Berliner rent index declared invalid in significant court judgement
In a court ruling which could have far-reaching consequences for residential tenants and landlords, the Spandau District Court in Berlin ruled that Berlin's Mietspiegel, or rent index, was neither a qualified nor a simple rent index, and in effect had no validity in determining the level of comparable rent in the city on which large numbers of tenants depend for their protection.
The judgement by the court on 6th April now means that the capital now no longer has a vaild rent index, for the first time since 1987.
The court was compelled to rule following a dispute in which the landlord of a 39-sqm apartment in Spandau was trying to increase the rent on 1st September 2021 by €35.70 per month, to €273.73.
Professor Steffen Sebastian of the IREBS Institute at the University of Regensburg said the decision could have wide-ranging consequences for tenants and landlords. Well-organised large landlords who submit three appropriate comparative rents would now be able to increase rents way beyond the existing rent index, whereas small private landlords have neither the option of availing of the 2019 rent index nor that of 2021, since any rent would now be formally unfounded and no tenant would be obliged to comply with it. Tenants and small landlord stand to lose out as a result.
Prof. Sebastian, who is also chairman of the rent index commission of the Gesellschaft für Immobilienwirtschaftliche Forschung (Gif), also expects large price jumps for new leases to be a realistic likely outcome of the ruling.
The Federal Constitutional Court had earlier ruled on 18 July 2019) that tenants and landlords must be able to determine the legally permissible rent in a reasonable manner. However, following the Spandau District Court ruling, Prof. Sebastian now believes that the validity of the Mietpreisbremse (rent brake) itself is in danger. "Without a rent index, the Mietpreisbremse is already de facto going nowhere," he said. Tenant protection is thus very limited. Prof. Sebastian is now calling on Berlin's Urban Development Senator Andreas Geisel (SPD) to hand over responsibility for the rent index to the Berlin-Brandenburg Statistics Office, where he believes this is the only way to ensure that the rent index is produced independently of political or other vested interests, and to restore confidence in the legitimacy of the index.
If it sounds a bit complicated, it is. As Prof. Sebastian explains it, much has to do with the definition of a 'simple' rent index. The current index is a second update of the 2017 rent index, although under current federal law only a single update is allowed. The 2021 Mietspiegel is also not a simple rent index, in that it is calculated based on rents over a four-year period, although since January 1st 2020 a period of six years has also been prescribed for simple rent indices. Apart from a history of disputed challenges to Berlin's index over the past twenty years, a raft of statistical errors have been uncovered in almost every previous index, causing confidence in the various Berlin indices to be seriously undermined.
The rent index, or Mietspiegel, provides information on the local comparative rent for an apartment based on age, size, location and outfitting. Landlords use the rent index to justify rent increases and to determine the correct rent level when concluding new contracts. Tenants can use the rent index to check whether the landlords' claims are justified. In addition to the rent index, rent increases can be justified by naming three comparable apartment, getting in an 'expert' opinion, or using other information from an appropriate rent database.