Rent cover

Berliner Mietendeckel or Mietendeckel is the colloquial term for the law passed by the Berlin House of Representatives on January 30, 2020 to revise legal regulations for rent limitation ( MietWoG Bln for short ). The law initiated by the red-red-green coalition was supposed to enable the public law limitation of residential rents. In the legal literature , there were different views on the constitutionality of the law, especially with regard to the legislative competence of the state of Berlin.

The main regulations included a rent freeze, rent caps, rent reductions and the limitation of the modernization surcharge . The law did not apply to certain living spaces, in particular not to living spaces that were ready for occupancy for the first time on January 1, 2014 (new buildings) or that had received public funding. The law was originally limited to five years.

With a decision of March 25, 2021, the Federal Constitutional Court ruled that the “Berlin rent cover” is incompatible with the Basic Law for reasons of legislative competence and that the Berlin law is void. The court did not expressly rule on the material constitutionality of rent ceilings. However, it stated that the legislature could pursue social and other goals, in particular with the appropriate design of civil law, by setting guidelines for the drafting of contracts and ensuring that they are observed and enforced.

Rent stop

Section 3 (1) of the law forbade asking for a rent that exceeded the rent effectively agreed on June 18, 2019 (reference date). Rent increases due to agreed graduated or index rents and rent increases up to the local comparative rent according to § 558 BGB are prohibited. The draft provides for a right to increase inflation from January 1, 2022, which, however, is maximized at 1.3% even with higher inflation. In addition, the new rent was not allowed to exceed the planned upper limits (Section 3 (4)). Rent in the sense of the draft was the basic rent including all surcharges for furniture and equipment. Between March 1 and November 30, 2020, a total of 1259 violations of the rent freeze pursuant to Section 3 were reported to the district authorities.

Rental caps

Section 6 of the law provided for rent ceilings for 12 categories. The lowest upper limit (in EUR / m²) was 3.92 EUR for apartments that were ready for occupancy for the first time before 1918 and that have no central heating and no bathroom, or in which the tenant has installed this equipment himself. The highest upper limit was EUR 9.80 for apartments that were ready for occupancy for the first time between 2003 and 2013 and have central heating and a bathroom (no upper limit for younger apartments). For apartments with modern equipment, the upper limit increased by 1 EUR / m². For apartments in buildings with no more than two apartments, the rent ceilings increased by 10%.

The upper rent-oriented, according to legislative intent roughly to the average values of the rent index 2013. These included 2,012 rents collected, which were agreed during the years 2008-2012 or changed. The use of mean values meant that 50% of the rents permitted according to the 2013 rent index were considered excessive in the future. The effects of rent-increasing "special features", which the 2013 rent index showed in addition to the table criteria, were not yet taken into account. The 2013 values were increased in line with the development of real wages from 2013 to 2019. This means that there was no inflation adjustment for the period from 2008 to 2013 and for the period thereafter insofar as the real wage development (wage growth minus inflation) lagged behind inflation. The increase and future dynamization of the maximum prices set by the state (Section 6 (5) of the draft) corresponded to the real wages and left the cost development for landlords (e.g. repair costs) partially out of consideration. The upper limits, apart from the surcharge for modern equipment, applied regardless of location and condition. From now on, these had to be used as criteria for pricing within the legal framework. According to the (old) rent index, the equipment could justify price differences of up to 7 euros - that is up to 70% of the current maximum rent. instead of 1 EUR as in the future. As long as B. a Wilhelminian style apartment has a bathroom and collective heating, it should therefore cost a maximum of 6.45 or 7.45 EUR in the future. It is completely irrelevant whether the apartment is poorly located and was last renovated in 1960 or whether it is a newly renovated villa floor in a prime location with sauna, alarm system and full furniture - hence the term "upper limit".

Between March 1 and November 30, 2020, 243 violations of the rental ceiling were reported.

