Find out what the law indicates for Berlin residential or commercial property owners and property owners in our FAQ.
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For which flats does the rent cap apply?
Rent cap regulations use to non-public housing. Excluded from the regulations are publicly subsidised housing, social welfare flats, flats in halls of house and recently developed flats that were first all set for tenancy on 1 January 2014 or that have actually been brought back for property functions from uninhabitable and unoccupied former living area that was converted at a cost commensurate with a new structure.
Commercial space that has actually been transformed and rededicated as living space at considerable cost is also excluded 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 rent on the reliable date, but the last lease agreed in the dedication duration that is to be used as the basis.
The law states "lease in accordance with the rent cap" - what does that suggest?
According to Art. 3 (4 ), lease in accordance with the rent cap means the net base rent (not including running costs and utility costs for heating and hot water), however including all additional charges for furniture and furnishings.
In rental arrangements in which no net base rent has been concurred, the landlord must, if needed to do so and at the demand of the proficient authorities, supply renters with the precise net base rent quantity along with the information used for the calculation basis.
For how long is the lease cap valid?
Can I still increase the rent now?
The key date for the "freezing" of the lease is the date of the Senate resolution on 18 June 2019, i.e. after the law enters force, the baseline for a re-letting is the lease that worked on the essential date.
In principle, the very same level of rent can be concurred with the next renter. However, this is just acceptable 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 renter change has happened between the crucial date and the effective date of the law, the rent consented to during this duration will be "frozen".
Just how much rent can I charge as a landlord? In order to figure out the upper lease limitations, the rents noted in the 2013 Berlin Rent Index were upgraded to reflect real wage development up until 2019. The upper lease limitations are stemmed from the table in the rent cap law and are finished according to constructing age classes and amenities. Surcharges are also permitted. For flats with modern features, the upper limitation is increased by 1 euro. Relevant here are just those features provided by the proprietor. According to the law's rent table, contemporary facilities exists if the living area has at least three of the five following characteristics:
The rent ceiling is also increased by a surcharge of 10% if the domestic area is situated in a structure without any more than 2 flats. So for the estimation of the acceptable rent: rent ceiling according to the lease table + surcharges listed above.
You can discover detailed meanings of the five modern-day facility criteria, as stipulated by the Senate Department for Urban Development and Housing rent cap execution regulations, in our checklist for owners and proprietors.
How much lease can I charge if I re-let the unit?
If the property unit is re-let after the law enters into force, the law forbids taking a higher lease than the rent that has been "frozen". If the frozen rent is greater than the applicable upper lease limitation (see rent table), the unit might only be let at the statutory lease limit. If needed, additional charges for contemporary features and modernisation steps can be taken into account in the rent ceiling. When it comes to flats whose previous lease was less than EUR 5.02 per square metre, the rent may be increased by a maximum of EUR 1 up to EUR 5.02 per square metre upon re-letting if modern-day features are offered. Modern amenities exists if the living area has at least three of the five following characteristics:
- Passenger lift, available without thresholds from the flat and from the building entrance
- Fitted kitchen
- High-quality sanitary devices
- High-quality flooring in the majority of rooms
- Energy intake worth of less than 120 kWh/( m TWO a)
When is a rent thought about excessive and when can it be lowered?
A rent is considered excessive and is for that reason restricted if it is more than 20% above the relevant upper rent limit in the lease table, considering the property location.
Appropriate additional charges and reductions are likewise suitable:
- Flats in a simple house -0.28 euros - Flats in a medium house -0.09 euros
- Flats in an excellent house +0.74 euros
Are modernisations still possible? To what extent can they be allocated to the lease?
Certain modernisation steps and their apportionment to the rent are allowed up to a maximum of EUR 1.00 per square metre. This limitation likewise applies in the occasion of several modernisations during the law's credibility duration. The requirement is that property owners alert the Investitionsbank Berlin (IBB) of increased rent based upon modernisation measures. The IBB is using an online notification treatment. You can submit a modernisation alert here.
Please note that when re-letting residential area after an apportionable modernisation, the 5 modern feature requirements pointed out above may not be in addition allocated (in order to prevent an increase of the upper rent limit by approximately 2 euros/sq. m).
Which modernisations are permitted?
Apportionable modernisation procedures are those to which property owners are required by law:
- For thermal insulation of the building envelope, basement ceiling, leading floor ceiling or roofing - For the usage of sustainable energies
- For energy-efficient window replacement
- For heating system replacement with heating optimisation
- For the addition of a lift
- For the removal of barriers through limit removal, door widening or restroom conversion
What options do I have as a residential or commercial property owner if the permissible lease causes losses or to a danger to the building structure in the long term?
In exceptional cases, the IBB can authorize a greater allowable rent. The requirement is the existence of unnecessary economic challenge. This is especially relevant if keeping the allowable lease would cause irreversible losses for the property owner or endanger the building structure over the long term.
A loss is deemed to exist if present expenditures surpass earnings for the appropriate business entity. A threat 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 economic hardship can just be considered if the challenge is triggered by the lease cap law. Undue economic challenge is also just valid if its event does not lie within the sphere of responsibility of the property owner. To put it simply, expectations of gratitude in worth, anticipated returns, rising funding costs outside routine market conditions, expected returns based on extreme leas and losses resulting from the department into service entities do not constitute a case of challenge.
You can send a hardship application to the IBB here.
What information obligations do I have as a property owner?
Landlords should supply renters with info on the circumstances appropriate to the computation of the lease ceiling within 2 months after the law entering force and also before the conclusion of a new rental agreement, without being asked for 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 finalizing of a brand-new lease, property owners need to inform future occupants of both without being asked.
You can discover information of the details responsibilities under the rent price cap in our checklist for residential or commercial property owners and proprietors.
How are offenses punished?
A fine of as much as 500,000 euros might be imposed for infractions of the rent rate cap.
Where can I find more information?
At www.engelvoelkers.com/mietendeckelberlin you can find routine updates on the rent price cap.
Do you have further concerns?
We would enjoy to recommend you! More than 50 real estate experts for the Berlin domestic and commercial residential or commercial property market are readily available to you for further information at any time personally, by telephone or by email.
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Everything about the Berlin rent rate cap:
This implies the rent price cap
Rent price cap calculator
Obligations for property managers
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