Unofficial Free English Translation of the Rent Cap / Rent Freeze "Mietendeckel" Law as Published

This document is an unofficial translation of the Berlin Rent Cap / Rent Freeze Law known by the name “Mietendeckel” and it’s official title

Gesetz zur Neuregelung gesetzlicher Vorschriften zur Mietenbegrenzung 

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

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Unofficial Free English Translation of the Rent Cap / Rent Freeze "Mietendeckel" Law as Published

The Berlin Rent Cap, Rent Freeze, Mietendeckel Will Come Into Force On 23.02.2020

The Berlin City Government has worked over-time to ensure that there will be no rentals next weekend under the old legal conditions. The office for Urban Development has announce that the Rent Act "Mietendeckel" will be published in the Journal of Laws and Ordinances for the State of Berlin on 22.02.2020 and thus will come into force on the next day,

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.

via GIPHY
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

22.02.2025 

If 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.

Don't miss the opportunity.

The Berlin Rent Cap, Rent Freeze, Mietendeckel Will Come Into Force On 23.02.2020

Mietendeckel: Should There Be A Reserve Clause In Rental Contracts After The Rent Cap - Rent Freeze Goes Into Effect?

The Mietendeckel Rent Act was challenged since the vote in the Berlin City Parliament (Abgeordnetenhaus) on January 30, 2020. On one side for formal constitutional grounds, the federal government is stating that the act passed is not within the competence of any state but a federal domaine and therefore will challenge it at the federal constitutional court in Karlsruhe. On the other side, it is challenged on its content supposedly being unconstitutional. This could also be filed at the Berlin constitutional court. Various property owners and associations are lined up.
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:

1. An adjustment clause which becomes effective for the moment the Rent Act is ruled unconstitutional;
2. 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.

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Mietendeckel: Should There Be A Reserve Clause In Rental Contracts After The Rent Cap - Rent Freeze Goes Into Effect?