Rental price brake extended in Berlin

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Another 5 years rent brake in Berlin

The rent brake came into effect in Berlin on June 01.06.2015, 5 and was limited to a term of 31.05.2020 years. The corresponding regulation expired accordingly on May 14, 2020, ie last Sunday. However, on February 5, XNUMX, the German Bundestag decided that it could be enacted for a further XNUMX years. You can find the "Law on the Extension and Improvement of the Regulations on the Permissible Rent Amount at the Start of Rent" here, the parliamentary process here.

Berlin made use of this extension option in good time. In the Law and Ordinance Gazette of May 28.05.2020th, XNUMX, three days before the expiration of the previous ordinance, the new one appeared (see here). Unlike in the past, it was mentioned in the legal text that it is justified and where the justification can be found, namely in the Official Journal. The official justification appeared there on May 29.05.2020, XNUMX (see here).

Is this constitutional?

There were already constitutional complaints against the first rent brake. On July 18.07.2019, 1 the BVerfG decided (Az. 1 BvL 18/1, 4 BvL 18/1, 1595 BvR 18/XNUMX). The lawsuits were unsuccessful. However, the BVerfG gave important information on the limits of such interference in the fundamental rights of the owners. Among other things, it stated:

"However, a legal regulation to regulate the rent amount must maintain the limit of reasonableness and must not put excessive strain on the owners concerned. When designing mandatory tenancy regulations the legislator must either the concerns of the tenant as well of the landlord in the same way take into account. This does not mean, of course, that they should have the same weight at all times and in every context. A one-sided preference or disadvantage is not in line with the constitutional ideas of a socially bound private property…. The limits set by Art. 14 Para. 1 GG would be exceeded in any case if the rent level regulation led to long-term losses for the landlord or to the substance of the leased property. ...

If tense housing markets can only be effectively countered in the long term only by ensuring adequate living space, it is appropriate to design the short-term rent level regulation in such a way that that the rental of living space will not become economically unattractive in the long term. With regard to the legislative goals of rent level regulation, it is also appropriate that existing rents are not lowered, but rather that inadequate rent increases are prevented when the property is re-let. ...

The local comparison rent loses this market reference angesichts the 10% allowable surcharge, the temporal and spatial restrictions as well as the exemptions from the rent level regulation also not for the period of validity of the rent level regulation. "

If you read the decision carefully, you will notice the limitations to which the Federal Constitutional Court refers in the passages cited and many others. Statutory regulations on the housing market must be appropriate, proportionate and reasonable. You must not make the rental of living space economically unattractive in the long term. The rental price brake is only proportionate because it is limited in time.

One may well doubt whether the current extension by 5 years corresponds to that. Because the market reference is lost when the rental price brake becomes self-referential because it caps new rentals for so long that its starting point - the local comparative rent - no longer has any market reference. If no market prices can develop for more than 5 years, but only regulated prices, the market reference of the rent index is lost. There are already no more unregulated market rents in Berlin because the rental price brake has been in effect for 5 years. The rent index 2019 is based on the rents of the 4 years before. All of these were already regulated. However, if there is no longer a market for a longer period of time, the regulated price level can no longer have any relation to the market. The only exceptions to this are apartments that are not subject to the rental price brake, ie built after 10/2014. In Berlin, these are on a completely different level than the regulated apartments, which shows that the market relationship of the latter has now been completely lost.

For this and a few other reasons, I think that constitutional complaints against the extension of the rental price brake should have significantly better prospects of success than those for the first 5 years.

retroactive repayment of overpaid rents

The CDU has now given in to a long-standing demand from the left-wing political spectrum: the tenant's retroactive claim to repayment of rents insofar as they violate the rent brake. Section 556g (2) BGB was changed and received the following sentence:

"If the tenant notifies the violation more than 30 months after the start of the tenancy or if the tenancy had already ended upon receipt of the complaint, he can only claim back the rent due after receipt of the complaint."

30 months is two and a half years. The regulation came into force on April 01.04.2020, XNUMX.

Is the new owner liable for overpaid rents to the old owner?

The rule raises many problems. Among other things, it should be interesting to know which landlord is liable for the repayment if the property has been sold in the meantime. Instinctively one would think that only those who received the excessive rent can be obliged to pay back. However, the claim for reimbursement requires a complaint. The tenant can only explain this to the landlord. A previous owner is no longer a landlord, the complaint against him would be irrelevant, it cannot trigger any legal effects in the rental agreement between the tenant and the current landlord. Conversely, a complaint against the current landlord cannot trigger any legal effects against the previous owner.

These considerations make it seem more plausible that the owner is liable for repayment during whose period of ownership the repayment claim falls due.

This means that buyers of properties from April 01.04.2020st, XNUMX also buy the risk of rent repayments for up to two and a half years. As soon as market participants become aware of this, they will have to price it in. Brokers and due diligence lawyers should point out the risk, otherwise liability may arise. These are serious amounts of money.

Against this background, object calculations have also been waste since April 01.04.2020st, XNUMX. Earned value can no longer be determined by a factor based on current numbers. Because these can change retrospectively. A calculation of the earnings value is currently only possible if each individual tenancy is analyzed in accordance with the criteria of the rental price brake. This considerable effort must also be paid for.

As far as can be seen, the banks have not yet focused on this problem. As soon as that changes, financing is likely to become more difficult.

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