Housing Market Report Berlin 2020 |
Friday 15 May 2020
Housing Market Report Berlin 2020
Sunday 23 February 2020
Unofficial Free English Translation of the Rent Cap / Rent Freeze "Mietendeckel" Law as Published
It was published on the Journal of Laws and Ordinances for the State of Berlin on 22 February 2020 and came into force on the following day 23 February 2019.
This date is important to keep in mind when reading the text because it makes it much easier to understand when exchanging the phrase “date of entry into force” by the actual date.
Another phrase is “the effective date” which is the date the Berlin Senate announced the plan of the “Mietendeckel” law, it is 18 June 2019. Replacing the phrase by the date again makes it easier to understand.
I wanted to stay as close to the original text as possible to not obstruct the comparison of the language versions.
This translation has no official character and is free for personal use only. It does not constitute by any means legal advice in any form. The purpose is for non-German speakers to get an understanding of the content of the law and draw conclusions regarding actions to be taken and questions to be asked.
There is a tight timeline and most of the actions have to be taken as an initiative by the landlord. The first action is due by 23 April and the next one 23 November 2020.x
You're welcome to try Google-Translate ...,
Unofficial Free English Translation of the Rent Cap / Rent Freeze "Mietendeckel" Law as Published
Posted by Uwe at 18:00 0 comments
Labels: Berlin housing market, berlin rental market, intelligentproperty, Mietendeckel, Mietpreisbremse, rent act, rent cap, rent freeze, rent level, rent table, Rental Market
Tuesday 18 February 2020
The Berlin Rent Cap, Rent Freeze, Mietendeckel Will Come Into Force On 23.02.2020
23. February 2020.It will apply retroactively to the status quo as of 18. June 2019 when the Berlin Senate approved the key elements of a new Berlin law on residential rents, including the so-called "Mietendeckel", a combination of rent freeze and rent cap as its main features.
There is a line of dates to keep in mind and take action upon:
31.12.2013
01.01.2014
18.06.2019
23.02.2020
23.04.2020 Your next action date.
23.11.2020
22.02.2025If you are a landlord in Berlin, owning a rental apartment older than 01.01.2014 you should be setting up your timeline, project plan and checklist to avoid trouble. In many cases you could actually get fined accepting a rent at more than 120 % of the table applicable to your property. The maximum is set at Euro 500,000.
We have installed a Newsletter for landlords affected by the "Mietendeckel" for support with these tools for their apartments.
Here is the opportunity for signing up to this "Mietendeckel" Newsletter.
The Berlin Rent Cap, Rent Freeze, Mietendeckel Will Come Into Force On 23.02.2020
Posted by Uwe at 17:03 0 comments
Labels: Berlin, berlin rental market, cap table, Housing Market, intelligentproperty, Mietendeckel, rent act, rent cap, rent freeze, rent level
Sunday 16 February 2020
Mietendeckel: Should There Be A Reserve Clause In Rental Contracts After The Rent Cap - Rent Freeze Goes Into Effect?
The first attempt for an injunction has already been rejected by the federal constitutional court because it was too early out of the stable as the parliamentary process is not completed yet and in theory, changes could still be made in a third reading – which is not planned.
But I don’t want to bore you with the legal discussion.
The main issue at this point:
What should I write into my rental contracts, until there is clarity on the constitutionality of the Rent Act?Bild von Andreas Breitling pixabay.com |
The Rent Act will enter into force in the near future and any landlord will have to stick to the limits set in its various clauses otherwise risking a lawsuit with the new tenant and fines from the authorities.
As an example let’s say that going by the old rules you could rent your apartment for 1,600 EURO and going by the new rules you have to rent it for 1,300. Should the Rent Act be deemed unconstitutional, you have a valid contract at 1.300 and there is no way the Berlin Senate is going to pass a law stating that this is unfair and the tenant has to accept the contract to be raised to 1,600 – right? So what can be done? You don’t know how long the legal clarification is going to take, at best the case will be heard at the beginning of next year. You don’t really want to leave the apartment empty without rent and it would be unlawful as well.
