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How a cryptic letter from your Berlin landlord could save hundreds in rent

If you rent an apartment in Berlin, you should have received a letter from your landlord in recent weeks. We spoke to an expert who tells us why it's the key to dropping your rent - but why you need to take certain precautions.

How a cryptic letter from your Berlin landlord could save hundreds in rent
Photo: DPA

Age of building, size of apartment, type of heating system – you might have been puzzled to discover that your landlord has a sudden interest in telling you all about the particulars of your apartment lately.

Well, they are doing so because they have been told to.

What they probably haven’t told you is why. From reading the letter you might assume it is just some good-to-know information that you can file away and never look at again.

READ ALSO: 'We're setting a clear stop sign': Berlin passes five-year rent freeze law

“All landlords have a legal duty to notify their tenants of the particulars of their apartments under the new Berlin rent cap,” Wibke Werner, deputy head of the Berlin Tenant Association, told The Local. 

“The letter gives you all the information you need to understand whether you have a right to a rent reduction,” she explains.

“You don't have to act on it now, but you should keep it along with your rental contract!” she warns. “And if you don’t understand make sure you get a German speaking friend to translate it for you.”

Overheated rental market

Rents have been going up in major German cities for the best part of the last decade, as a housing shortage has increased demand for apartments.

The federal government attempted to tackle the problem in 2015 by introducing a “rental brake” which set a limit on the the size a new contract.

But Berlin, run by a left-wing coalition, went even further, introducing the so-called “rental cap” in January, which orders landlords to reduce the rent in existing contracts and freezes rent increases for five years. 

This reduction applies if the current rent is over 20 percent higher than a level calculated by the city based on factors such as the age of the building, the district it is situated in, and the quality of its heating system.

Conservatives are angry about the legislation. They predict it will have “catastrophic impacts on the economy” and further deepen the housing crisis by putting off investment. 

The centre-right Christian Democrats (CDU) and Free Democrats are challenging the law in Germany’s highest court, arguing the Berlin government has overstepped its authority.

“Rental law is a federal responsibility,” said Free Democratic MP Marco Buschmann.

A demonstration against the rent cap. Photo: DPA

Entitled to a reduction?

If you live in a property that was built before 2014 there is a good chance that your are entitled to a rent reduction.

Thanks to the letter, finding out is very straightforward. You simply need to plug the information containing in the letter into the Mietendeckelrechner (rent cap calculator) and it will tell you what your new rent should be.

“We think that most people are going to be getting a reduction,” said Werner. “The association of landlords said recently that it will affect two thirds of the properties that they lease.”

Of particular importance to expats living in Berlin for a short time, it applies to furnished properties too.

“The old rent brake gave an exemption to furnished properties – it accepted the argument that there are more overheads for the landlord – but that isn’t the case here,” Werner says. “Regardless of whether your flat already had furnishings or not, you will be entitled to the same reduction.”

She expects that his could lead to savings of several hundred euros a month for people renting expensive furnished properties.

The same goes for people who are sub-letting.

“You can use the calculator to see whether you are entitled to a reduction and then inform the main tenant that you expect them to sink the rent,” Werner says.

There is currently no online calculator in English, although the tenants association are working on one. In the meantime you can use a translation tool in your browser.

Photo: DPA

What next?

Your landlord is obliged to reduce your rent without you doing anything. But some might ignore the law.

“Given that this is being disputed in front of the constitutional court we expect that there will be some landlords who play for time and don’t reduce the rent,” Werner says.

READ ALSO: Berlin rent freeze: 34,000 tenants paying too much for housing

If the landlord doesn’t comply, you have a couple of options. You can threatened them with legal action in a civil case or you can inform the city authorities, who will then pursue them.

Either way from November 23rd onwards you can start transferring a reduced rent to your landlord based on the amount that the Mietendeckelrechner (rent freeze calculator) calculates.

Staying on the safe side

The law's chances of actually staying on the statute books are far from guaranteed. In March, Berlin’s city court declared it unconstitutional and referred it to the constitutional court.

That has created considerable concern among tenants. Werner says that it is best to be cautious.

“Whether you signed your contract before or after the law came into effect, you should put the difference between the rent in your contract and the reduced rent to one side,” she advises.

If they law is overturned landlords might have the right to demand back payments. Should that happen, you want to be sure you have the money saved up somewhere.

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HOUSING

‘Stressed and depressed’: How Berlin’s rent cap fiasco has affected foreign tenants

Tens of thousands of people in Berlin were hit with huge rent hikes and thousands of euros in arrears when the city’s rent cap fell through. Many of those affected were foreigners. Here are some of the experiences of those affected. 

‘Stressed and depressed’: How Berlin’s rent cap fiasco has affected foreign tenants
A view of Berlin. Photo: picture alliance/dpa | Christoph Soeder

One of the most stressful things about moving to Berlin or within the city is flat-hunting. Not only is there a lack of homes, but new rental contracts are often ridiculously high – or tenants are forced to pay too much through a sub-let because they can’t get their own place.

