Berlin rent cap declared unconstitutional
On January 30, 2020, the Berlin Senate voted to introduce a rent cap in Berlin. The rent cap came into effect less than a month later, on February 23. Germany’s Constitutional Court has now delared that the Berlin rent cap is null and void. According to the court, the fact that the federal government has already passed legislation affecting rents eliminates the possibility for states to introduce their own, competing, regulations. The court found that since the federal government had introduced its own rental price brake in 2015 and thereby established its exclusive legislative powers in this area, state governments could not impose their own laws that infringed upon that. Thus, the Berlin rent cap therefore violates Germany’s Basic Law. The court upheld the constitutional complaint from the CDU/CSU and FDP and ruled that the state government of Berlin had indeed overstepped its powers.
Berlin’s rent control legislation, which was passed by the city’s tripartite left-wing coalition government, was unique in Germany and was due to expire in 2025. Around 1.5 million Berlin residential rents were frozen on February 23, 2020 – at the level of June 2019. Around 340,000 tenant households in the capital were affected. The controversial law created massive uncertainty in the Berlin housing market. If you have any questions about the Berlin rent cap or your property, our experts will be happy to advise you.
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