Rent reduction (capping)

From 9 months after the law came into force, i.e. from November 2020, so-called excessive rents in existing buildings should also be prohibited. Unlike in the first draft, this should apply automatically, not by means of a reduction in a notification. This should be the case if the upper rent limit according to § 6 MietWoG is exceeded by 20% and discounts on the rent per square meter for simple and medium-sized residential areas (0.28 EUR / 0.09 EUR) or surcharges for good residential areas (0.74 EUR) have been taken into account (§ 4). In the case of an apartment in a good residential area with "modern" equipment according to the AV-MietWoG criteria, which was ready for occupancy for the first time in 2013, the capping applied to ((EUR 9.80 + EUR 1 + EUR 0.74) ⋅ 1.20 =) 13.84 EUR. In a normally equipped apartment z. B. in a simple residential area built in 1990, the cap applies at ((6.04 EUR - 0.28 EUR) ⋅ 1.20 =) 6.91 EUR. It shouldn't matter whether z. B. in 2008, when Berlin was still characterized by vacancy and a "tenant market" prevailed, higher rents had been agreed for the apartment in question. Part of the legislative package was that the state provides the districts with funds for four additional positions with which the additional work is to be dealt with.

Limitation of the modernization fee to 1 EUR / m²

According to § 559 BGB, the landlord can increase the rent during the current tenancy if he has carried out modernization measures (e.g. measures to save energy or improve living conditions, § 555b BGB). The increase amounts to 8% of the modernization costs. According to Section 5 of the MietWoG Bln, this increase should only be possible for very specific modernization measures and should also be limited to 1 EUR / m². The law announces that the Senate will provide funding programs for higher modernization costs.

Procedural status

In June 2019, Katrin Lompscher , Senator for Urban Development and Housing , Die Linke , announced the introduction of the rent cap with retroactive effect from June 18, 2019. On October 22, 2019, the Senate presented the draft law to the Council of Mayors of Berlin's districts. In the next five years, tenants no longer have to fear "losing the roof over their heads due to exorbitant rent increases or high modernization costs." He was in the parliamentary process from the end of November 2019 to the end of January 2020. The law was passed by the House of Representatives on January 30, 2020 and came into force on February 23, 2020. The implementation regulations for the rent cover have also been published since April 2, 2020. The Berlin rent cap came into force on November 23, 2020 as planned. The Federal Constitutional Court rejected an urgent application in October.

On March 25, 2021, the Federal Constitutional Court ruled that the rent cap is incompatible with the Basic Law and is therefore void. The state of Berlin has no legislative competence after the rental price brake decided by the federal government in 2015 . With Sections 556 to 561 BGB, the federal legislature finally made use of the competing jurisdiction for rental price law as part of civil law. If the federal government makes use of the competing legislation, the federal states lose the right to legislate in accordance with Article 72, Paragraph 1 of the Basic Law at the time (“as long as”) and to the extent (“to the extent”) in which the federal government is permitted to exercise its legislative competence Claims (so-called blocking effect).

Political discussion

SPD

The governing mayor of Berlin, Michael Müller , SPD , saw the planned rent cap as an instrument for lowering land prices. Nobody has to accept unhindered rental speculation and unregulated rising land prices. “Land is a city's most important and valuable resource. The way people speculate here with land is simply indecent, ”said Müller. If you wait too long, you have conditions like in London and Paris, and he doesn't want that in Berlin. There are many people who can no longer bear that they can no longer pay the rent with their normal income. They will be helped by the rent cover. The rent cap serves to make expropriations superfluous. The Senate wants to lower rents for apartments under the heading “Build, Buy, Cover”. After all, apartments would be built in Berlin. However, some districts are doing too little and there are “bans on thinking” in certain areas, for example at the edge of the Tempelhofer Feld . Furthermore, Berlin wants to “buy what is not nailed down”.

Green

The co-chairman of Bündnis 90 / Die Grünen , Robert Habeck , advocated the rent cap as an "emergency instrument" because the market did not work. Because of the low interest rate policy, many investors would invest in land, housing companies such as Deutsche Wohnen would have to meet yield expectations accordingly. Katrin Schmidberger , Bündnis 90 / Die Grünen, spokeswoman for housing and rents of the Committee for Urban Development and Housing in the Berlin House of Representatives, thinks that the rent cap is a “return cap” and “urgently needed”. "We are happy to forego investors who are only interested in their bank account, because they damage the city," said Schmidberger. The rent cap is about tenant protection and social cohesion. He ensures that rents no longer rise exorbitantly when someone moves out. People could move again without the price of an apartment increasing. Anyone who has barely increased rents in recent years and has shown such a public interest will not be "punished" by the rent cap. The rent cap helps to solve the problem that more and more people in Berlin have to spend over 40% of their net income on living.