So when the Berlin government introduced a rent cap that came into force in February 2020, residents – many of them foreigners trying to make a new life in the city – felt like they finally had access to affordable housing.

But after more than a year of reduced rent costs, Germany’s highest court announced in April that the Mietendeckel was unlawful, resulting in tens of thousands of people being plunged into debt and facing rent increases in the middle of Germany’s third wave of the pandemic.

READ ALSO: ‘Bitter setback’: What’s the reaction to Berlin’s rental cap law being scrapped?

It’s a shocking story that was covered by media around the world. But behind the headlines, real people have been suffering stress, anxiety and anger over this debacle.

We put together an online survey and 50 people – most of them non-German – shared their experiences with us.

Just under 90 percent told us their rent was rising due to the decision. A total of eight percent said their rent was going up, and two percent weren’t sure.

‘Forcing people to pay rent back payments should be illegal’

Almost everyone who got in touch with us said no-one should have to pay the rent “arrears”.

The Berlin government that brought in the rent cap pleaded with landlords to cancel the back payments. But as landlords are now legally entitled to claim back revenues, many have chosen to do this.

READ MORE: ‘Extraordinary situation’: What can you do if your Berlin landlord demands rent cap arrears?

Nick, 34, said his rent was going up by €475 per month. He isn’t sure if he has back payments yet, but if so it will cost him about €2,850.

“Forcing people to pay for previous months rent should be illegal,” said Nick. “Or at least renters should be able to spread it over a year.”

Nick said the decision is having a major impact on his life plans. “My apartment is way overpriced – now I’m thinking of moving,” he said.

Roshnan, 31, in Charlottenburg, is seeing a €200 rent increase and has to pay back €2,000. 

“The (Berlin) government should subsidise all ‘shadow rent’ and previous payments,” said Roshnan. “Sadly it (the support from the Berlin Senate) is only for people with low income. A normal earning person has to take over the burden to himself or herself.

“If I have to pay more rent as well as the shadow rent, I have no savings. Salaries in Berlin are already below average.”

READ ALSO: Berlin to offer loans and grants to tenants after rent cap defeat

Hannah, 29, in Adlershof, has to pay €800 in arrears.

“I think that for the people who are struggling most to be punished financially for a decision they didn’t make is absurd, especially in a pandemic.”

In Charlottenburg, Ankita, 27, is facing a rent hike of €230 per month and a bill of about €2,200.

“At least a strict rule of no backdated (rent) should be ordered,” she said.

Ankita said the ruling is having a big impact on her life.

“It will definitely affect us, my boyfriend is already finding it hard to search for a full time job,” she said. “With this increase and backdated (rents) we will be left with no savings and might struggle for basic livelihood at least a year.”

“It should not have happened like this,” said a 28-year-old in Schöneberg who is seeing a €400 per month rent increase.

“Everyone in Berlin is experiencing some sort of financial instability because of this in these odd times.”

Nils, 31, in Neukölln, faces a €150 per-month rent increase and €1,500 of arrears.

“I believe they should completely cancel the debt and also offer a grace period for those affected to find another place to rent,” said Nils.

“I am very disappointed. The quality of life is quite low in Berlin, with salaries being low and rents high. My friends have to pay back large amounts and they are considering moving out of Berlin, especially those who have families and need a bigger living space.”

‘Berlin has been playing games with residents’

Lots of people questioned why Berlin put a law in place that was evidently shaky in the first place. The Mietendeckel was a flagship policy of the coalition of the centre-left Social Democrats (SPD), the Greens and the far-left Linke (Left) parties.

It was challenged by MPs from Chancellor Angela Merkel’s centre-right Christian Democratic Union (CDU) and the pro-business Free Democrats, who are both in opposition in Berlin.

The federal constitutional court agreed with their argument that rent policy falls under federal law not the jurisdiction of Germany’s 16 states.

Jon in Schöneberg said his rent was increasing by €380 per month. He is unsure if he has to pay back the difference but if so he will have to fork out around €2,000.

“I am furious,” he said. “Whilst I am lucky that I have the necessary funds, my partner has not worked since the start of the pandemic so this additional rent would have supported him.

“Whilst Berlin isn’t made of money it’s the Senate’s mess and they should compensate all tenants for their inadvisable experiment. Surely legal advice in advance of the rent cap would have indicated the conflict with Basic Law?”

A Berlin resident with a sign that says ‘housing is a basic right.’ Photo: picture alliance/dpa | Daniel Reinhardt 

Linda, 30, in Friedrichshain has to pay €210 extra per month and faces a bill of back payments worth €1,150.

“I am still confused on why they enforced a law before it was approved or not,” she said. “By doing so, they have basically forced people into debt! I have never had a single debt in my life and now I owe a full salary to my landlord.”

