On 30 January 2020, the Berlin House of Representatives [Abgeordnetenhaus] adopted the so-called “rent limit”. Now that the law has been adopted, it is expected to enter into force on 23 February 2020. Although the constitutional court [Verfassungsgericht] is expected to handle the law, all those affected must now comply and get to grips with the new regulations.
In particular, this applies for the new information obligation, which states that landlords must give tenants information on the relevant circumstances taken into account when calculating the upper rent limit, without being requested to do so, within two months of the law entering into force and before concluding any new tenancy agreements. Landlords also have to check whether the rent they charge is permitted. If a rent increase is made after 18 June 2019 (the effective date), the rent payment must be adjusted to correspond to the level on the effective date. Nine months after the law has entered into force, the second stage of the new law will take effect too. For existing tenancy agreements, this means maximum rents (upper limit + 20% +/- location premium/discount), which could also be below the rent on the effective date. Landlords have to check whether the rents paid have to be adjusted in this way.
If you have any questions about the rent limit and the effects on the Berlin property market, we would be happy to help.