Learn what the law means for Berlin residential or commercial property owners and property owners in our FAQ.
For which flats does the rent cap apply?
Rent cap regulations apply to non-public housing. Excluded from the guidelines are publicly subsidised housing, social well-being flats, flats in halls of residence and newly constructed flats that were first all set for tenancy on 1 January 2014 or that have been brought back for residential functions from uninhabitable and empty former living area that was converted at an expense commensurate with a new building.
Commercial area that has been converted and rededicated as living area at significant expenditure is also excluded from the lease cap.
The lease cap uses 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 commitment duration that is to be used as the basis.
The law says "rent in accordance with the rent cap" - what does that suggest?
According to Art. 3 (4 ), rent in accordance with the lease cap implies the net base rent (not consisting of running expenses and utility expenses for heating and warm water), but consisting of all surcharges for furniture and home furnishings.
In rental contracts in which no net base lease has actually been concurred, the proprietor must, if required to do so and at the request of the qualified authorities, provide tenants with the accurate net base rent amount in addition to the information used for the computation basis.
How long is the lease cap legitimate?
Can I still increase the lease now?
The essential date for the "freezing" of the rent is the date of the Senate resolution on 18 June 2019, i.e. after the law comes into force, the standard for a re-letting is the lease that worked on the essential date.
In principle, the very same level of lease can be concurred with the next renter. However, this is just acceptable if it does not go beyond the upper rent limits under Art. 5 MietenWoG.
If the flat was not leased on the crucial date of 18 June 2019 or if a renter change has occurred in between the crucial date and the efficient date of the law, the rent consented to throughout this period will be "frozen".
How much rent can I charge as a proprietor? In order to determine the upper rent limitations, the leas listed in the 2013 Berlin Rent Index were updated to show genuine wage advancement up until 2019. The upper rent limits are originated from the table in the rent cap law and are graduated according to constructing age classes and facilities. Surcharges are likewise permitted. For flats with contemporary features, the ceiling is increased by 1 euro. Relevant here are just those facilities provided by the property manager. According to the law's rent table, contemporary amenities 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 residential area is situated in a building with no more than 2 flats. So for the calculation of the acceptable lease: rent ceiling according to the lease table + surcharges listed above.
You can discover in-depth definitions of the 5 modern feature criteria, as specified by the Senate Department for Urban Development and Housing rent cap execution policies, in our checklist for owners and landlords.
Just how much rent can I charge if I re-let the system?
If the residential unit is re-let after the law enters force, the law prohibits taking a higher lease than the lease that has been "frozen". If the frozen rent is greater than the relevant upper rent limitation (see lease table), the system may just be let at the statutory rent limit. If required, surcharges for modern-day features and modernisation measures can be taken into account in the rent ceiling. In the case of flats whose previous rent was less than EUR 5.02 per square metre, the lease may be increased by an optimum of EUR 1 up to EUR 5.02 per square metre upon re-letting if contemporary facilities are available. Modern features exists if the living space has at least 3 of the five following characteristics:
- Passenger lift, available without thresholds from the flat and from the structure entryway
- Fitted kitchen
- High-quality hygienic devices
- High-quality flooring in the bulk of spaces
- Energy consumption value of less than 120 kWh/( m ² a)
When is a lease considered extreme and when can it be minimized?
A lease is considered excessive and is for that reason restricted if it is more than 20% above the relevant upper lease limitation in the lease table, taking into account the property place.
Appropriate additional charges and reductions are also applicable:
- Flats in a simple suburb -0.28 euros - Flats in a medium suburb -0.09 euros - Flats in an excellent domestic location +0.74 euros
Are modernisations still possible? To what extent can they be apportioned to the lease?
Certain modernisation steps and their apportionment to the rent are permitted up to a maximum of EUR 1.00 per square metre. This limit also uses in the occasion of numerous modernisations during the law's credibility duration. The requirement is that property owners notify the Investitionsbank Berlin (IBB) of increased rent based upon modernisation steps. The IBB is providing an online notification treatment. You can send a modernisation notice here.
Please note that when re-letting residential area after an apportionable modernisation, the five modern amenity requirements pointed out above might not be in addition allocated (in order to prevent a boost of the upper rent limitation by as much as 2 euros/sq. m).
Which modernisations are allowed?
Apportionable modernisation procedures are those to which property owners are required by law:
- For thermal insulation of the building envelope, basement ceiling, top flooring ceiling or roof - For using eco-friendly 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 threshold removal, door widening or bathroom conversion
What choices do I have as a residential or commercial property owner if the acceptable rent causes losses or to a risk to the building structure in the long term?
In remarkable cases, the IBB can authorize a greater permissible rent. The prerequisite is the existence of undue economic challenge. This is particularly pertinent if keeping the acceptable lease would cause long-term losses for the owner or endanger the building structure over the long term.
A loss is deemed to exist if current expenses go beyond income for the relevant service entity. A risk to the building structure exists if the income from the residential or commercial property is no longer sufficient for its maintenance.
It needs to be noted that financial difficulty can only be considered if the challenge is triggered by the lease cap law. Undue economic hardship is likewise only valid if its incident does not lie within the sphere of duty of the property owner. In other words, expectations of gratitude in value, expected returns, increasing funding expenses outside regular market conditions, anticipated returns based on excessive leas and losses arising from the department into company entities do not make up a case of difficulty.
You can send a challenge application to the IBB here.
What information commitments do I have as a property manager?
Landlords need to offer renters with information on the scenarios appropriate to the computation of the rent ceiling within 2 months after the law coming into force and also before the conclusion of a new rental agreement, without being asked for to do so. Landlords should inform renters of the amount of the crucial date rent on 18 June 2019 upon request. Prior to the signing of a new lease, property managers need to inform future occupants of both without being asked.
You can discover information of the information responsibilities under the lease price cap in our list for residential or commercial property owners and proprietors.
How are offenses penalized?
A fine of as much as 500,000 euros may be enforced for violations of the rent rate cap.
Where can I find more info?
At www.engelvoelkers.com/mietendeckelberlin you can discover regular updates on the rent rate cap.
Do you have further concerns?
We would be happy to encourage you! More than 50 realty professionals for the Berlin property and commercial residential or commercial property market are offered to you for more information at any time face to face, by telephone or by email.
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Everything about the Berlin rent price cap:
This means the lease price cap
Rent cost cap calculator
Obligations for landlords
Disclaimer: This short article is planned solely as general, non-binding details and ought to not replace detailed research study or professional recommendations. Although this post has been prepared with the best possible care, there is no claim to factual precision, efficiency and/or topicality. The specific situations of the individual case should constantly be thought about. Making use of details included in this post is the sole obligation of the respective reader. Any liability on the part of Engel & Völkers Gewerbe Berlin GmbH & Co. KG and/or another Engel & Völkers licensee is omitted.
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