Germany’s highest court has ruled that Berlin’s ‘Mietendeckel’, or rental cap, is unconstitutional.
The Federal Constitutional Court said that the policy to freeze rents in Berlin for five years to combat soaring living costs was unlawful in a ruling published on Thursday morning.
The capital’s “Mietendeckel” law or rent cap “violates the Basic Law and is thus ruled void”, the court in the southwestern city of Karlsruhe said in a blow to millions of tenants.
The rent freeze was passed by the Berlin Senate in January 2020. It was a flagship policy of the local governing coalition of the centre-left Social Democrats (SPD), the Greens and the far-left Linke (Left) parties.
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The law capped rents until 2025, after which any increases would have been limited to 1.3 percent per year in line with inflation
The court ruled in favour of 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.
It agreed with their argument that rent policy falls under federal law not the jurisdiction of Germany’s 16 states.
What does it mean for renters? Do they have to pay more money?
Yes, a huge amount of people will have to pay more. The decision is undeniably a huge blow to millions of tenants. With the policy becoming void, it means that many residents in Berlin will face an immediate rent increase. For some that could mean €100 extra per month, for others it could be more than €500.
7.5k euros a year – that’s how much I would have saved a year with the #Mietendeckel
Pocket change to a multinational landlord, life changing for me
— Kat (@kat_lunia) April 15, 2021
The ruling also means that people will have to pay rent back for the months they paid a lower price under the Mietendeckel. That means some people will face a bill of thousands of euros.
But many people have not saved the difference. A poll by Sparkasse bank for regional newspaper the Tagesspiegel estimated that just under half (47 percent) of Berliners had not set money aside for the arrears now due.
Some landlords have, however, said they will not demand the backdated rent – they will only charge the higher rent from the court decision.
Germany’s largest housing company, Vonovia, announced shortly after the ruling that it would not ask tenants for rent arrears. Tenants should not suffer any “financial disadvantages as a result of political decisions made”, announced Rolf Buch, CEO of Vonovia.
Another large landlord, Deutsche Wohnen, said it would demand the money back, but that it would offer payment plans for tenants so that nobody was made homeless.
Following the decision, the German Tenants’ Association called on the federal government to act on rising rent costs for people living in Germany’s cities.
The decision is bitter, “but it is also a loud wake-up call to the federal legislator to finally act and stop the rent explosion in many German cities,” said the President of the German Tenants’ Association, Lukas Siebenkotten.
What can you do if you’re affected?
There are several different organisations representing tenants rights in Germany including Berlin. For a small fee every month, these groups can advise you or help with any issues, legal problems or questions you have on how to deal with landlords. Check out our story below for more information.
With reporting by AFP