Residential tenancy law – Decision on the constitutionality of the controversial Berlin rent cap (Mietendeckel) approaching

More than a year after the law on rent caps in Berlin (Gesetzes zur Mietenbegrenzung im Wohnungswesen in Berlin – MietenWoG Bln) came into force, it is still unclear whether the law in its current form is constitutional. The Federal Constitutional Court (Bundesverfassungsgericht – BVerfG) is now expected to rule on this in the second quarter of this year. A number of members of the German Bundestag filed an application in the middle of last year for what is known as an abstract judicial review (abstrakte Normenkontrolle). In such the compatibility of a legal norm with the constitution (Grundgesetz) and other federal law is examined. The concurrent judicial review proceedings before the Constitutional Court of the State of Berlin (Verfassungsgerichtshof des Landes Berlin), which also examine compatibility with the Berlin state constitution (Berliner Landesverfassung), have been suspended pending a decision by the BVerfG. The same applies to various civil law court proceedings.

The Administrative Court of Berlin (Verwaltungsgericht Berlin - VG Berlin), on the other hand, already commented on the controversial ‘‘Berlin Rent Cap Act‘‘ in its decision of 30 March 2021 (VG 8 L 201/20) and assessed it as not evidently unconstitutional. A Berlin housing company sued before the VG for the annulment of a prohibition decision by the responsible district office. The district office took action against the landlord after the latter had demanded that its tenants agree to a rent increase. According to the VG Berlin, the district office had acted in lawful application of the MietenWoG Bln, according to which the district offices may ex officio take all measures necessary to implement the law. This also included the prohibition decision in question, which was directed against the consent to the rent increase. According to the district office, it did not even matter that the landlord did not demand the payment of an increased rent at all for the time being. The request for consent to a rent increase alone was to be prohibited. An appeal against the decision of the VG Berlin is still possible to the Higher Administrative Court of Berlin-Brandenburg (Oberverwaltungsgericht Berlin-Brandenburg).

The debate about the rent cap centers primarily on the legislative competence of the states and any infringement of landlords' fundamental property rights. Compatibility with provisions of the German Civil Code (Bürgerliches Gesetzbuch – BGB) on rent increases is also in question. Should the Federal Constitutional Court deem the Berlin rent cap to be unlawful, some tenants would probably have to fear additional demands for the saved rents from their landlords in the future. In the event of declared constitutionality, however, it would remain to be seen how politicians apply the rent cap instrument in the future, possibly in other German states as well.