Re-letting without a rental price brake

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With their (here Judges Beuermann (GE Mietspiegel 13.05.2021 pages 2021 and 21) and Prof. Sebastian (here ) at the same time declares that the rent brake will then also no longer apply. That would mean that new rentals are no longer tied to the local comparable rent, but are free of charge.

In this article I discuss the arguments on which this assessment is based, what I think of it and what that means in practice in terms of tenancy law.

What does the rental price brake regulate?

In short, it limits the amount of rent when you rent a new one. § 556d para. 1 BGB stipulates that this (apart from exceptions) may be a maximum of 10% above the local comparative rent. Originally, this regulation was limited to 5 years to give tenants a respite and politicians time to build enough new living space to take the pressure off the market. After 5 years it was extended by another 5 years because the pressure in the market has increased rather than decreased, and detailed questions have been tightened several times. According to the current status, the Berlin Rent Limitation Ordinance apply until the end of May 2025.

It is only possible to calculate what is 10% above the local comparative rent if you can calculate the local comparative rent yourself. The Berlin rent index made this possible until May 12.05.2021th, 10. If a rent index is missing, it is in fact impossible to determine what the oüVm is for the respective apartment in question without an expert opinion. This means that the XNUMX% above can no longer be calculated. This makes it impossible for landlords to make a legally compliant calculation of the permissible rent when letting a new one.

Rent index as a mandatory requirement for the rent brake?

Richter Beuermann and Prof. Sebastian refer to this decision of the BVerfG (Ref. 1 BvL 1/18, 1 BvL 4/18 and 1 BvR 1595/18). In it, the BVerfG rejected submissions and a constitutional complaint against the rent brake. In the reasons it explained why and under what conditions such regulation is permissible.

In paragraphs 56 to 58, the BVerfG specifically addressed the question of linking the rent brake to the oüVm and its calculation:

“Section 556d (1) of the German Civil Code is sufficiently determined.

The reference to Section 558 (2) of the German Civil Code (BGB) to determine the comparative rent customary in the location is not a dynamic reference that may contradict the requirement of legal clarity. Dynamic references are permitted if the legislature itself determines the content of its provisions despite the reference and does not subject it to the decision of third parties (...). The reference to Section 558 (2) BGB in Section 556d (1) BGB does not violate this. However, it does not affect the clarity of the content, freedom from contradictions and comprehensibility, even if the maximum permissible rent at the start of the rental, based on the usual local rent, influences the amount of the usual local comparative rent.

Even as far as the rule of law dictates that rental price regulations should be designed according to their content and requirements, that the landlord and tenant are able to reasonably determine the legally permissible rent (...), the use of the local comparative rent is not objectionable. It is true that their determination can pose practical difficulties for the contracting parties in municipalities in which no qualified rent index has been drawn up (see Bundestag printed paper 18/3121, p. 29; v ...). An application of the regulations on the local comparative rent in accordance with the requirements of the constitution is nevertheless possible (see BVerfGE 37, 132 <143>)."

The reference to the latter decision (BVerfGE 37, 132) leads to the year 1974 and unfortunately only to rather general considerations that do not really help the practical application of the law in everyday life. The essential core of the considerations there read (margin nos. 33 to 35):

"The complainants' objection that the rule violates the rule of law because of its vagueness is not justified. However, content-defining provisions within the meaning of Article 14 sentence 1 of the Basic Law must also correspond to the requirements that the rule of law places on the formulation of legal norms (...). The fact that a law uses indefinite legal terms that need to be interpreted and specified does not in itself violate the rule of law principles of clarity of norms and justiciability (...). The fundamental admissibility of such legal terms does not release the legislature from formulating the legal provision in terms of its content and its requirements in such a way that those affected by it recognize the legal situation and can adjust their behavior accordingly. Those subject to the law must also be able to reasonably determine whether the actual prerequisites for the legal consequence expressed in the legal norm exist. In concrete terms, this means: landlords and tenants must be able to calculate the legally permissible rent, and the courts must be able to check whether the rent increase demanded is fully or partially justified. (...)

It is not to be overlooked that the application of the concept of the local comparative rent ... causes considerable difficulties. The determination of the "local fees" requires the determination of the actual and usually paid rents for comparable apartments. Such determinations are - apart from the diversity of the circumstances - problematic because it is not always possible for those involved to find "comparable" apartments, and municipal rental value tables or rental value tables are usually not available.

Nonetheless, the regulation can be accepted, since an application in accordance with the material content of the standard, if it is handled appropriately and in accordance with the constitutional principles set out, cannot be ruled out."

We therefore state: on the one hand, the landlords and tenants must be able to calculate the legally permissible rent. On the other hand, according to the BVerfG (from 1974), this is also possible without the rent index.

