Rental Cap on Berlin Residences
The Berlin Senate, on 22 October 2019 decided to introduce legislation to stop the rental price development for residential properties (“Properties”) in Berlin for a period of five years. The Act on the limitation of rents (“Gesetz zur Neuregelung gesetzlicher Vorschriften zur Mietenbegrenzung”, the “Act“) is supposed to come in force in January 2020 and shall have a duration of five years. After certain restrictions on increases of residential property rents (“Mietpreisbremse”) introduced by the federal legislator in 2015, the Act, which affects approx. 1.5 million Properties in Berlin, goes far beyond federal legislation. It intends to freeze rents on the level effective 18 June 2019 (the “Reference Date”) and is estimated to allow up to 300,000 tenants to reduce their rents.
