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How does the Mietendeckel affect you?

RENT FREEZE! Whether you're a tenant, subletting, a landlord, prospective landlord or thinking of buying a property in Berlin, we've got the lowdown on how the Berlin Mietendeckel will affect you.

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Photo by Ollie Cool from Pixabay. EXB Mietendeckel expert Joel Dullroy explains how the rent freeze affects you.

If you’re a tenant

Rejoice! Your rent is now officially frozen. Your next rent increase may come in 2022, when landlords can add 1.3 percent due to inflation. And your current rent could decrease, if you are paying 20 percent above the new legal limits. Additional costs for furnished flats, short-term leases and extra services can no longer be added. Only properties built after 2014 are exempt from the cap. Your landlord is now obliged to send you a letter telling you the age and condition of your building so you can check the correct rate. If you’re paying too much, you’re entitled to a reduction as of November 2020. But careful – lawyers of Wenigermiete.de advise that tenants keep paying current rents until the court cases around the legality of the cap are resolved, but add “Zahlung unter Vorbehalt” to their bank transfers to reserve the right to eventually claim back-payments. In the meantime you may already be entitled to a rent reduction under the existing rent cap (the so-called Mietpriesbremse) which is legally solid. Join a tenants’ association or use wenigermiete.de to check.

If you’re subletting

The Berlin Senate says the Mietendeckel also applies to sublets, including rooms in shared flats. Main tenants have the same obligations as landlords. Your rent should be based on your room size and share of common spaces, and shared costs for utilities.Your main tenant is obliged to pass on information about the rent freeze and possible reductions. If comradely discussions fail, soon you can go to the Bezirksamt for advice. Cheating subletters may face big fines.

If you’re a landlord

Tread very carefully. You’re now liable for a fine of €500,000 if you step out of line. And don’t count on the constitutional court cases – the Mietendeckel is effective immediately and until decided otherwise.

For new contracts, you can now only charge the maximums listed in the rent cap table (from €3.92/sqm to €9.80/sqm). For existing contracts, you can charge 120 percent. Renovations according to strict criteria may allow an additional €1/sqm. Charges for furnishings, limited tenancies and extras are no longer permitted. You’ll soon be obliged to inform your tenant about the age and condition of your building. Legal opinions about how to formulate this letter differ. Berlin’s biggest property owners association, the BBU, is advising members to proactively reduce rent to avoid fines. You may need to lawyer up. For advice and support, you could join a landlords association such as Haus & Grund.

You can still use AirBnB, but only if you are registered with the Wohnungsamt – and acceptance is not automatic. Keeping your property vacant for more than three months leaves you liable for a fine. You could choose to move into your own flat, but will have to give your tenants a notice period of up to 10 years. Be careful about striking handshake deals for extra rent. Your tenant could turn on you at any time and report you. Merely receiving too much rent could make you liable for a fine.There are plenty of people offering tips to skirt the law. Use your own moral compass to decide what to do: fight, evade and risk a fine, or play safe and wait it out.

If you want to rent a flat

Congratulations! You’ve struck the jackpot. New rental contracts are now capped at bargain prices. All those overpriced ads are invalid. You can’t legally be charged more than €9.80/sqm (plus around a euro, depending). Furniture is now included and short-term leases are the same as long ones. Better still, you can accept an overpriced contract, move in, and then immediately cut your rent to the legal maximum. If you’ve agreed to a grey market handshake deal, you’re safe but your landlord is in trouble. You can report them to the Bezirksamt, and they could be fined €500,000. The only problem is finding a flat! As you’ve probably already noticed, properties are as desired as Levi jeans were in the GDR. This could get worse as more owner-occupiers buy up empty flats. City-owned housing companies are building new properties, so get on a waiting list on www.inberlinwohnen.de. Try joining a housing cooperative, or Wohnungsbaugenossenschaft, but also expect waiting lists. Why not swap Kreuzkölln for a place outside the Ringbahn? Nowhere is cool until someone makes it so. And thanks to the rent freeze, you can’t be accused of gentrification.

If you want to buy a flat

The forecast for apartment prices this spring is as patchy as April weather. Some predict massive reductions as terrified investors dump their underwater assets. Others foresee skyrocketing prices for certain property types. There’s a big difference between occupied and unoccupied properties. According to Hypofriend, a credit broker, prices for flats with existing tenants are expected to remain stable, with possible reductions on less-desired one and two-room properties. But empty flats are in hot demand and expected to stay so. New-build flats will likely increase in value, as they are exempt from the rent cap. If buying as an owner-occupier, you can legally evict an existing tenant, though expect a lengthy process. Tenants may be entitled to a notice period of up to 10 years and some can challenge own-use evictions if they are old or ill – don’t forget, there’s a human behind every contract. If in a hurry, you could pay the tenant to leave, but make sure it’s legally solid.

Check out our new podcast series Rent Freeze for everything you need to know about the Mietendeckel. Episode #1: The Experiment available now!