At their state party conference, the Greens announced a need for improvement. They demanded that cooperatives should be exempted from the rent cap and that inflation compensation in favor of landlords should start earlier than planned. Landlords should also benefit from an increase in subsidies for energy-efficient renovations (of EUR 100 million a year instead of EUR 50 million). So the rent cap will be fairer. However, the Greens no longer want to change the draft agreed with their coalition partners.

AfD

AfD, FDP and CDU in the Berlin House of Representatives rejected the rent cap. Frank Scholtysek , AfD member of the Committee for Urban Development and Housing in the Berlin House of Representatives, feared that the rent cap, which would affect around 1.5 million apartments and thus 80% of rental apartments in Berlin, would put many landlords in financial distress, some in the Bring bankruptcy. Investments and new construction would decline, also because the rent cap is the first step towards expropriating landlords. The Senate is deliberately breaking the law with the rent cap. Craftsmen and tenants suffer. The rent cap is therefore anti-social and divides urban society.

CDU

Christian Gräff , spokesman for the CDU parliamentary group in the Berlin House of Representatives for building, living and renting, considered the planned regulation to be illegal. It harms savers, especially Riester savers and small landlords, makes it more difficult to provide for old age and will lead to a decline in new building activity. For people with lower and middle incomes, this means that it is even more difficult for them to find housing than before. The Senate does not want to help these people. Rather, his intention is to harm the landlords. The real goal of the red-red-green Senate is expropriations. The rent cap would make the resulting compensation more affordable, as would the purchase prices for state housing companies. If you want to help tenants with low and medium incomes, you have to build more apartments. The Senate estimates the need for a total of 150,000 additional apartments, 20,000 new apartments annually. However, significantly fewer would be built. One should fight exploitation by tightening the usury paragraph in the civil code .

FDP

Sebastian Czaja , chairman of the FDP parliamentary group in the Berlin House of Representatives, doubted that the rent cap would ease the burden on tenants. It divides society because it serves the class struggle. The coalition of the Greens, Die Linke and SPD is deliberately reducing living space in order to make political profit from the dissatisfaction of the tenants. For example, the Senate prevented the cooperative building of 1000 affordable apartments on the "Westkreuzbrache". With the bill, the Senate intends to break the law.

Interventionist left

The rent cap was part of a strategy paper of the anti-capitalist group Interventionist Left . It pursues the goal of socializing all apartments that are not used by themselves. The way to get there leads first of all by suppressing the private housing market “through taxes, regulation, market obstruction. This makes speculation unattractive and prices fall. ”This also reduces the compensation to be paid for the desired socialization. In media reports, the strategy paper is given political importance because the former State Secretary in the Senate Department for Urban Development and Housing of the red-red-green state government ( Senate Müller II ) of Berlin Andrej Holm is said to have influence in this group. Holm advises the Senate Administration as a member of the “Advisory Committee for the Urban Development Plan Housing 2030”. He also advises the parliamentary group of the party Die Linke in the Berlin House of Representatives .

Civil society and economy

The Berlin tenants' association welcomed the rent cap: "A rent cap under public law will significantly strengthen tenant protection, because in future tenants will know that the state is behind them when the landlord makes demands."

The Association of Housing Cooperatives Berlin rejected the rent cap. It leads to higher rents, “more housing shortages” and less climate protection.

The Central Real Estate Committee , an association of the real estate industry, said that the rent cap would not lead to a new apartment in Berlin and wrongly affect both big and small alike.

The Mietvolksentscheid eV association promoted the rent cover under the slogan “Correct cover. Then expropriate ”and wanted, after the cover, the expropriation of real estate companies, especially Deutsche Wohnen . In the summer of 2019, as part of a referendum, the association collected 77,001 signatures from people who want to reach a referendum on the socialization of large housing associations. The initiative is supported by the Berlin Tenants' Association.

The association New Paths for Berlin e. V., which rejected rent caps and expropriations, collected signatures for a referendum, according to which the House of Representatives should discuss and decide on the funding of 12,500 new apartments annually. The apartments are to be rented for 6 to 10 euros / m² and will primarily be built on land owned by the state. The board includes former SPD and CDU politicians and the managing director of the Association of Berlin Merchants and Industrialists ( VBKI ).

science

The economics professor Friedrich Breyer from Constance , member of the scientific advisory board at the Federal Ministry of Economics, argued that the freezing of rents only helps those who already have an apartment and is directed against the interests of those who want to move here. In a city that consists of 80 percent tenants, such an approach increases the chances of re-election of the ruling parties. It is clientele policy at the expense of third parties.

