing costs go beyond earnings for the pertinent business entity. A threat to the building structure exists if the earnings from the residential or commercial property is no longer enough for its maintenance.
  
  It must be kept in mind that economic challenge can only be thought about if the difficulty is triggered by the lease cap law. Undue economic challenge is likewise only legitimate if its occurrence does not lie within the sphere of responsibility of the proprietor. To put it simply, expectations of appreciation in value, expected returns, increasing financing costs outside regular market conditions, anticipated returns based upon excessive leas and losses arising from the division into service entities do not constitute a case of challenge.
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  You can submit a difficulty application to the IBB here.
  
  What details commitments do I have as a proprietor?
  
  Landlords need to provide renters with information on the scenarios pertinent to the estimation of the rent ceiling within 2 months after the law entering into force and likewise before the conclusion of a new rental contract, without being requested to do so. Landlords should notify renters of the amount of the essential date lease on 18 June 2019 upon demand. Prior to the signing of a new lease, property managers need to inform future tenants of both without being asked.
  
  You can find information of the info responsibilities under the rent price cap in our list for residential or commercial property owners and proprietors.
  
  How are infractions penalized?
  
  A fine of approximately 500,000 euros may be enforced for infractions of the lease cost cap.
  
  Where can I discover more information?
  
  At www.engelvoelkers.com/mietendeckelberlin you can discover regular updates on the rent price cap.
  
  Do you have further questions?
  
  We would more than happy to recommend you! More than 50 real estate specialists for the Berlin domestic and business residential or commercial property market are offered to you for further details at any time face to face, by telephone or by email.
  
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  Everything about the Berlin rent rate cap:
  
  This suggests the rent cost cap
  
  Rent rate cap calculator
  
  Obligations for landlords
  
  Disclaimer: This short article is meant exclusively as basic, non-binding info and ought to not change comprehensive research study or professional recommendations. Although this short article has actually been prepared with the greatest possible care, there is no claim to factual precision, efficiency and/or topicality. The particular circumstances of the private case should constantly be considered. Making use of info consisted of in this article is the sole duty of the particular reader. Any liability on the part of Engel & Völkers Gewerbe Berlin GmbH & Co. KG and/or another Engel & Völkers licensee is excluded.
  
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