Engel & Völkers Licence Partner Commercial Berlin > Blog > Rent price cap update: implementation regulations clarify ambiguities in the law

Rent price cap update: implementation regulations clarify ambiguities in the law

On 17 April 2020, the Senate Department for Urban Development and Housing published implementation regulations for the “Act on the New Regulation of Statutory Provisions on Rent Limitation” (MietenWoG Bln), known as the rent price cap (Mietendeckel) in the Official Gazette for Berlin. These expand on questions of interpretation regarding the rent price cap and define the framework within which the administration can operate. The implementation regulations are not binding for courts. The level of fines is also specified. 

We have summarised the main contents of the implementation regulations for you. You can find the full text of the publication here (only available in German).

The implementation regulations for the rent price cap:

In the case of social housing which no longer falls under IBB commitment, the “last” agreed rent applies

In accordance with Art. 1 MietenWoG Bln, the law does not apply to publicly subsidised housing, as long as occupancy or rent control stipulations are in place.

The rent cap applies to social housing that is no longer subject to occupancy or rent control stipulations. In this case, the last rent agreed in the commitment period is to be used as the basis, not the rent on the effective date.

In the case of commercial space that has been converted and rededicated as living space, the first-time occupancy counts as housing

Permanently uninhabitable and unoccupied former living space which has been restored for residential purposes with an effort and cost corresponding to that of new construction, and whose restoration took place after 1 January 2014, shall be classified as new construction in accordance with the implementation regulation. The prerequisite is a certificate of uninhabitability issued by the competent district authority, which must have been authorised prior to the construction measures. After completion of the restoration work, evidence of the costs of the construction measures must be provided.

This exception applies not only for the initial letting, but for all provisions of the law.

Commercial space that has been converted and rededicated as living space at considerable expense is also excluded from the rent cap.

Definition of rent: gross rental contracts must be “netted”

In the case of rental agreements in which no net base rent has been agreed, the landlord must, if required to do so and at the request of the competent authorities, provide tenants with the precise net base rent amount along with the data used for the calculation basis.

Until further notice, the residential location is defined by the address list of the 2019 Berlin Rent Index

The law adds surcharges or discounts according to the residential location:

  • Simple residential location -0.28 cents/sq. m monthly
  • Medium residential location -0.09 cents /sq. m monthly
  • Good residential location +0.74 cents /sq. m monthly

Until a map with official classification of Berlin’s residential areas is issued, the residential area can be determined on the basis of the address list from the 2019 Berlin Rent Index.

Definition of modern amenities:

According to the rent cap law, the rent ceiling is increased by 1 euro if the living space is equipped with modern amenities. Relevant here are supplementary amenities provided by the landlord. The living space is considered to have modern amenities if it has at least three of the five following characteristics:

• Passenger lift, accessible without thresholds from the flat and from the building entrance

The passenger lift must be accessible without thresholds from the flat and from the entrance to the building. The criterion is that there are no insurmountable barriers for a wheelchair or wheeled walker. Thresholds with a maximum height of 2 cm are permissible. There may also be more than one barrier, each of which may only have a maximum height of 2 cm and the barriers may not be directly behind one another.

• Fitted kitchen

A fitted kitchen includes upper and lower cupboards, stove or hob and oven, extractor hood and sink.

• High-quality sanitary equipment

The sanitary equipment in the bathroom and lavatory (bathtub, shower and washbasin, including fittings, and toilet) must be of high quality. “High-quality” refers to the material quality and elaborate craftmanship as well as the price. Special designs (e.g. round or corner bathtub, whirlpool) also indicate high quality.

• High-quality flooring in the vast majority of living spaces

“High-quality” refers to the superior quality of the products used (for example, high abrasion resistance and/or impact resistance, structure or thickness in the case of parquet) and price. The corresponding flooring – high-quality parquet, natural stone, artificial stone, tiles or equivalent flooring or floor covering – must be clearly distinguishable from a standard floor covering in this respect and must be present in more than 50% of the living spaces (not including kitchen and bathroom/lavatory).

• Energy consumption value of less than 120 kWh/(m²a)

The energy consumption value must be less than 120 kWh/(m²a). The value refers to energy for heating and hot water. In case of decentralised hot water supply, 20 kWh/(m²a) shall be added to the declared energy value.

The use of energy demand values is not stipulated in the Berlin rent price cap. However, specifications can be found in the implementation regulations:

In providing the final energy demand value, the energy consumption value limit is to be increased by 20%. In this case a limit value of 144 kWh/(m²a) applies, which may not be exceeded.

The landlord is responsible for providing proof.

When re-letting residential space after modernisation, no “double” increase is allowed due to modern amenities

If residential space is re-let after modernisation, the permissible rent ceiling is increased by a maximum of 1 euro/sq. m in total. The five modern amenity criteria mentioned above may not be additionally apportioned (so as to avoid an increase of the upper rent limit by up to 2 euros/sq. m).

The following modernisation measures are apportionable (in accordance with Art. 7 MietenWoG Bln):

  1. those measures to which landlords are obliged by law
  2. for thermal insulation of the building envelope, basement ceiling, top floor ceiling or roof
  3. for the use of renewable energies
  4. for energy-efficient window replacement
  5. for heating system replacement with heating optimisation
  6. for the removal of barriers through threshold removal, door widening or bathroom conversion.

Rent increase of 1.3% from 2022 must be in line with the German Civil Code

From 2022, the rent cap law allows rent adjustments of up to 1.3% annually. The implementation regulations emphasise that there is no legal right to an increase. Instead, any rent increase must be levied in accordance with the German Civil Code. If the landlord does not comply with the provisions of the German Civil Code, the rent increase may be inadmissible in individual cases, even if the MietenWoG Bln provides for an annual increase of up to 1.3%.

Contact us now
Engel & Völkers
Licence Partner Commercial Berlin
  • Joachimsthaler Straße 1
    10623 Berlin
  • Fax: +49 30 203461346

Opening hours:

Mon - Fri from 9 am to 6 pm

We know the true value of your property

Do you know how much your property is currently worth? No matter if you just want to inform yourself about the current market-price, or if you wish to sell your property for the best price: our experienced marketing experts are happy to assist you with a free and non-binding valuation.

Follow us on social media