I have my doubts about the latter. These arise from the fact that in the last few weeks I have been asked several times by clients whether I could work out the rent for an apartment at which they can now rent it, and I could not give them an answer. If I am not able to do this as a specialist lawyer, how should a property manager or private owner do it?

After all, constitutionally, the question has not been clearly answered. The requirement that a landlord must be able to calculate the permissible rent and the view that this can also be done without a rent index are in contradiction to one another. The BVerfG will still have to resolve this objection.

Assessment of the legislature

When the rules on the rental price brake were introduced in 2015, the German Bundestag gave thought to how difficult it is to determine the oüVm when re-letting. On page 24 of the BT printed matter 18 / 3121 he estimated the time invested as follows:

"Further compliance costs will arise for the landlord in that, in the case of a rental, it is necessary to check the amount up to which a rent can be requested according to §§ 556d ff. The time required for an individual case is generously to a maximum of two hours appreciate. It arises from dealing with the evaluation criteria, for example on the basis of a rent index, on the collection of relevant information about the apartment and its current classification in the permissible price structure. In this case, however, only the additional effort that arises from the new type of determination needs to be taken into account, because even without regulating the permissible re-letting rent, the landlord has to invest effort in setting the price. The estimated value is an average. In many cases, the landlord had already dealt with the classification of the apartment in the rent index, for example in the context of rent increases according to §§ 558 ff. BGB in the previous tenancy. It is not uncommon for similar apartments to be found in the same building or in the other portfolio of the landlord. In these cases, the time required is less. The first time it is referred, it can also be longer. The current value per hour is estimated at 24,90 euros (wage cost table according to the classification of economic sectors, medium qualification level for real estate and housing). A further 3 euros are to be added for administrative costs (copies, postage, telephone). This results in a value of 52,80 euros per rental case."

On page 28 of the explanatory memorandum, the following words refer to the link to the oüVm:

"A rent index can often be used to determine the local comparative rent."

The legislative assessments are not tenable without the rent index. A link to comparable apartments in the house may be sufficient for the formal justification of a rent increase according to § 558a BGB; In judicial proceedings, however, an expert opinion would be used to check whether the comparable apartments actually reflect the oüVm or not. It is no different for new rentals. As a result, the oüVm cannot be determined without an expert if the rent index is missing.

Now one could perhaps still consider it constitutionally permissible to demand these costs from the landlord, if this was at least possible. Like me executed yesterday However, there are currently hardly any rental appraisers in Berlin, and the existing ones do not accept any orders for reasons of capacity. This means that even with good will and unlimited financial resources, it is currently not possible for a landlord to calculate the permissible rent at the start of the rental period.

Assessment of the Berlin Senate

The Senate Department for Urban Development and Housing seems to agree with Judge Beuermann and Prof. Sebastian. On her website she declares that the Berlin Rent Limitation Regulation is void after the judgment of the BVerfG:

Intermediate result: presumably no more rent controls in Berlin

In view of the contradicting requirements of the BVerfG, the question must be left open in the result. Prof Sebastian formulates accordingly carefully:

“… The tenants in Berlin are probably no longer protected by the rental price brake this week. According to a ruling by the Federal Constitutional Court of July 18.07.2019, XNUMX and the relevant commentary literature, the prerequisite is that tenants and landlords can reasonably determine the legally permissible rent. If there is no rent index, it is doubtful whether the rent brake is constitutional. Without a valid rent index, the rent brake will de facto come to nothing. In addition, it is also questionable whether the regulation without the rent index is even constitutional. "

Of course, this only applies to new contracts or relays occurring after May 12.05.2021, 12.05.2021. The rental contracts concluded by May XNUMX, XNUMX or the rent scales that have occurred can still be assessed on the basis of the rent index valid until then.

Handling in practice

De facto, the burden of proof that the rent is inadmissibly high lies with the tenant: he has to reprimand the excess and prove in court that the agreed rent is more than 10% above the oüVm. It is also at his expense if there is no fixed price because, in the absence of a rent index, it must be assumed that it is constitutionally inadmissible.

The tenant will no longer be able to provide this proof with reference to a rent index, but must now provide it in turn by means of an expert report. That, in turn, should influence the business model of Conny GmbH: it is no longer free of charge to carry out rent fraud processes, but at the latest in the process associated with considerable and long-term advance payments for expert opinions. Whether this is still lucrative on the basis of a 100% success fee will certainly be carefully assessed there.

For the landlord, on the other hand, there is the risk of repayment of any excesses if the tenant complains within the first 30 months after the conclusion of the contract and the complaint is substantiated, Section 556g (2) BGB. If the tenant only complains afterwards, this may have an impact on future months, the past will not be reversed.

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