What is the Mietpreisbremse? A lot of tenants call us and ask me what this “rent cap” or
“rent brake”, the “Mietpreisbremse” is.
Housing shortages and the resulting sharp rise in rents, especially in conurbations, have become
increasingly acute in recent years. The so-called Mietpreisbremse is intended to at least limit the
increase in rents. But what actually is the Mietpreisbremse and what conditions are it subject to?
In the following, we will give you an overview of what the Mietpreisbremse means for you as a tenant
or also as a landlord and how it is applied.
Since when has the Mietpreisbremse existed and what has it regulated since then?
On 01.06.2015, the law “to curb rent increases in strained housing markets”, known as the Mietpreisbremse (rent brake), came into force. Since then, it has been intended to limit the uncontrolled increase of rents in areas with a particularly strained housing situation. According to § 556d of the German Civil Code (BGB), the rent at the beginning of a tenancy may not exceed the local comparative rent by more than 10 %, unless there is an exceptional circumstance.
Until when does the Mietpreisbremse apply?
The Mietpreisbremse was initially intended to apply for five years. On 14 February 2020 it was extended for another five years, until 31 December 2025 at the latest. The extension has been in force since 1 April 2020.
What are the exceptions to the Mietpreisbremse?
1. new buildings and flats let for the first time after 01.10.2014
However, the rent brake does not apply without restrictions. Section 556f of the German Civil Code (BGB) contains a number of exceptions in which the rent limit of up to 10% above the standard local comparative rent does not apply. For example, new buildings and flats rented for the first time after 1 October 2014 are such exceptions and are not covered by the Mietpreisbremse.
2. higher previous rent
In addition, the Mietpreisbremse cannot be applied if the previous tenant already had to pay a higher rent than the standard local comparative rent. It should be noted here that this exception cannot be applied to rents that were increased up to twelve months before the Mietpreisbremse came into force. The so-called grandfathering therefore only applies to the basic rent agreed before this period.
3. comprehensive refurbishments
The rent brake also does not apply to flats that have been extensively renovated or modernised in accordance with Section 556f sentence 2 of the German Civil Code (BGB). However, you should pay attention to the ruling of the Federal Court of Justice (BGH) of 11.11.2020 – VIII ZR 369/18, by which the requirements for comprehensive modernisations, which are required according to the wording of the law, are defined more precisely.
It is required that the flat has been improved in several essential areas in such a way that its condition can be equated with that of a new building. Consequently, minor renovation or modernisation work is not sufficient as an exception to the rent brake. In this case, the landlord is allowed to charge a rent that is higher than the limit set by the Mietpreisbremse, but only as high as he would have been able to charge in an existing tenancy, i.e. up to 8 % of the modernisation costs. As a landlord, however, you have to distinguish between modernisation and comparative rent.
What effect did the amendment of the tenancy law as of 01.01.2019 have on the Mietpreisbremse?
The reform of tenancy law in 2019 also resulted in changes with regard to the Mietpreisbremse. According to Section 556g of the German Civil Code (BGB), landlords must now disclose in writing, without being asked, how much rent was charged by the previous tenant when the tenancy agreement is concluded. Previously, it was criticised that it was almost impossible for tenants to find out what rent the previous tenant was obliged to pay. In addition, if the landlord intends to agree on a rent that is more than 10% above the local comparable rent, he must disclose on the basis of which exception rule the increased rent is lawful. If he does not do so, he cannot rely on such an exception rule in a potential later legal dispute.
What changes have resulted from the tightening of the law as of 01.04.2020?
On 01.04.2020, the Mietpreisbremse as a whole, which for the time being was only supposed to apply until 2020, was extended by another five years, i.e. until 2025. In addition, the Mietpreisbremse was tightened in certain points. Section 556g of the German Civil Code was amended accordingly. For tenancies existing after 01.04.2020, tenants can also claim back overpaid rent retroactively. This repayment relates to the entire overpaid rent from the beginning of the tenancy. However, this only applies on condition that the tenant has complained about this within the first 30 months, i.e. two and a half years after the beginning of the tenancy. For tenancies that already existed before 01.04.2020, however, this complaint only applies to the future, so tenants can only claim back the overpaid rent from the time of the complaint.
How do I determine the local comparable rent?
The rent increase up to the local comparable rent is regulated in § 558 BGB. The basis for this is the rent index of the respective city or municipality. However, there is no obligation for cities or municipalities to draw up a rent index, which is why an expert opinion on the local comparable rent is drawn up in such cases. The characteristics that usually determine the local comparative rent are the location, size, furnishings, type and condition of the flat.
Does the Mietpreisbremse also apply in Berlin?
Berlin has been applying the Mietpreisbremse since 1 June 2015. With the expiry of the first five years, the state of Berlin extended the Mietpreisbremse on 01.06.2020 for a further five years. It is therefore currently valid until 31.05.2025.
How do I calculate the local comparable rent in Berlin?
The local comparable rent in Berlin is calculated according to the Berlin rent index. You can check the rent index for your flat directly online on the website of the Senate Department for Urban Development and Housing. In the article: Berliner Mietspiegel 2021 – Wie bestimme ich die Miete? we also give you useful tips on how to calculate your personal rent index in detail. As a law firm specialising in tenancy law, however, we can best advise you on this in person. This also makes sense because the application of the rent index in practice depends on the respective court. For example, the 63rd Chamber of the Berlin Regional Court does not apply the rent index at all, but always requires an expert opinion on the local comparative rent.
What should you consider as a tenant with regard to the Mietpreisbremse?
First of all, as a tenant you should check whether the Mietpreisbremse applies in your city or municipality at all. In addition, you should always keep an eye on all possible exemptions, i.e. new construction, protection of existing buildings or comprehensive modernisation. For this, we recommend consulting a lawyer for tenancy law who can explain to you in detail whether you are actually paying too much under the Mietpreisbremse. If this is the case, you must first give written notice to the landlord in accordance with Section 556g (2) of the German Civil Code (BGB) so that you can claim back overpaid rent (also retroactively).
What should you consider as a landlord with regard to the Mietpreisbremse?
As a landlord, you should also be aware of the possible exceptions to the Mietpreisbremse. If a significantly higher rent than the comparative rent was already agreed for the flat you are renting before the Mietpreisbremse came into force, the so-called Bestandsschutz (grandfathering) applies and you are not obliged to reduce the rent retroactively.
Furthermore, if you as a landlord want to agree on a rent that is more than 10% above the local comparable rent, you should disclose the exception you are invoking to the tenant when concluding the tenancy agreement. Otherwise, you may not be able to invoke this exception in court proceedings (see Section 556g (1a) sentence 2 BGB).
Rechtsanwalt und Fachanwalt für Miet- und Wohnungseigentumsrecht
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