The German constitutional court has declared a pioneering measure by the city of Berlin to counter rent increases, the rent ceiling, illegal. The Court ruled that the freezing of rents is not lawful, because it is an issue which has already been settled nationally and is therefore contrary to the Constitution.
The court‘s judgment is a financial blow to an estimated 1.5 million Berlin tenants who now have to pay higher rents and possibly pay overdue rent.
In February last year, rents in Berlin were frozen at the level of the rental price of June the year before. At the same time, tenants could have their rent corrected with a simple check. For many Berliners, this meant a rent cut of hundreds of euros.
The left-wing government of the German capital wanted to prevent the sharp rise in rents. Between 2013 and 2019 prices for rental housing in Berlin increased by 27 percent.
The law had many fans in Berlin, but according to the supreme judges in Karlsruhe, the measure is not in line with national rental legislation. In 2015, the so-called Mietpreisbremse, the rental price brake, was introduced nationwide. Among other things, this ensures that the rent for new contracts should not be increased by more than 10%. The constitution states that if there are measures at federal level, the Länder cannot adopt another law on this.
The landlords can now increase the rent again immediately and also retroactively request back the underpaid rent. The dome of trade unions warns: “Especially now in times of corona you just can’t ask that of many tenants,” says Stefan Körzel.
After the decision became known, Berliners went to the streets to protest:
Berlin-based real estate company Vonovia has declined to refrain from refunds, but so far it has been the only company. The largest landlord in the German capital, Deutsche Wohnen, wants to recover the rent. But Deutsche Wohnen assures that “no tenant will be evicted from his home for this”. It would be an average of 430 euros per house. Deutsche Wohnen rents 115,000 homes.
The case was brought by more than 200 members of the CDU and the Liberal FDP. They believe that the Berlin rent ceiling infringes too much the right to property and rights to enter into contracts for lease and lease. They also point out that the ceiling is driving away investors.
After the introduction of the rental ceiling, the supply of housing decreased. “Instead of socialist experiments, we need a building boost,” says FDP member Daniel Föst to local media. The judges of the Constitutional Court have not ruled on the content of the rent ceiling.