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HOUSING

Berlin’s ‘Mietendeckel’ rent freeze ruled unlawful. What does it mean for tenants?

Tens of thousands of Berliners face an immediate rent increase of hundreds of euros per month, plus a strong possibility of having to pay backdated rent. Here's what we know so far.

Berlin's 'Mietendeckel' rent freeze ruled unlawful. What does it mean for tenants?
Berlin flats. Photo: DPA

What’s happened?

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.

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.

READ MORE: Germany’s top court rules Berlin’s disputed rent cap unlawful

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. 

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.

READ MORE: How to join a Mietverein (renters’ association) in Germany

With reporting by AFP

Member comments

  1. Do you know if we have to pay the money back immediately or should we wait for a letter from the landlord demanding that? Does the law regulate that?

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RENTING

Everything you should know about renting a furnished flat in Germany

Furnished properties are increasingly popular in Germany - but it's worth knowing the rules around them to make sure you don't get overcharged. Here's everything you need to know before signing the contract on a furnished flat.

Everything you should know about renting a furnished flat in Germany

For someone moving to a new country or city, it seems like a dream scenario: you find a new place, pick up the key, and simply move in and unpack. Everything you need, from your bed to your coffee table, is already there waiting for you. 

You can dispense with the endless trawls through IKEA showrooms and trips across town to pick up second-hand furniture on Ebay Kleinanzeigen – not to mention the stress of endless decisions on colour schemes and measurements. 

It’s exactly this that makes furnished flats such a popular choice with foreigners. While they may not be a long-term option, the ease and flexibility of being able to move-in straight away makes them a great short- or medium-term option while you’re finding your feet in a city.

So, what’s the catch? 

A search for furnished flats on any rental property portal will reveal all. 

For around 30 square metres in Hamburg – the size of a large hotel room – it’s not unusual to see prices of around €2,700 or more per month, which amounts to a pretty hefty €90 per square metre. In Berlin, €3,000 per month may well be the price you pay for a tiny studio in a central location: €100 per square metre.

In the banking hub of Frankfurt, things are marginally more affordable. Here, a 30-square-metre furnished flat will set you back around €1,500. But that’s still a pretty steep €50 per square metre. 

Listings like these can give the impression that landlords are allowed to charge whatever they please for a furnished property. Thankfully, that’s not true – though the rules can get a little bit murky, especially when it comes to short-term lets.

READ ALSO: Six confusing things about renting a flat in Germany

Here’s a few other things you need to know. 

What is a furnished flat?

If a flat is rented as a furnished flat, it should have at least the bare essentials that are required to live in it. Generally, that would mean a bed, wardrobe, table, chairs and sofa, etc. 

However, you can occasionally find furnished flats that are “löffelfertig” (spoon-ready), which as the name suggests means they have everything you need, right down to cutlery and crockery. 

Why are furnished flats more expensive?

Generally speaking, landlords are entitled to compensation for the furniture they buy for the property, which can push the monthly rent up by as much as a few hundred euros per month. 

Since they don’t have to be clear about these costs and how different parts of the rent are calculated, some landlords may inflate the base rent as well, meaning that tenants may end up paying way over the odds. 

It’s also worth knowing that if properties are specifically defined as either holiday or short-term lets, landlords are exempt from many of the usual rent controls. 

Furnished holiday flat Germany

A modern furnished flat in Mecklenburg Western-Pomerania. Photo: picture alliance/dpa/Bades Huk | BRITA SOENNICHSEN

If the furnished flat is considered to be a holiday let, then the tenant is often required to pay tourist tax for each night they stay there. In this case, the flat also doesn’t have to be furnished to a particularly high standard as it is only intended to be lived in for a very short time. You may find this type of flat absurdly pricey compared to normal rentals in the city, and if money is a concern it’s best to steer clear of holiday lets for longer-term stays. 

If you work in the city and are staying somewhere for more than two months, the landlord may decide to class the property as a temporary let. In this case, the landlord is exempted from clauses like the Mietpreisbremse (rent brake), which are designed to slow down the rate of rent increases, and you should have a clear duration or move-out date specified in your contract.  

It’s important to note that the landlord will usually have to give a good reason for restricting the time period of the rental. This could be the fact that they or their family want to use it themselves or are planning renovations at a later date. 

READ ALSO: Altbau vs Neubau: What’s the difference and which should I rent in Germany?

How much more can my landlord charge?

As mentioned above, holiday and temporary flats can often be rented out for eye-watering prices – but there are strict rules on categorising a rental flat as temporary or holiday accommodation.

For an ordinary furnished rental, the rent should usually be roughly based on standard prices for similar properties in the same area (a system known as the Mietspiegel), with any premium features or fixtures adding slightly more to the monthly rent. As mentioned above, the landlord can also charge a surplus for the furnishings they include in the flat.

The broad rule of thumb here is that this should be linked to the value of the furniture and its depreciation in value of the course of time. Though landlords aren’t forced to be transparent about the system they use, the two most commonly used ones are the Hamburg and the Berlin model. 

Furnished flat

A cosy bedroom in a furnished flat. Photo: picture alliance/dpa/VDM | Rauch

With the Berlin model, the landlord is allowed to charge two percent of the total value of the furniture each month.

The furniture is assumed to have a lifespan of 10 years, so if the furniture is new when the tenant moves in, they can charge two percent of the purchase price of the furniture each month. If all the furniture in a flat cost the landlord €5,000, that would amount to €100 extra in rent each month. The value of the furniture goes down by ten percent per year, so after five years the landlord would charge €50 per month on top of rent, and after ten there would be no surcharge.

The Hamburg model assumes that furniture goes down in value over the course of seven years, after which time it’s worth just 30 percent of its purchase price. The amount that the tenant pays towards the cost of the furnishings each year is based on these calculations.

READ ALSO: 

Can I take furniture out of a furnished flat?

Yes! If you’re someone who likes to put your own stamp on a place, then you’re fully entitled to replace some of the furniture with your own.

But – and this is a big ‘but’ – you’ll be responsible for storing the furniture safely until you move out, and putting everything back in its previous place.

In other words, we don’t recommend chucking the coffee table out on the street with a ‘Zu verschenken’ label before moving in your own piece. We guarantee your landlord will not be amused once they find out. 

To clarify what’s meant to be in the flat when you move in (and when you move out), tenancy law experts recommend having a full inventory in the contract. That should help you avoid any nasty disputes in the future.

What if the furniture is damaged, missing or defective? 

If furniture is damaged, missing or unusable, you’re entitled to have it repaired or replaced and can also ask for a rent reduction.

Once again, it’s useful to have a full inventory of what should be in the flat to help you with these negotiations.

Do tenants in furnished flats have the same rights as other tenants?

Generally, yes. Having furnishings inside a property doesn’t change the legal status of the contract.

That means that your landlord can’t, for example, suddenly ask you to move out at short notice and without any cause. As mentioned, they also need to have a specific reason for limiting the duration of your contract – otherwise the move-out date isn’t valid. 

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