THE BERLIN RENT CAP HAS BEEN OVERTURNED AND DECLARED UNCONSTITUTIONAL. WHAT DOES THIS MEAN FOR CURRENT AND FUTURE CONTRACTS?

After the rent cap was overturned by the German Federal Constitutional Court, we received a large number of questions regarding the new situation. We took your questions to attorney Nils Holger Bayer.

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One year of frozen rents – the consequences of the rent cap

The effects of the rent cap are keeping us occupied on a daily basis. The figures speak for themselves. The number of rental properties on the market has gone down drastically. Prospective tenants are having a harder time than ever finding accommodation. A so-called “shadow rental price” has arisen, designed to compensate for the legal uncertainty. Yet despite all its consequences, Berlin’s rent cap is not achieving its intended purpose. There has been no relaxation of the city’s property market. Quite the opposite, in fact.

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Ban on converting rental accommodation into owner-occupied properties

In implementation of the coalition agreement, the ban on converting rental accommodation into owner-occupied properties is now being redrafted. The first draft raised many questions and was roundly criticised. Many owners of apartment buildings are now understandably worried that they are no longer free to do with their property as they see fit. Dividing their property up into owner-occupied apartments will only be possible subject to restrictions.

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Price developments during the pandemic

In the final months of the year and at the start of the pandemic in particular, the price developments in 2020 were of the utmost significance to all stakeholders. The analyses show a clear, positive development in Berlin, but also Germany as a whole. Please follow the link to read about the effect of the pandemic on property prices.

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