Should there be a reserve clause in new rental contracts in case the "Mietendeckel" Rent Act is deemed unconstitutional in all or in part?
By no means, the following constitutes legal advice and replaces a discussion with a solicitor which would consider all the aspects of the specific situation. That said here are some thoughts for that discussion.
For such a clause there are two differentiation:
- An adjustment clause which becomes effective for the moment the Rent Act is ruled unconstitutional;
- A retroactive clause which takes effect from the day the contract is signed and entitles the landlord to demand payments going back to the first day of the contract.
- For both, there is the question of the calculation of the security deposit (Kaution), should that be adjusted as well as it is limited to there months’ net rent?
Option one seems to be legally the safer choice as it does not stretch the interpretation of the Civil Code as much. (For a discussion with your solicitor: 558b I BGB, 558b IV BGB, 560 II 2 BGB)
Reminder: For any contracts that are signed between now and the day of the publication of the Rent Act, the rent freeze of 18 June 2019 does not apply, just keep in mind the ren cap table and the 20% it can be exceeded when signing a contract now.
As the discussion and information all around the "Mietendeckel" Rent Act will certainly continue over the next months we will provide updates and insights in the handling of the situation from the point of view of a landlord.
Here is the opportunity for you to sign up to this free newsletter:
Mietendeckel: Should There Be A Reserve Clause In Rental Contracts After The Rent Cap - Rent Freeze Goes Into Effect?
Posted by Uwe at 16:37 0 comments
Labels: cap table, contract, intelligentproperty, Mietendeckel, Mietspiegel, rent act, rent cap, rent freeze
Saturday 15 February 2020
Berlin "Mietendeckel" Is A Rent Freeze And A Rent Cap - What Happens When?
Rent Freeze
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Rent Cap
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Re-Renting
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Rent on 18 June 2019
maximum but possibly restricted by the rent cap table
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Rent Cap Table for any
contract after the publication date of the law in the Journal of Laws and
Ordinances for the State of Berlin Amtsblatt 1)
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Existing
Contracts
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Rent on 18 June 2019
maximum but possibly restricted by the rent cap table. The landlord must
actively inform the tenant about the “correct” rent defined by either the date
above of the rent cap, whichever is lower. 2)
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The rent cap requires
a rent reduction by the landlord if the current rent exceeds the rent derived
from the cap table by >20%. This action has to happen 9 months after the
publication. 3)
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2) As of 1 January 2022, the rent cap table will be subject to an annual review based on the percentage inflation determined by the Federal Statistics Office as of 31 December of the previous year but limited to 1.3%. The Senate department responsible for housing must define the relevant percentage by way of a legal order.
3) For more details about the cap table see https://germanproperties.blogspot.com/2020/01/the-berlin-rent-cap-mietendeckel-is.html
Applying the cap table and assuming the highest possible value of 9,80 €/m²/month with 0,74 € for a good location and 1,00 € bonus for top equipment and being completed between 2003 and 2013 your top rent is 11,54. Add 20% before it is deemed excessive by the "Mietendeckel" you end up at
13,85 €/m²/month. This is the Maximum!It does not matter, whether the apartment is furnished or not, if it is older than 2014 this is the maximum rent you can possibly have. There is a time-line to be observed. I will publish a separate post on this subject. One very short time-line applies to current vacancies. For details on this matter please see https://germanproperties.blogspot.com/2020/02/action-required-you-can-optimize-your.html urgently.
Here is the opportunity for you to sign up to this free newsletter:
Berlin "Mietendeckel" Is A Rent Freeze And A Rent Cap - What Happens When?
