Discover what the law suggests for Berlin residential or commercial property owners and proprietors in our FAQ.
For which flats does the rent cap apply?
Rent cap regulations use to non-public housing. Excluded from the regulations are openly subsidised housing, social well-being flats, flats in halls of house and freshly constructed flats that were first ready for tenancy on 1 January 2014 or that have actually been restored for domestic purposes from uninhabitable and vacant former living space that was converted at an expense commensurate with a brand-new building.
Commercial space that has been transformed and rededicated as living area at considerable expense is likewise excluded from the lease cap.
The lease cap uses to social housing which no longer falls under IBB commitment. In this case, it is not the rent on the efficient date, but the last lease concurred in the commitment duration that is to be used as the basis.
The law states "rent in accordance with the rent cap" - what does that indicate?
According to Art. 3 (4 ), lease in accordance with the rent cap suggests the net base lease (not including running costs and energy expenses for heating and warm water), however including all additional charges for furnishings and furnishings.
In rental agreements in which no net base lease has actually been agreed, the landlord must, if needed to do so and at the request of the proficient authorities, supply tenants with the accurate net base rent quantity along with the data utilized for the calculation basis.
For how long is the rent cap valid?
Can I still increase the lease now?
The key date for the "freezing" of the lease is the date of the Senate resolution on 18 June 2019, i.e. after the law enters into force, the baseline for a re-letting is the lease that worked on the essential date.
In principle, the very same level of rent can be concurred with the next occupant. However, this is only allowable if it does not surpass the upper rent limitations under Art. 5 MietenWoG.
If the flat was not rented on the key date of 18 June 2019 or if a tenant modification has actually happened in between the essential date and the effective date of the law, the lease accepted throughout this duration will be "frozen".
How much rent can I charge as a proprietor? In order to identify the upper rent limits, the leas listed in the 2013 Berlin Rent Index were upgraded to reflect genuine wage development till 2019. The upper lease limits are stemmed from the table in the lease cap law and are finished according to constructing age classes and facilities. Surcharges are likewise permitted. For flats with modern-day facilities, the ceiling is increased by 1 euro. Relevant here are only those features provided by the property manager. According to the law's lease table, modern features exists if the home has at least three of the five following characteristics:
The lease ceiling is also increased by an additional charge of 10% if the domestic area lies in a building with no more than two flats. So for the estimation of the permissible rent: rent ceiling according to the rent table + additional charges listed above.
You can discover comprehensive meanings of the 5 contemporary amenity requirements, as stipulated by the Senate Department for Urban Development and Housing lease cap implementation guidelines, in our checklist for owners and property owners.
How much rent can I charge if I re-let the unit?
If the property system is re-let after the law enters into force, the law forbids taking a higher lease than the lease that has actually been "frozen". If the frozen rent is greater than the applicable upper rent limitation (see lease table), the system may just be let at the statutory lease limit. If required, surcharges for modern facilities and modernisation steps can be taken into consideration in the lease ceiling. When it comes to flats whose previous lease was less than EUR 5.02 per square metre, the lease may be increased by a maximum of EUR 1 approximately EUR 5.02 per square metre upon re-letting if contemporary facilities are offered. Modern features exists if the living area has at least 3 of the 5 following qualities:
- Passenger lift, available without thresholds from the flat and from the structure entryway
- Fitted kitchen
- High-quality sanitary devices
- High-quality flooring in the bulk of spaces
- Energy intake value of less than 120 kWh/( m TWO a)
When is a rent considered excessive and when can it be reduced?
A rent is considered excessive and is for that reason forbidden if it is more than 20% above the appropriate upper rent limit in the rent table, taking into account the domestic area.
Appropriate additional charges and deductions are also relevant:
- Flats in a simple suburb -0.28 euros - Flats in a medium suburb -0.09 euros
- Flats in a great residential location +0.74 euros
Are modernisations still possible? To what degree can they be assigned to the rent?
Certain modernisation measures and their apportionment to the lease are allowed approximately an optimum of EUR 1.00 per square metre. This limitation also uses in case of numerous modernisations throughout the law's credibility duration. The requirement is that property owners notify the Investitionsbank Berlin (IBB) of increased rent based on modernisation steps. The IBB is using an online notice treatment. You can send a modernisation notice here.
Please note that when re-letting domestic space after an apportionable modernisation, the 5 modern facility criteria discussed above may not be furthermore allocated (in order to avoid a boost of the upper lease limitation by as much as 2 euros/sq. m).
Which modernisations are allowed?
Apportionable modernisation measures are those to which property managers are obliged by law:
- For thermal insulation of the structure envelope, basement ceiling, leading floor ceiling or roof - For making use of renewable resources
- For energy-efficient window replacement
- For heating unit replacement with heating optimisation
- For the addition of a lift
- For the removal of barriers through limit elimination, door widening or bathroom conversion
What alternatives do I have as a residential or commercial property owner if the permissible rent leads to losses or to a threat to the building structure in the long term?
In exceptional cases, the IBB can approve a higher allowable rent. The requirement is the presence of excessive economic challenge. This is particularly pertinent if keeping the acceptable lease would result in permanent losses for the landlord or threaten the building structure over the long term.
A loss is considered to exist if surpass earnings for the appropriate business entity. A risk to the building structure exists if the income from the residential or commercial property is no longer adequate for its upkeep.
It must be kept in mind that economic difficulty can only be thought about if the challenge is caused by the lease cap law. Undue financial hardship is likewise just valid if its event does not lie within the sphere of obligation of the property owner. In other words, expectations of gratitude in value, anticipated returns, rising funding costs outside regular market conditions, anticipated returns based on excessive rents and losses arising from the department into business entities do not make up a case of challenge.
You can send a hardship application to the IBB here.
What information obligations do I have as a property manager?
Landlords need to supply renters with details on the scenarios relevant to the calculation of the rent ceiling within two months after the law coming into force and likewise before the conclusion of a new rental contract, without being requested to do so. Landlords must inform tenants of the amount of the crucial date lease on 18 June 2019 upon request. Prior to the signing of a new lease, property owners should notify future renters of both without being asked.
You can find details of the info commitments under the rent price cap in our list for residential or commercial property owners and landlords.
How are infractions penalized?
A fine of approximately 500,000 euros might be imposed for offenses of the rent rate cap.
Where can I find more info?
At www.engelvoelkers.com/mietendeckelberlin you can discover regular updates on the rent price cap.
Do you have further questions?
We would be pleased to recommend you! More than 50 realty professionals for the Berlin property and commercial residential or commercial property market are readily available to you for more information at any time face to face, by telephone or by e-mail.
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Everything about the Berlin rent price cap:
This implies the lease rate cap
Rent rate cap calculator
Obligations for property managers
Disclaimer: This post is meant entirely as general, non-binding info and must not change comprehensive research study or professional guidance. Although this short article has actually been prepared with the biggest possible care, there is no claim to accurate precision, efficiency and/or topicality. The specific scenarios of the private case need to always be taken into account. The usage of info consisted of in this short article is the sole responsibility of the respective reader. Any liability on the part of Engel & Völkers Gewerbe Berlin GmbH & Co. KG and/or another Engel & Völkers licensee is omitted.
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