Saturday 9 January 2016

Common Errors about the "Mietpreisbremse" (rent increase control)

On 1.June 2015 a package of new regulations regarding the German Residential Market became effective. Ever since, many confusing announcements and blog posts were published. Here are the essentials. I will focus on the Berlin Housing Market as Berlin was one of the first states having made all the preparations for the new regulation to be applied to the entire city from the first day.

What is regulated by the Mietpreisbremse package?

  1. ONLY contracts signed after 1. June 2015!
    Exception: Contracts with pre-agreed increases (Staffelmiete), these are limited to a net rent of not more than 10% above the Berlin Rent Table.
  2. The cost for the renting agent cannot be asked from the tenant, unless he has specifically instructed an agent to find an apartment for him. (The one who orders a service has to pay for it).

 What does this mean for you as the landlord?

Rent Level

First of all there is no immediate action required for either old (before 1.June 2015) or new contracts. Even if the agreed rent in new contracts is more than 10% above the rent table it is up to the tenant to contest the rent level providing the reasons why the rent supposedly is too high. Until and unless this occures the rent in the signed contract is owed.

Renting Agent Commission

This item is more risky for the agent than for the landlord as it constitutes an offence for him to charge the renting commission to the tenant and will attract a fine when reported to the local authorities. Whether the landlord has to pay the commission is not part of this discussion and depends on the direct contractual relationship landlord/agent.

What does this mean for the tenant?

Rent Level 

If the new tenant feels he/she is charged over the odds, immediate action is required: Checking the rent table for location, building age and standard compared to the rental contract. Should the contract rent be more than 10% above the rent table a reprimand letter IMMEDIATELY has to be sent to the landlord or management company. Only from this point a possibly lower rent is owed, before this point the contract rent has to be paid. Legal advice is recommended.

Renting Agent Commission

Should the tenant have received a charge for the renting commission for a contract after 1. June 2015 they should make a request for refund and/or report to the local authorities ( in Berlin it would be the "Wirtschaftsamt" as part of the local council "Bezirksamt"). Legal advice is recommended.


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