Getting a rental agreement in Germany for Expats can be difficult, whether you’re moving into your first apartment, relocating, or downsizing. Find out if your apartment qualifies for rent freeze in Germany?
Are you looking for an apartment right now? Then you need good nerves. In metropolitan areas or university cities in particular, there is little affordable living space and a large number of applicants.
But: Thanks to the rent freeze in Germany, landlords in some cities are no longer allowed to charge excessive rents. We explain to you what that means for you and when you can save money with the rent freeze.
Where does the rent freeze apply?
The rent freeze does not apply everywhere in Germany. The individual federal states decide for themselves whether and in which cities the regulations for limiting rent should apply.
There are currently state regulations on rent controls in 12 of the 16 federal states. You can only invoke the brake if it is applicable in your city or municipality.
Some ordinances were ineffective because there was a lack of sufficient justification, as most recently the ordinance in Lower Saxony (LG Hannover, judgment of August 12, 2020, Az. 7 S 7/20). Even a just postponed justification, as provided by Hessen, is not sufficient (BGH, judgment of July 17, 2019, Az. VIII ZR 130/18).
If a regulation on the rent freeze is ineffective, landlords do not have to adhere to it. You can continue to charge excessive rents.
Even if tenants had to pay more rent than actually permitted due to the error in the regulations, they cannot claim the financial damage from their state. The Federal Court of Justice has rejected a tenant’s action against the State of Hesse on the grounds of so-called official liability (BGH, judgment of January 28, 2021, Az. III ZR 25/20).
In Schleswig-Holstein, the rent brake applied in twelve municipalities. The regulation was repealed early one year before the planned expiry date in November 2020. The ordinances are to expire in all federal states by the end of December 31, 2025 at the latest.
How does the rent freeze work?
In cities with a tight housing market, landlords can no longer ask for the rent they want when they change tenants. A maximum of 10 percent above the local comparative rent is permitted.
An example: The previous rent for the apartment was 7.50 euros per square meter. Comparable apartments achieve prices of up to 10 euros. The local comparative rent is 8.50 euros. If the apartment is now to be rented out again, the landlord may charge a maximum of 9.35 euros per square meter.
So, the landlord has to know whether his rent is higher than the local one and how much he can ask in order not to experience a nasty surprise later. The upper limits drawn by the rent freeze are mandatory.
As a tenant, after signing the rental agreement, you can complain that the agreed rent is too high and, if necessary, reduce your payments – i.e., during the current tenancy.
Anyone who, as a tenant, starts asking critical questions about the rent level at the first meeting often has no chance of getting the apartment. It is all the more important that you as a tenant know your rights.
After signing, it is always worth checking the rental agreement. You can save a lot – and act in the interests of all other tenants.
Important: There is no supervisory authority that you as a tenant can contact. The rent freeze tool only works if you watch over it yourself and complain that the rent is too high.
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When does the rent brake not apply?
In order to keep the construction of new apartments and modernization attractive for the owners, there are essentially four exceptions to the rent brake. They all have one thing in common: If a landlord wants to invoke this, he has had to inform his tenant without being asked since January 1, 2019 that the regulations do not apply to the apartment (Section 556g (1a) BGB).
1. Landlords enjoy grandfathering
If your previous tenant has already paid a high rent, it stays that way, even if that is more than allowed under the rent brake. Your landlord can still demand at least the pre-rent, but no longer (Section 556e, Paragraph 1 BGB).
Condition: Your landlord must inform you about the amount of the pre-rent before signing the rental agreement – at least in an email (§ 556g Paragraph 1a No. 1 BGB). If your landlord notifies you in writing or by e-mail after the contract has been signed that the pre-rent was already so high, you as a tenant are still protected for two years: You don’t have to pay more than 10 percent above the rent index; only then do you have to pay as much as agreed in the contract and what your previous tenant has also paid (§ 556g para. 1a sentence 3 BGB).
2. Rental of new buildings
In the case of new buildings, landlords are free to set the rent without having to observe the rent brake (§ 556f sentence 1 BGB). However, new tenants must inform them that the apartment was used and rented for the first time after October 1, 2014 (Section 556g Paragraph 1a No. 3 BGB). Oral information is not enough.
3. Comprehensive modernization
Even after extensive modernization’s, the rent brake does not apply. The prerequisite for this is that the modernization costs are around a third of what a comparable new apartment would cost.
The installation of insulating glass windows, for example, is not enough. This exception only applies to the first rental after the modernization (§ 556f sentence 2 BGB).
So if there was already a previous tenant after the renovation, it is the second rental. The landlord is then bound by the rent brake and may only demand the rent that the previous tenant paid. As a rule, however, this should be well above the rent index.
Before signing the rental agreement, the landlord must clearly tell the new tenant that it is the first rental after a comprehensive modernization – only then can he freely set the rental price (Section 556g Paragraph 1a No. 4 BGB).
4. Other modernization
In the case of smaller modernization, a surcharge above the ten percent limit of the rent freeze is possible. However, only if the landlord could have increased the rent of the previous tenant because of the modernization. He may then add up to 8 percent of the modernization costs – i.e. the portion of the costs that landlords can pass on to their tenants even in ongoing tenancies (Section 556g (1a) No. 2 BGB).
However, the landlord must inform the prospective apartment tenant in text form – i.e., by letter or email – that he has modernized the apartment in the last three years before the start of the tenancy.
5. Surcharge for furnished apartments
In principle, landlords also have to adhere to the rent brake when renting out furnished flats or apartments. There are only two exceptions:
- Furnished apartments that the landlord rents out only for temporary use – for example holiday apartments,
- A furnished room in an apartment in which the landlord also lives (Section 549 Paragraph 2 No. 1 and 2 BGB).