Survey

According to a survey by the Berliner Morgenpost and the RBB Abendschau between November 11 and 16, 2019, 71% of Berliners thought the rent cap was good. Of those on the left, 89% found the rent cover good. Among the Greens, 85% rated the rent cap positively and among SPD supporters 79% supported the rent cap. Of the AfD supporters, two thirds (67 percent) were in favor of the Senate plan. In the camp of the Union sympathizers, too, 51 percent found the rent cap good, 45 percent rejected it. And even among FDP supporters, the rent cap found support of 43 percent.

According to a Forsa survey from November 21 to 28, 2019, the approval rate among Berliners was slightly lower, at 61%. Most supporters of the coalition parties supported the rent cap. The majority of the supporters of the CDU, FDP and AfD were against the rent cap, but at least 40 percent of AfD supporters rated the regulation as sensible. In the case of the CDU and FDP, it was 31 percent each.

Even according to a Germany-wide survey by the Yougov opinion research institute for the Handelsblatt, the majority of those questioned were rather inclined to the project: only six percent rejected a rental cap in principle. One in five (20 percent) stated that they did not reject a rent cap in principle, but that the planned regulation in Berlin intervened too strongly in the market. For 29 percent, the planned regulation of the rent cap was “just right”, for a further 29 percent the regulation did not go far enough.

Economic discussion

Savings / loss of income

The Senate estimates that the rent cap will save tenants EUR 2.5 billion a year at the expense of the landlord. Berlin's own housing associations alone would have to reckon with annual losses of EUR 296 million. Figures from the housing industry vary and do not quite fit together. The Berlin cooperatives with 70,000 apartments are expecting earnings losses of 150 to 180 million euros. Maren Kern, CEO of the Association of Berlin-Brandenburg Housing Companies, which have 700,000 apartments in Berlin, estimates the expected loss of income of the member companies at 200 million euros per year.

Consequences for investments

In March 2019, the real estate company Akelius, which has 14,000 apartments in Berlin, announced that it would reduce the investments planned for 2019 from the planned EUR 40 million to EUR 3 million. Over a five-year period, investments in the Berlin portfolio would be reduced by EUR 500 million compared to the previous plan. From the point of view of the former State Secretary Andrej Holm , there is no economic loss in this. The investments would have been financed by the tenants, now the company's money is available for purposes other than construction.

Distribution of advantages and disadvantages to certain groups

In a study for the CDU parliamentary group in the Berlin House of Representatives, the employer-related institute of the German economy estimates that the rent cap will affect a little more than 70% of rented apartments. In this case, the rent cap would lead to a reduction in the expected rents, namely by capping the rents and reducing the new rent after the end of the rental period. "Depending on the type of apartment, the rent must then be reduced by up to 3.60 euros per square meter, on average across all types of apartment by over 28.4 percent." The result - based on a number of assumptions - is an average reduction in the value of the affected properties by 41.7 percent. In particular, owners who bought a few years ago are at risk of ongoing losses and possibly over-indebtedness.

The appraisers expect more conversions of rental apartments into condominiums and thus an increase in the home ownership rate. It is to be expected that new construction activity will decline, as the first reactions from the market have already shown. Modernizations of more than 150 euros / m² would be unprofitable.

Furthermore, according to the laws of the price-sales function, it can be assumed that the demand for living space in Berlin will increase: "The rent cap removes the important signaling effect of rent. The frozen or reduced rents will induce even more people to choose one in Berlin Looking for an apartment. " A higher consumption of living space per capita is also to be expected, and the lack of a price signal encourages inefficient use of living space. The decision of people to commute to the surrounding area is becoming less attractive, so that more people are rushing to Berlin and encountering little available living space there, which exacerbates the problems: “This increases the already great shortage in the housing market, and the competition for apartments increases further. Households with higher incomes will particularly benefit from the lower rents ”. In view of the still scarcer housing market, there is also the risk that more and more rental apartments will be offered at inflated prices on a flourishing black market .

Development of new building activity

In addition to the introduction of the rent cap, the state of Berlin considers increasing the supply of apartments to be one of several means of lowering rents. "There is no question that the exploitation of the housing shortage must also be countered by building additional apartments," said the Berlin Senator for Urban Development Lompscher in an expert hearing in the Berlin House of Representatives on December 11, 2019 To reduce rent increases and the housing shortage.

