The German government has announced that the country’s rent brake (Mietpreisbremse) will be extended until 2029. What does the decision mean for tenants?
It was scheduled to expire in 2025, but this week Germany’s coalition government announced that the rent brake law will stay in place until 2029.
The rent cap was first introduced by the CDU-led grand coalition in 2015, to prevent rents in popular residential areas from going through the roof.
In areas “with a strained housing market” - as defined by local authorities - rents are not permitted to be more than 10 percent higher than the standard comparable rent for new contracts. This is determined using the rent index (Mietspiegel). At the end of 2018, the rent cap was in force in 313 municipalities and cities in Germany, including Berlin, Munich, Frankfurt, Brunswick and Jena.
Under the law, if a landlord charges a tenant more than 10 percent more than the legal amount determined by the Mietspiegel, the tenant is entitled to a rent reduction and refund of any overcharged rent they have already paid.
While the brake has been extended, its scope will stay the same. This means that many kinds of tenants will remain unprotected.
At the moment, tenants who live in newly-built properties rented for the first time after 2014, modernised properties, properties rented for less than a year, properties where the rental contract was signed before the law took effect and those previously rented at an illegally high price, are not protected.
For the German Tenants Association (DMB) these gaps render the current law insubstantial. “Loopholes [...] urgently need to be closed up in the course of the extension,” DMB President Lukas Sibenkotten told Berliner Zeitung.
Alongside the DMB, other critics of the law point out that it has been ineffective at reducing rents or keeping them down since it was introduced in 2015.
Speaking to The Local, Daniel Halmer, CEO of Conny - a company which helps tenants secure rent reductions if they find they are being charged illegally high amounts - said that despite the existing law, 75 percent of Berlin tenants are paying too much each month.
“That has been pretty consistent over the last seven years,” Halmer told the website. “After the law was announced, [in 2015] some landlords took the opportunity to increase their rents before the legislation took effect.”
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