A 44-year-old in Charlottenburg said: “The Berlin government coalition have been playing games with tenants. It has been clear to them that the rent freeze was unconstitutional but they went ahead anyway.”

Olivier, 27, in Neukölln is facing a €400 per month rent hike. He said: “I’m mad. How could they not know that they weren’t respecting the constitution? And now we pay the price.”

Meanwhile, Max, 33, in Prenzlauer Berg has to pay €150 extra per month.

“They (the Berlin Senate) need to accept that they made a huge mistake making this decision and applying it before the court ruling, and help those who are affected the most.”

READ MORE:

‘My priority is not to starve’

Some people are in an extremely tough situation – and at the mercy of their landlord. 

One reader, who asked to remain anonymous, said he is facing back payments of around €4,000.

“They (the landlord) emailed me after the cap was overturned asking for the complete amount at the latest by May 1st. It just kind of shows the greediness and immorality of the whole situation. 

He said he was “stressed and depressed”, adding: “My priority right now is to pay this amount and not starve.”

A 40-year-old in Friedrischain said their rent will go up by about €192 per month – and they owe around €1,200. 

The 40-year-old said the Berlin government should help tenants “through legal support with lawsuits to prove that every single rent is too high”.

Karima, 31, in Friedrichsfelde, will see her rent go up by €470 per month.

“I’m a single mom who lost her job,” she said. “This decision will put my financial situation into hell. I won’t be able to afford anything for my little daughter. I started thinking about moving out of Germany…this is so crazy.”

Another anonymous person said they faced rent arrears of €4,000. 

“Both my partner and I lost our jobs in the pandemic,” the reader said. “Now we have to borrow money just to pay back the landlord. On top of it, if the landlord can increase rent again and if we don’t find jobs it means we can’t even afford rent anymore.”

Andrew, 27, in Freidrichshain is also facing a rent hike.

“Many friends who have lost jobs due to the pandemic will likely be unable to repay this rent and as such may have to move out,” Andrew said. “However they may not be able to find a new place to live as they owe money. It is a cruel decision.”

READ ALSO: Berlin rent freeze: 340,000 tenants ‘paying too much’ for housing

Germany has put people ‘deeper into crisis’

Gerasimos, 26, is seeing a rent hike of €468 and a bill of €2,340.

He described himself as “angry”. Lots of people have lost their jobs or been put on Kurzarbeit (reduced working hours) in the pandemic, resulting in pay cuts.

“Germany offers no support to the middle class, it is obvious that everything is in favor of the rich,” he said. “Me and all my friends are losing money and trying to survive with 60 percent of our salaries while everything gets more expensive.”

Flats in Berlin in February 2021. Photo: picture alliance/dpa | Jörg Carstensen

He said during the pandemic with tough restrictions and a slow vaccine rollout, Germany had put “its people deeper in crisis”.

Paula, 29, is seeing her rent costs go up by more than €400 and has to pay back around of €5,000.

She urged the Berlin government to cover the back payments of residents because it was their “mistake”.

“I feel disheartened,” she said. “With the rent cap, my monthly rent value finally got into a level which was manageable and would bring me considerable improvements on my quality of life, as well as allowing me to boost my savings.”

Lots of people agreed that the fabric of Berlin was changing forever. 

A 48-year-old woman, whose rent is going up 50 percent said: “My heart sank. This city is being crushed and will never be the same haven for free spirits. I’m sad for my friends in the arts who never have enough money on a good day.”

How should Germany address the housing shortage and rent hikes?

Lots of respondents told us they supported a Germany-wide rent cap put in place at the federal government level. This topic will be a big issue at the elections later this year when Chancellor Merkel will stand down.

Jon in Schöneberg said: “I think a rent cap is essential and has to happen soon. A quick review of ImmobilienScout (real estate site) since the rent cap was ruled illegal shows that landlords have wasted no time in putting properties on the market at ludicrous rents. Average in Schöneberg seems to be getting to €20 per square metre.”

Hannah said she was in favour a rent cap. “In addition I would hope the country would reallocate funds to encourage more building of sustainable affordable living options, and maybe include a law discouraging speculative real estate purchasing,” she said.

Swathish, 32, said the Berlin law “needs to be implemented again”

“Landlords and real estate agents taking huge advantage of the loopholes in the existing rent law is giving power to few people over the society,” Swathish said.

Einar, 34, lives in Munich and is a former Berlin resident. 

“Build more housing to force the rent down, buy the buildings directly so that the government can put down the rent on apartments in different areas of Berlin to force the price down,” said Einar. “Make it easier to create non-profit for owning and renting out apartments.”

But not everyone is on board with the idea of strict rent controls. Giuseppe, 47, said a Germany-wide rent cap is a “crazy idea”.

Thanks to everyone who shared their experience with us. Although we weren’t able to include all the submissions, we read each of them and we are truly sympathetic to the challenges everyone is facing right now. 

If there’s anything you’d like to ask or tell us about our coverage, please feel free to get in touch.
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