Berlin’s rent brake is lawful according to Federal Supreme Court ruling

Berlin’s rental price brake remains in force. On 18 December 2024, Germany’s Federal Supreme Court (BGH) ruled that regulations limiting rents for re-lettings in Berlin are constitutional. As a result, the Court confirmed that the rental price brake, which was introduced in 2015 and extended in 2020, continues to apply across the entire capital. Since June 2015, Berlin has enforced rules to control rents for new leases. Originally limited until the end of 2020, the regulation was subsequently extended by a further five years until the end of 2025. The ruling by the BGH concerns a dispute between tenants and their landlord over a sliding rent scale that was significantly above the permissible limit. The judges in Karlsruhe determined that the rental price brake is a justifiable restriction of property rights, intended to curb escalating rents in tight housing markets and ensure the availability of affordable housing. According to the BGH, the regulation is suitable, necessary, and proportionate to achieve this goal. The BGH emphasised that landlords should never have banked on the rental price brake not being extended. The ruling provides legal clarity for tenants in Berlin, who can continue to rely on protection against excessive new contract rents. Landlords, on the other hand, are required to comply with the regulations of the rental price brake and are prohibited from unrestricted rent adjustments. While the ruling provides legal certainty in the long-running debate, it is unlikely to bring an end to the controversy surrounding the rental price brake in Berlin.