elxeneize/Envato
Berlin's residential market has long had potential investors hyper-aware of being caught up in tenant grievance cases which appear unfairly weighted against the investor. But that illusion of strong tenant protection in Berlin is now beginning to unravel. Despite a thicket of legislation intended to cap rents, discourage profiteering and protect affordability, the overwhelming majority of violations go unpunished—and many are not even pursued.
Data from the Left Party’s Mietwucher app, launched during the Bundestag election campaign and since used by over 50,000 Berliners, reveals that in more than 35,000 cases, rents appear to exceed the legal threshold of 20% above the local comparative rent—a level defined by the Economic Offences Act as grounds for an administrative offence. In around 21,000 of those cases, the excess surpasses 50%, potentially triggering criminal liability. Yet only 1,200 of these reports have been forwarded to the housing authorities for review.
The app relies on self-reported data, and its figures are unverified. But other sources suggest similar outcomes. Conny, a legal tech platform which assists tenants in asserting their rights under the rent control law, estimates that up to half of all Berlin rental contracts breach the law. For contracts signed after 2022, the figure rises to as high as 95%. These estimates were echoed by the Berlin Tenants’ Association in its 2023 study, which found that in many cases rents were more than 50% above the reference index.
Large housing companies often the most frequent abusers
Most infringements occur in leases with larger housing companies. The district housing offices are, in theory, obliged to initiate investigations when rents exceed the 20% threshold. However, enforcement hinges on proving not just that a rent is excessive, but that it constitutes an exploitation of the tenant’s personal circumstances. The general housing shortage, no matter how acute, is not sufficient.
That narrow interpretation has largely neutralised the legislation. Only the housing office in Frankfurt am Main has succeeded in extending the legal interpretation of exploitation through a series of test cases. Berlin, for the moment, has no such jurisprudence. Although the Senate claims to support broader enforcement, efforts to encourage systematic prosecution have stalled.
The working group on excessive rents (AG Mietpreisüberhöhung)—a joint initiative of the Senate and the city’s districts—reported a modest uptick in activity earlier this year, with 441 new cases opened in January. But the backlog is considerable, and progress is slow. By mid-April, just 1,800 total reports had been logged by the districts. Only a small subset of those will ever lead to fines or adjustments.
Tenants, for their part, are reluctant to cooperate. The authorities require their testimony to prosecute cases, but many renters are unwilling to jeopardise their tenancies by confronting landlords. The Senate has provided standardised letters to help streamline procedures, but without tenant engagement the process rarely advances.
Some housing policy activists have urged the city to follow the Hamburg model, where a similar digital app was developed in coordination with the city-state. But Berlin’s districts have rejected the proposal, arguing that the existing Mietwucher portal provides sufficient reporting infrastructure. The failure to prosecute, they argue, lies not in the tools but in the political will and institutional resources required to pursue complex cases.
Main risks for investors are reputational
The implications for market participants are real. While large institutional landlords face minimal regulatory threat, the reputational risks are rising. The Left Party’s campaign has placed rent profiteering back into the public spotlight. Legal inaction does not equal immunity in the court of public opinion.
Moreover, a growing proportion of new leases signed well above the rent index reflects a system operating in open defiance of its own legal framework. The gap between formal regulation and practical enforcement invites investor scepticism, even among those well aware of the political theatre surrounding Berlin’s housing market.
For those still acquiring stock in the capital, the message is twofold: the rent control regime remains on the books, but enforcement is patchy, case-dependent, and politically fraught. For now, the real constraint is not legal—it’s reputational, and increasingly, financial. Where tenants don’t complain, nothing happens. But when they do, and the media pays attention, strategies unravel quickly.
There is no immediate prospect of a coordinated crackdown, but nor is there any sign of meaningful reform. The Berlin rent regulation framework remains deeply politicised, inconsistently applied, and operationally broken. Whether this favours landlords or tenants depends less on the law than on who has the time, capital, and nerve to test it.