Posted by Uwe at 09:54 0 comments
Labels: apartments, Berlin, furnished apartments, intelligentproperty, Mietendeckel, property consultant, real estate consultant, rent cap, rent freeze, rent level, rent table
Thursday 13 February 2020
Action Required - You Can Optimize Your Freeze Rent in the "Mietendeckel"
If residential space is or was re-let after the effective date 18 June 2019 and the lease continues to apply upon the Rent Act taking effect, the newly agreed rent will be relevant for the rent freeze. Thus, in such cases too, a market rent may be agreed before the Rent Act takes effect without the risk of the agreement being retroactively deemed invalid and the landlord being required to return any excess rent. At the same time, the tenant may, within nine months of the law taking effect, demand that the rent be reduced to the permitted cap (see The Berlin Rent Cap - "Mietendeckel" is here. What Do You Have To Do?)
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To recap the latest main events:
The Berlin city parliament voted on Thursday, January 30, 2020, to pass the rent cap “Mietendeckel” draft into law. It will most likely come into effect at the beginning of March, possibly as early as the end of February when officially published.This will trigger numerous deadlines for actions required to be taken by the landlord.
The answer to a much asked question:
Yes it does apply to furnished apartments completed before 2014.
We are offering a newsletter, starting with a summary and interpretation of the law as it went into the parliamentary hearing. going forward, we will be providing hands-on tips on the communication and the timeline that needs to be met starting with the information needed.
Here is the opportunity for you to sign up to this free newsletter:
Action Required - You Can Optimize Your Freeze Rent in the "Mietendeckel"
Posted by Uwe at 09:08 0 comments
Labels: Berlin, Berlin housing market, Berlin Property, Berlin Real Estate, berlin rental market, Mietendeckel, rent cap, rent freeze, rent level
Sunday 9 February 2020
A Flood of Updates and Interpretations on The "Mietendeckel" Rent Cap To Be Expected
If you have not heard about it yet, you will soon from your property manager or tenant. There are already various interpretations going around and none less than the German Federal Government is planning to take the regulation to the Constitutional Court in Karlsruhe.
Sign up |
To recap the latest main events:
The Berlin city parliament voted on Thursday, January 30, 2020, to pass the rent cap “Mietendeckel” draft into law. It will most likely come into effect at the beginning of March, possibly as early as the end of February when officially published.This will trigger numerous deadlines for actions required to be taken by the landlord.
The answer to a much asked question:
Yes it does apply to furnished apartments completed before 2014.
We are offering a newsletter, starting with a summary and interpretation of the law as it went into the parliamentary hearing. going forward, we will be providing hands-on tips on the communication and the timeline that needs to be met starting with the information needed.
Here is the opportunity for you to sign up to this free newsletter:
A Flood of Updates and Interpretations on The "Mietendeckel" Rent Cap To Be Expected
Posted by Uwe at 15:59 0 comments
Labels: Berlin, berlin rental market, buy to let, Mietendeckel, rent, rent cap, rent freeze, rent level, Residential Property
Wednesday 5 February 2020
Berlin Extends the Restriction on Title Splits, Division into Condos, For Another Five Years
Soziale Erhaltungsgebiete Berlin, Stand 30.06.2019 |
Legal Background
The Good News
However, there are 6 exceptions where the district office cannot deny the permit for the title split. They are listed in Section 172 (4) of the Building Code. Statistics on this matter show, that amongst the reasons, that were listed by the owner in the application for a conversion permit between March 14th, 2015 and June 30th, 2019, 92.7% of the 15,773 apartments an application for a conversion was made was based on the “voluntary commitment of the owner - sale only to tenants for a period of seven years” (sentence 3 No. 6).Depending on the intentions of the owner or buyer, this can be an acceptable limitation.
Berlin Extends the Restriction on Title Splits, Division into Condos, For Another Five Years
Posted by Uwe at 19:14 0 comments
Labels: Berlin, condo, Erhaltungsgebiet, Milieuschutz, Milieuschutzgebiet, residential real estate, social conservation, statement of partition, title split, Umwandlungsverordnung
Saturday 1 February 2020
Berlin Rent Cap - Mietendeckel - Actions Required Before The End of February
It applies only to apartments completed before 2014! New property developments are not touched by this law.