The Investitionsbank Berlin estimates that at least 20,000 new apartments are needed every year due to the constant influx of an average of 40,000 people annually since 2011. In 2018, 16,706 new apartments were actually built. Around 17,000 newly built apartments are expected for 2019.

4608 of the apartments completed in 2019, i.e. around 25% (assuming that the figures match the IBB figures), were built by municipal housing companies (after 3457 in 2018). Senator for Urban Development Lompscher reckons with 4,000 new state-owned apartments for 2020.

The number of apartments completed per 1000 inhabitants in Berlin increased roughly fivefold between 2009 and 2018, from around 1 to just under 5. In Hamburg, the value tripled from around 2 to just under 6 in the same period. In almost every year the value there was around 1 higher than in Berlin, so significantly more apartments per inhabitant were built in Hamburg. Under the black-red coalition from 2011 to 2016, the number of building permits issued annually had increased from almost 10,000 to 25,000, stagnated in 2017 under the red-red-green coalition and then fell to around 23,300 in 2018. In the first three quarters of 2018, according to the Investitionsbank Berlin, the number of building permits issued for new buildings fell by 12% compared to the same period in the previous year. In the first nine months of 2019 there was also a decrease in building permits for the construction of new apartments, by 7.7%.

Urban Planning Senator Lompscher explains the decline in this way

“The number of building permits has decreased somewhat - that's correct - but it is still at a very high level at over 24,000. That is not a bad number, and maintaining this level is becoming more difficult from year to year - not because we would be reluctant to approve more than 24,000 apartments, but because the projects are getting more and more complex, because it is getting more and more complicated, the locations so far to bring that one can submit a building application. That is also logical, because in the phase where construction activity has gained momentum - and this has been demonstrably the case since 2014 - the simpler projects were initially planned and then moved in the same direction. Everything we do now involves more complicated and lengthy preparation processes. "

Controversial reduction in rents through new buildings ("seepage effect")

According to a study by the brokerage company McMakler, living in Berlin is said to be significantly more expensive than in Hamburg. Existing apartments in Berlin's Mitte district, the most expensive district, cost 6,392 EUR / m². In Hamburg's most expensive district, the value is EUR 5,280 (Munich city: 7,555, Düsseldorf: 4,101, Frankfurt: 5191, Jena: 2,702). The company attributes the price difference to Hamburg to the relatively lower level of new construction activity in Berlin.

At least for the lower price segment, however, it is disputed whether the expansion of the supply through freely financed new construction will lead to falling prices on the housing market . This thesis is “resolutely rejected” in one of around 200 scientists from various disciplines who research the subject of housing and urban development, in the memorandum “For a truly social housing policy.” On the contrary, 80 German cities prove that “with increasing new building activities the average rents tend to rise ”.

Freely financed new construction of high-quality apartments does not relax the housing market as a whole, because it does not lead to an increase in supply in the lower range. There is no “ seepage effect ” in which the expansion of the supply of expensive apartments and the associated reduction in rents in this segment lead to lower rents in the simple market segment. New buildings mean that “when moving to a new building, there are always apartments available that are a little smaller, a little older and a little cheaper.” However, the “vacant apartments [...] are usually rented out more expensively”. New construction therefore “under the current conditions” does not lead to an expansion of affordable housing offers, but to an increase in the yield of existing properties.

The State of Berlin also shares this opinion. At least in Berlin there is no seepage effect. With this argument it rejected an application for the demolition of a house with 30 residential units and a living space of 1,329.93 m², in the place of which an investor wants to build a house with 67 apartments on 4,115.30 m². The demolition contradicts the prohibition of the removal of living space according to the Berlin law on misappropriation, because the living space that is to be newly created is not affordable for an average-income employee household.

The Berlin Administrative Court sees the burden of proof for the alleged lack of a "seepage effect" in Berlin with the state and writes that it has not proven this claim:

“The defendant did not adequately substantiate his assessment from the outset. The justification for the law only assumes that, due to the high standard of sheltered living space, in tense housing markets, "such a seepage effect - if at all - is not fully effective today." (Cf. Abgh.-Drs. 18/0815 of 13 February 2018 , p. 15 f.). The source cited by the legislature as the only evidence for this is not related to the Berlin housing market and is not very meaningful. It is a report by the Investment and Development Bank of the State of Lower Saxony, which deals with the seepage effect in a paragraph and does not name any empirical data or references to literature. In any case, as the plaintiff correctly points out, the report in no way excludes a seepage effect, but rather assumes a "[e] limited effect of seepage effects". In the lawsuit, the defendant only announced the outstanding result of a study by the Federal Institute for Building, Urban and Spatial Research at the Federal Office for Building and Regional Planning (...), mainly based on data from the cities of Leipzig, Nuremberg, Cologne and Bremen reproduced the text of a political initiative in the city of Freiburg im Breisgau. "

