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Berlin Rent Freeze(Mietendeckel) Overturned By the Courts – What Next?

Lawmakers in Berlin have tried to put a stop to the outrageous prices Berliners are paying for rent. The federal court in a ruling has overturned this move by the city of Berlin. The Mietendeckel has helped a lot of people, especially in the pandemic. Now there is fear of a wave of evictions and bankruptcy.

What do Berliners do now?

Berliners whose rents reduced, should expect to be paying the full rent amount from May.

Also if your rent contract has a clause in it that states that you have to pay arrears pending the decision of the courts, you have to. Effectively, all money saved during the time of the rent freeze will have to be paid back to landlords.

If you cannot afford to pay the full amount, it is advisable to talk to your landlord or real estate company. You can get an agreement to pay the arrears in installments.

Vonovia has announced following the ruling, it will not be taking arrears from tenants

What if I do not pay?

Landlords until further actions are taken, will be able to evict tenants who refuse to pay. There are hopes that the city will step in to offer some kind of relief for the people affected by this ruling.

What Next?

Regulation by the federal government

This legislation was passed on the state level(Land). Per the court ruling, it is unconstitutional for the state to pass this kind of legislation.

However, the federal government(Bund) would have the authority to regulate rent. Hopefully, the federal government will take steps to tame the rising rents.

Expropriation – Enteignung

There have also been discussions around taking properties back into the custody of the state. This is constitutional. The caveat is that property owners have to be compensated in this process. How much the compensation is to be paid is as of now not clear. This will need to be decided by the courts.

If compensations are too high, the open question has been if it makes sense to put that money to new housing projects.

Keep checking this space. We will keep you updated!

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