- A rent freeze
- A rent reduction, where applicable
- A tenant rent refund
We assume that most of the discussions will initially be with tenants who received a rent increase after the cut-off date of June 18, 2019. Once the law comes into force, it can be checked whether there are any claims for recovery of the increased rent. Incidentally, this also applies to graduated rents (Staffelmiete) that have increased during this period.
The law stipulates that tenants can only request a reduction in rent nine months after the law comes into force. Any claims must be made by the tenants directly, the district offices (Bezirksamt) however may continue to take all measures necessary to enforce the law. This includes, for example, providing tenants with information about the legally permissible rent for their apartment.
However, landlords who have signed a new lease after the cut-off date and before the law comes into effect (end of February or beginning of March) can rest easy. According to a recent clarification in the draft law, this new contract rent will stand. Simple reimbursement of rent that has been paid too much is not owed.
Any rental contract signed between now and the date the law goes into effect is your “freeze rent”. However, the following also applies here: If the rent is inadmissibly high (more the 20% above the rent cap "Mietendeckel" table), a reduction can be requested under the terms of the new legislation.
Actions to take:
Get as many rentals of vacant apartments done by the end of February as possible, but keep in mind the 20% rent cap. More on this specific aspect coming up.This is a time critical issue, we can provide support in setting up your action plan and its execution. Contact us via the email address on the right.
Berlin Rent Cap - Mietendeckel - Actions Required Before The End of February
Posted by Uwe at 09:58 0 comments
Labels: Berlin, Berlin housing market, berlin rental market, intelligentproperty, Mietendeckel, Mietspiegel, rent cap, rent freeze, rent level, rent table
Thursday 30 January 2020
The Berlin Rent Cap - "Mietendeckel" is here. What Do You Have To Do?
Then, nine months later stage two, the most controversial section of the law follows with a rule that has never existed before: The Senate has established a rent table with prices that are based on the age group and fit out standard.
There are also surcharges: one euro for "modern equipment", for example with a fitted kitchen and high-quality flooring, and "location surcharges", a maximum of 0.74 euros per square meter in good locations. Including these surcharges, the absolute maximum price of a net rent in Berlin for a period of five years will be 11.54 euros - in this case for houses built between 2003 and 2013.
When the rent is 20% or more above the applicable table value the landlord has to take the initiative to reduce it.
What to do next?
If your property was completed 2014 or later - have a cup of tea and watch.If your property is older, there are several things you have to comply with and they all require the landlord to become active or risk fines.
This is the magic date of the rent freeze. When you are renting now, you are not allowed to exceed the rent of your property on that day. You are not even allowed to accept more if the tenant offers it (which is not unlikely in the current market situation). You would ave a long term legal risk because it is illegal.
Most likely in October 2020 you have to actively adjust your rent according to the table above with bonuses and reductions based on standard (e.g. fitted kitchen) or location, much like the rent table process already applied.
In a new post coming up we will explain in detail which steps a landlord in Berlin with residential apartments older than 2014 will have to take.
If you don't want to miss the updates, subscribe to this blog here on the right of the page.
The Berlin Rent Cap - "Mietendeckel" is here. What Do You Have To Do?
Posted by Uwe at 10:45 0 comments
Labels: Berlin, intelligentproperty, Mietendeckel, rent cap, rent freeze, rent table, residential
Saturday 4 January 2020
Co-living - Currently One of the Most Promising Ways to Invest in Property
Purchase a Property for Co-living.
Photo by Aw Creative on Unsplash |
"It’s uncertain how large of a renter audience will be interested in this dorm-like life, but it’s gaining traction. Similar to the tiny homes, be sure to look into local zoning rules before purchasing a property." (Forbes Real Estate Council)
Co-living - Currently One of the Most Promising Ways to Invest in Property
Posted by Uwe at 10:47 0 comments
Labels: co-living, coliving, micro-living, microliving, property, Real Estate, residential