The Federal Institute for Building, Urban and Spatial Research in the Federal Office for Building and Regional Planning assumes that “seepage effects” exist, meaning that even high-priced new residential construction will lead to lower rents in the lower segment. In particular, it cites an expert opinion on the contribution of the new apartment building to the provision of housing in Hamburg by F + B Beratung für Wohnen, Immobilien und Umwelt GmbH from 2014.

Legal discussion

Both the formal and the material constitutionality of the rent cap are controversial. In terms of formal constitutionality, the core question is whether the State of Berlin is even allowed to make regulations on rent levels in privately financed housing construction, or whether this competence belongs solely to the federal government. The substantive constitutionality concerns the question of whether the encroachments associated with the rent cover, for example, in the landlords' property rights (Art. 14) or in the contractual freedom of the parties to a rental agreement are permitted under the constitution.

Assessment

An expert opinion drawn up by Bielefeld law professors Franz Mayer and Markus Artz on behalf of the SPD parliamentary group in the Berlin House of Representatives sees the necessary legislative competence in Berlin. You are following the opinion of the Berlin official Peter Weber, who brought this up in 2018 in the legal newspaper. Likewise, an expert report by Andreas Fischer-Lescano , Andreas Gutmann and Christoph U. Schmid commissioned by the Rosa-Luxemburg-Stiftung regards Berlin as having legislative competence. The report on behalf of the Rosa Luxemburg Foundation does not deal with the material unconstitutionality. However, the experts Mayer and Artz consider large parts of the present draft law to be materially unconstitutional. This applies, for example, to interfering with existing rental contracts (quote: "There is clearly protection of the existing"). Furthermore, Mayer and Artz consider a number of the regulations that are now planned to be incorrect in terms of content or harmful to the goal, for example because renovation backlog occurs and the number of apartments on offer is declining overall. They therefore only recommended a moratorium on rent increases for increases in accordance with Section 558 of the German Civil Code (BGB) and a suspension of the reason for exception in accordance with Section 556e (1) of the German Civil Code (higher pre-rent).

A number of other reports, such as that of the Bundestag's scientific service, consider the rent cap to be unconstitutional. An expert opinion by the former President of the Federal Constitutional Court, Hans-Jürgen Papier , ( CSU ), commissioned by the GdW Federal Association of German Housing and Real Estate Companies from September 2019 comes to the conclusion that the law is already formally unconstitutional, among other things. because the federal government has regulated the matter conclusively and comprehensively, so that the state does not have its own legislative competence. Among other things, the rent cap is in conflict with the rent brake issued at the federal level , which has also been implemented by ordinance at the Berlin state level and is also valid there.

A second report from December 2019, also prepared by Hans-Jürgen Papier on behalf of the GdW, examines the substantive constitutionality of the new regulation. According to the report, the rent cover is incompatible with the principle of equality. “The legal regulation is actually supposed to affect housing groups or real estate speculators. In reality, however, it is mainly 'small landlords' who feel the consequences of this regulation ”. In addition, the rent cap represents a “disproportionate interference with the property rights of the landlords concerned”. The upper rent limit could lead to permanent rental losses and impair the substance of residential buildings. The possibility of rent lowering is also incompatible with the Basic Law, since "this intervention by the legislature would be almost equivalent in its severity to a (partial) expropriation". Even if the GG allows expropriations for the common good, the rent cap does not meet the high requirements necessary for this.

The scientific service of the Berlin House of Representatives doubts the possibility of the law's retroactive effect. An expert opinion by Ulrich Battis from October 2019, commissioned by the Senate itself , also comes to the conclusion that the rent cap is largely unlawful. The Federal Ministry of the Interior, Building and Home Affairs also considers the planned law to be illegal. The state of Berlin is not allowed to enact such a law because it does not have the legal competence to do so. A corresponding opinion by the ministry from December 2019 saw several violations of the Basic Law in the Berlin draft law, including those against the freedom of ownership of the apartment owners and the freedom of contract. The governing mayor wants to take the associated risks. He justifies it like this:

“Does the politicians buckle in anticipatory obedience and say: Because there are five critical legal statements, don't we trust ourselves to really regulate the market and help the tenants? Or let's say: Yes, we have formulated a law here to the best of our knowledge and belief, which we assume that it can also be legally valid, it is controversial, and we can endure to be corrected, possibly to get one to have an even better or another way? "

Urban Development Senator Lompscher advises tenants not to spend any money they might save by capping rents, but rather to put it aside - in the event that the law is overturned by the courts.

