Rent freeze: Is selling the solution?
With its “regulations of the law for the reorganization of legal regulations for rent price limitation” the senate plans a heavy interference into the rights of landlords. The law, which is commonly referred to as “rent freeze”, is supposed to apply only temporarily for a period of five years – but so should have also the rent cap and the solidarity clause (Soli). This provision is connected to a rent table, which list the upper limits for rents in different suburbs across Berlin. It foresees maximum rates of 7.19 euros per square meter for example for apartments from the Gründerzeit period at Kurfürstendamm, while apartments from the reconstruction period with a view to Gendarmenmarkt may not cost more than 6.82 euros per square meter. It is the Senate’s intention that no return can be achieved as a result – but it is extremely questionable whether the costs for the management of the property can be covered at all with a rent this low, and applying for the provided hardship provision is tedious and time-consuming, with an uncertain outcome.
Irrespective of the discussion as to whether this law is constitutional at all, the rent freeze already works – as an anti-investment blocker. Although new buildings are exempt from the rent freeze, at some point the apartments built today will no longer be new and could be included in such regulations. In addition, investments in existing properties will be postponed, as the question of rent rates remains completely unclear. The most serious effect, however, is the loss of confidence in this senate, which manoeuvres hundreds of thousands of decent landlords into an administrative offence.
What do I do when my condo becomes vacant?
Instead of dealing with capped rents now, there is a simple way out: sell your condominium rather than renting it out. If the rented apartment is vacated, owners should consider carefully whether they want to be capped or whether the sale of the condominium might make more sense at the present time. Because by the reduced renting revenue, renting could soon no longer be profitable. We have also already seen a significant increase in sales of residential and commercial properties in Berlin.
Are you also considering selling your property? We will be happy to evaluate your property – of course free of charge and without obligation.
Or use our free online appraisal tool to find out the value of your property.
Selling is not a solution for me – what can I do?
If the sale of your apartment is not an option for you, we can only recommend that you seek comprehensive legal advice in order to avoid the pitfalls of the rental freeze. After all, if you violate the provisions of the law, you may even be subject to a fine.
In addition, there is the possibility of actively resisting the Berlin Senate’s plan and lodging a constitutional complaint with the Federal Constitutional Court in Karlsruhe. As a contact person, we can recommend Nina Herbillon, attorney at law from the law firm Nicklass & Herbillon, Am Borsigturm 53, 13507 Berlin, who will be happy to answer any questions you may have by sending an e-mail to firstname.lastname@example.org