A Berlin landlord has lost a challenge at the Federal Constitutional Court against the extension of rent control measures. The court found no violation of fundamental rights. The case concerned the 2020 extension of the rent control, which was decided in the summer to last until the end of 2029, allowing state governments to designate areas where rent increases upon re-letting are limited. The Berlin Senate had declared the entire city of Berlin to be an area with a tight housing market.
According to the Federal Constitutional Court, the landlord had successfully sued her tenants for the repayment of overpaid rent. She had demanded this repayment despite the fact that the apartment she rented out fell under the rent control regulations in Berlin. She is a landlord of multiple apartments and commercial units in Berlin. The Higher Regional Court confirmed the illegality of the excessive rent and the validity of the requested repayment in December 2024. The Federal Constitutional Court now dismissed the landlord’s appeal against this decision as unfounded.
In areas where the rent control applies, landlords may charge a maximum of ten percent more than the local comparable rent when re-letting a property. The aim of the control is to protect people from displacement from areas with high demand. Due to the shortage of housing in many urban areas, those with lower incomes otherwise have little chance of remaining in their neighborhoods when landlords increase rents.
Court Sees Protection of Legitimate Rights
The Federal Constitutional Court rejected the complaint because it found no fundamentally different situation than when the rent control was first introduced. Rents continue to rise upon re-letting, even without renovations, and are increasingly exceeding existing rents. This means the rent control meets the requirements of proportionality to the extent that it interferes with property rights. “The legislature pursues the legitimate goal of slowing down the increase in rents in tense housing markets and thus counteracting the displacement of less well-off population groups from sought-after residential areas,” the court’s reasoning states.
The judges thus agreed with the federal government, which argued that landlords still have the opportunity to implement “factually substantial rent increases because prospective tenants have no alternative options.” It only prevents landlords from realizing profits that result solely from the specific situation of a tense housing market. This balances a structural imbalance between tenants and landlords in tense housing markets. In this specific case, the judges also stated: “The Berlin Rent Control Ordinance of May 19, 2020 is also compatible with the constitution.”
The rent control was first introduced in 2015 and was valid for five years. It was extended until 2025 in 2020. Last year, the Bundestag extended it again until 2029. Many believe the price brake does not head far enough due to the numerous exceptions. The majority of people in Germany live in rented apartments.
Frequently Asked Questions
What was the outcome of the case before the Federal Constitutional Court?
The Federal Constitutional Court rejected the complaint of a Berlin landlord against the extension of the rent control. The court found no violation of fundamental rights.
What is the purpose of the Mietpreisbremse?
The purpose of the rent control is to protect people from displacement from areas with high demand for housing. It limits the amount landlords can increase rent upon re-letting a property.
Until when is the current rent control valid?
The rent control was extended until the end of 2029.
As rent control measures continue to be debated and adjusted, how might these policies evolve to address the complex challenges of housing affordability and availability in Germany’s urban centers?