Federal Constitutional Court on rent regulation in the BGB

In its decision on rent level regulation according to § 556d Paragraph 1 BGB ("rent brake"), to which the Federal Ministry of the Interior refers in its report (page 9), the Federal Constitutional Court examines whether the interference with the property of the landlord is proportionate and therefore permitted.

“According to the principle of proportionality, the intervention must be suitable for achieving a legitimate aim of the intervention and must not go further than the public interest requires; Furthermore, the purpose of the intervention and the intensity of the intervention must be in an appropriate relationship [...]. ”It affirms the existence of these criteria.

The legitimate goal is to create at least the prerequisites for lower-income tenants to gain access to the market; it is achieved by the norm cutting off price peaks, even if higher-income tenants are typically preferred. Appropriateness is to be affirmed when there is a possibility of achieving the goal.

The limits of necessity are also not exceeded. It is true that the regulated rent, which is based on the rent index, which is formed on the basis of a market mechanism and creates a balance between landlords and tenants through the formation of a comparative rent customary in the area, benefits not only lower-income people, but indiscriminately all those looking for accommodation in tense housing markets. Other government measures to alleviate or remedy the housing shortage could also be considered, such as promoting housing construction or improving the financial situation of those looking for housing by granting more housing benefits. Regardless of the costs associated with these measures, it is not apparent that the legislature should have used these means, within the scope of its prognosis and assessment latitude, as more lenient and unequivocally effective means - even in the short term - compared to the rent level regulation in the specific case of regulation on the rent index. The legislature also brought the purpose and intensity of intervention into an appropriate relationship. In the socio-politically controversial area of tenancy law, landlords would have to reckon with frequent changes in the law and cannot rely on the continued existence of a legal situation that is favorable to them.

If these standards are applied to the rent cap, the question of whether the rent cap reduces the chances of market access for lower-income tenants instead of increasing them as intended, i.e. is unsuitable for achieving its goal, becomes significant, since otherwise it would already be lacking.

In its decision 1 BvR 759/77, which concerned that the civil courts had set the requirements for rent increases so high that they were very difficult to meet, the BVerfG formulated: “ The comparative rent system is also a permanent rule Property restriction consistent with Art. 14 GG. It should be noted, however, that the property bond created in favor of the tenant corresponds to a legal claim of the landlord to the local comparative rent (BVerfGE 37, 132 [140 f.]; 49, 244 [249]). The courts have to observe this balance between the interests of the tenant and those of the landlord in the fundamental rights area of Article 14 of the Basic Law when applying and interpreting the relevant provisions, including the procedural rules. The constitutional reference of the regulation prohibits the restrictive use of procedural law to strengthen the property restriction and to shorten the right to judicial enforcement of the legally permissible rent resulting from Article 14.1 sentence 1 of the Basic Law. "The BVerfG writes literally in Rn. 14:" A handling of the procedural rules, which practically leads to a rent freeze and an elimination of the statutory right to the comparative rent, is - as in these decisions (BVerfGE 53, 352 (358); BVerfGE 53, 352 (359)) has been clarified - not only in contradiction to the law, it also violates the fundamental right of Article 14.1 sentence 1 of the Basic Law. but should even lead to a rent reduction in existing buildings and thereby intervene in the deliberative decision of the federal legislature referred to by the Federal Constitutional Court, it is unconstitutional according to these standards, which was taken up, for example, in the decision of the AG Charlottenburg 213 C 136/19 (margin no.24).