The rent brake applies to all other apartments that the landlord rents out furnished. However, a so-called furnishing surcharge is permitted. The legislature has not stipulated how this is calculated.
The landlord does not have to show the surcharge separately in the rental agreement. It is therefore often difficult for tenants to understand how the rent for furnished apartments is made up and whether the landlord is violating the rent brake.
Is your rent too high?
If you have signed a rental agreement in a city where the rental price limit applies, you should check whether your landlord has adhered to the rental price limit. To do this, you need to know what the standard comparative rent is.
You can take a look at the rent index in the city. Often there is a qualified or at least a simple rent index. You can usually find this out easily on the website of your city or municipality. Then you check on the basis of the location and the condition of the apartment, which rent would be customary for the location. In some cities there are online forms that you can use to quickly determine the relevant rental price. In Cologne, however, tenants have to pay a fee of 3.50 euros for this (as of January 2021).
If there is no rent index
Things get a little more difficult where there is no rent index. You can use comparative rent databases from landlords ‘and tenants’ associations as well as comparable statistical surveys on the local rent. The best thing to do is to contact your city administration or a tenants’ association.
Can you enforce your rights yourself?
The good thing is: If your landlord has asked for too much rent, the agreement on the amount is ineffective, but not the entire rental agreement. So you can stay in your apartment, but in future only have to transfer the permitted rent. In addition, your landlord has to repay the excess rent (§ 556g BGB). This is the best way to proceed:
Step 1: Complain about excessive rent
You have to reprimand the excessive rent in order to pay less (§ 556g Abs. 2 BGB). The best thing to do is to write a letter to your landlord explaining the amount by which the rent is too high. And ask him to accept your rent reduction.
You do not have to provide a detailed explanation of why the rent is too high. In order to have proof in your hands, you should send the complaint by registered mail.
Step 2: Claim back rent that has been overpaid
As a tenant, you are entitled to repayment of the entire rent that you have overpaid since the start of the tenancy (Section 556g (2) BGB). This applies to all rental contracts that have been concluded since April 1, 2020. You only have to complain about the breach of the rental price limit within the first 30 months after the start of the tenancy.
Even after 30 months you can still complain. However, you will only get back the amount that you have paid too much since the complaint and only if the tenancy has not yet ended.
If you signed your rental agreement before April 1, 2020, the old rule will remain for you: Your complaint will only be effective for the future. You will only get back rent that has been overpaid from the point in time of your complaint (Art. 229 § 51 EGBGB).
Step 3: Reclaim the excess deposit
In addition, your landlord must also release part of the deposit, as he has assumed that the rent will be excessive for the deposit. You should demand that too.
What if your landlord doesn’t accept the complaint?
If your landlord does not want to reduce the rent, you need support. You can contact a tenants’ association, but you have to become a member, a lawyer or a legal service provider.
As a legal service provider, we recommend conny.legal. Since January 2017, the company has been putting the rent brake on tenants, known at the time as less.miete.de. The offer is aimed at tenants in all cities and municipalities in which the rent brake applies. You can use a rental calculator on the provider’s website to check whether you are paying too much rent.
This is how the legal service provider works: After an inspection, he sends a complaint to the landlord and clarifies everything else with him. If necessary, they will take you to court for you. If the service provider is successful, you as the tenant pay the savings of five months.
Expaturm took a closer look at the portal: We examined the general terms and conditions and had the exact procedure explained to us in writing. We consider the price to be fair, the cost structure is transparent and the terms and conditions are consumer-friendly.
Experience with the rent freeze?
The German Institute for Economic Research Berlin (DIW) has examined the effect of the rent brake and came to the conclusion at the end of 2018 that the rent increase had slowed moderately due to the rent brake.
The Berlin tenants ‘association and the German tenants’ association repeatedly complain that some landlords do not adhere to the rental price limit. According to a survey by the conny.legal portal, an average of more than 70 percent of the 10,000 cases examined were above the permissible limit. Tenants in the six major German cities surveyed were paying an average of 220 euros too much per month.
Experiences in Berlin
Berlin was the first federal state to introduce the rent brake with effect from June 1, 2015 and has now extended it to May 31, 2025.
The new rent index 2019 was published on May 13, 2019. Rents have risen more slowly recently, but the housing market remains tense. The average net rent without heating rose by 33 cents to EUR 6.72. With an online query you can find out the rent for your apartment according to the current rent index.
A reprimand of the rent brake can be worthwhile: The district court of Berlin-Lichtenberg sentenced a landlord to repay the overpriced portion of the rent to the tenant. That was more than 30 euros every month (judgment of September 28, 2016, Az. 2 C 202/16).
A tenant in Berlin-Neukölln was able to save more than 220 euros per month (District Court Berlin-Neukölln, judgment of September 8, 2016, Az. 11 C 414/15, confirmed by the Berlin Regional Court, March 29, 2017, Az. 65 S 424 / 16).
The “rental price check campaign” is helpful. Those affected can contact the Berlin tenants’ association free of charge. To do this, those seeking help do not even have to be a member of the association. This checks how high the local comparative rent would be.
Berlin rent cover
In addition to the rent cap, the so-called rent cap has been in effect in Berlin since February 2020. Landlords were only allowed to demand the rent specified in the ordinance. Many landlords put two rents in the contract.
First the capped rent and then the shadow rent, which was sometimes more than twice as high. The tenant now has to pay this, as the Federal Constitutional Court declared the rent cover null and void in a decision of March 25, 2021 (Az. 2 BvF 1/20, 2 BvL 4/20, 2 BvL 5/20).
For you as a tenant, this means: You have to pay the difference to the shadow rent. In any case, you should check whether your landlord has adhered to the rental price break with the shadow rent.