Most tenants in Germany are already entitled to information to help them determine if their rent is too high. However, a decision by the Federal Court of Justice in the country in early-July has now extended this right significantly. A key court decision in Karlsruhe has given tenants wide-reaching rights to identify and challenge high rents - no matter how long they have lived in the property.

Currently, renters who live in rent-controlled areas in Germany are entitled to certain information from their landlord in order to decide if they are paying too much. However, this right to information is generally capped at three years, after which time the tenants can still sue, but they can’t access information that could be crucial to their case.

The original case was brought by four tenants who live in rent-controlled neighbourhoods in Berlin. The tenants argued that the landlord had violated their rights under Germany’s rent control law - the Mietpreisbremse - by refusing to pay back what they claimed was overpaid rent. The landlord also refused to provide information on how the rent had been calculated, citing a statute of limitations that they claimed expired three years after the move-in date.

Three lower courts had already decided in favour of the tenants, with the Berlin Landgericht (regional court) ruling that the three-year deadline expired three years after the request for information had been made - not three years after the move-in date. The Federal Court of Justice (BGH) backed up this decision after an appeal. 

The Mietpreisbremse is Germany’s rent-control law that helps determine by how much landlords are able to raise the rent at the start of a new tenancy. In concrete terms, the asking rents for new tenants cannot be more than 10% higher than comparable rents in the area. However, there are exceptions that landlords can take advantage of - such as the carve-out for newly renovated properties or for properties where the previous rent was already over the threshold. New-builds (flats built and rented after 2014) are also exempted.   

Federal states can choose to apply the rental control law in areas where there is an especially overheated housing market - primarily as a means of protecting tenants. Currently, it applies in all of Germany’s major cities - from Munich to Hamburg - as well as in smaller towns and more rural areas where demand for housing is high.

With the BGH ruling in favour of the tenants, there are now much clearer guidelines for tenants on when they are allowed to ask for information - and if and when their landlord is allowed to refuse it. It means that people who have lived in their current rental property for a long time but suspect they are being overcharged can now demand key information from their landlord in order to build a case against them. 

Berlin landlords can legally be expropriated, expert panel rules

The latest move against landlords follows on from a decision at the end of June that large landlords (corporate ownership of entire blocks of apartments) can be forced to pass properties into state hands.

Almost two years after Berlin voted to take the properties of major landlords into state hands, a commission of experts have now concluded that it is legal to do so. The committee handed over its more than 150-page report to Berlin Mayor Kai Wegner (CDU), declaring its findings on a topic that had never been seriously considered before: stripping major landlords like Vonovia (549,000 apartments) and Deutsche Wohnen (150,000 apartments) of their properties in the capital and transforming those properties into state-run housing.

Their year-long work involved delving into uncharted legal territory and dissecting a specific article of the Basic Law that had never been ruled on before. But its findings were unambiguous: ‘the expropriation of major landlords in Berlin is compatible with the constitution.’

In the eyes of the majority of the 13 members of the commission, such a move would be not only legal but also ‘proportionate’ to the scale of the current Berlin housing crisis. The commission also asserted that the city-state would have the right to compensate landlords like Deutsche Wohnen at less than the properties’ market value and that no change in the state constitution would be required.

In one of its most forceful statements, the commission also noted that the idea of expropriation had numerous advantages over alternative strategies for tackling the housing crisis. However, the findings of the commission could still face opposition from the current Berlin Senate, which has changed hands in the year since the expert panel was originally formed. 

Back in September 2021, Berliners voted in a referendum on whether the city should buy out landlords with more than 3,000 properties and bring these flats into state hands. Around 60% of the electorate voted in favour of the move, while 40% voted against. 

Politicians in the UK will be watching very closely what happens in the German PRS over the next couple of years, especially in Berlin, and UK landlords (both large and small) should do the same.