Administrative court of Berlin on the upper rent limit for replacement housing

In a ruling of August 27, 2019, which was not yet legally binding on January 21, 2020, the Berlin Administrative Court issued an opinion on a “cap” for rents of EUR 7.92 per square meter. According to the Berlin law on the prohibition of the misappropriation of living space (ZwVbG) , the removal of living space is prohibited. However, the removal can be approved if the resulting loss of living space is compensated for by adequate replacement living space. According to the ordinance issued under the Prohibition Act, no higher net rent than EUR 7.92 per square meter per month may be charged for the replacement living space. The Administrative Court of Berlin considered this “cover” to be illegal and therefore null and void due to its lack of proportionality. The state of Berlin is not pursuing a legitimate goal with rent regulation, as this would at least make it much more difficult to build new living space instead of old living space. The upper limit makes the creation of new living space less attractive and thus does not serve the purpose of supplying living space (marginal no. 44). In any case, the upper limit (Rn. 45)

"Neither necessary nor appropriate, because the ordinance has fixed a low rental price for replacement living space of any type and location, rigid, unlimited in time, without inflation compensation and without any influence on the part of those affected."

The outcome of the appeal process will be significant for the rent cap, and whether the consideration of location and facilities provided there, the exception of new buildings, the dynamization according to the real wage development (which, however, does not compensate for inflation, because the real wage is the wage development minus the inflation) ) and its protective purpose lead the judges to a different judgment.

Bavarian Constitutional Court on legislative competence

On July 16, 2020, the Bavarian Constitutional Court rejected a referendum calling on the Bavarian state government to introduce a rental price brake under state law as inadmissible. The reason given was that the federal government had already made extensive use of its competing legislative competence in the area of tenancy law and that the Free State of Bavaria was therefore "obviously" lacking legislative competence. Because of the peculiarities of the examination procedure, the unconstitutionality had to be determined “without reasonable residual doubts”;

Proceedings pending in constitutional courts

On March 12, 2020, the Berlin Regional Court decided on appeal to submit the MietWoG Bln to the Federal Constitutional Court for a specific review of norms in accordance with Article 100, Paragraph 1 of the Basic Law. From his point of view, the State of Berlin lacks the necessary legislative competence, which is justified with references to the report by Hans-Jürgen Papier, a statement by the Scientific Service of the Bundestag and publications by Herrlein / Tuschl and Dierk Stelzer , among others .

On May 6, 2020, members of the parliamentary groups of the FDP and CDU / CSU requested the implementation of an abstract norm control procedure according to Article 93, Paragraph 1, No. 2 of the Basic Law against the Berlin rent cap. In addition, the members of the CDU and FDP parliamentary groups in the Berlin House of Representatives applied for an abstract judicial review procedure against the rent cover to be carried out at the Constitutional Court of the State of Berlin on May 25, 2020 .

On March 25, 2021, the Federal Constitutional Court made a uniform decision on the norms control procedure. The MietWoG Bln was declared unconstitutional and null and void. There is no legislative competence of the State of Berlin in the context of the competing legislative competence of Article 74, Paragraph 1, No. 1 of the Basic Law, since the federal legislature has finally made use of its legislative competence for rental price law in the civil code through the provisions in § 556 to 561 BGB.

Furthermore, numerous constitutional complaints from private landlords against the rent cap are pending at the Federal Constitutional Court . Because of the general interest of society as a whole, the complainants did not have to exhaust the legal process for this.

Inconsistent case law of the tenant law appellate chambers of the Berlin regional court on rent increase requests

The ambiguities associated with the MietWoG can also be seen in the previous Berlin case law at local and regional courts. There you have to deal first with ongoing rent increase disputes. The regional court's tenancy law appeals chambers represent a colorful bouquet of views: The 67th chamber always sees the MietWoG as an obstacle to the landlord's claim to consent to the rent increase, regardless of when the rent increase in dispute should take effect. However, the law itself is unconstitutional, so the Chamber has appealed to the BVerfG and is suspending the proceedings (see, inter alia, resolution of August 6, 2020 - 67 S 109/20). The 66th Chamber believes that rent increases with effect from February 23, 2020 (when the law comes into force) are in any case not prohibited by the law, whereas the Chamber does not impose an unconstitutionality (see judgment of June 24, 2020 - 66 S 95 / 20). The 65th Chamber, in turn, grants rent increase claims (based on BGB law) even if the increase and / or increase effect dates after the MietWoG came into force, because the MietWoG, regardless of whether it is constitutional at all, does not prohibit the agreement of a higher rent in any case. A legal right to consent to the rent increase also exists if the payment of the same should initially not be enforceable because the MietWoG should be constitutional (see, inter alia, judgment of July 31, 2020 - 65 S 71/20). For tenants and landlords, this unclear situation means potential for controversy and considerable legal costs, even below the constitutional level.

Individual evidence

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