Bundestag Approves Draft Law on Rent Regulation Amendments
January 27, 2025
The German Bundestag has passed a draft law that aims to amend the existing regulations on permissible rent levels at the start of a tenancy. The draft law, titled “20/14672: Gesetzentwurf Entwurf eines Gesetzes zur Änderung der Regelungen über die zulässige Miethöhe bei Mietbeginn,” proposes significant changes to the current rent law framework.
Key Provisions of the Draft Law
The draft law includes several key provisions designed to address concerns regarding high rental costs and provide tenants with greater protection:
- Rent cap: The draft law introduces a temporary rent cap that limits rent increases at the start of a tenancy to a maximum of 110% of the local comparative rent (Mietspiegel). This cap would apply to all new and existing rental agreements.
- Expansion of rent control areas: The draft law expands the designated rent control areas in Germany. Under the new provisions, all cities with more than 50,000 inhabitants would be subject to rent control regulations.
- Strengthening of tenants’ rights: The draft law strengthens tenants’ rights by prohibiting landlords from charging excessive brokerage fees and by granting tenants the right to challenge rent increases based on the Mietspiegel or other objective criteria.
- Introduction of a rent brake mechanism: The draft law introduces a “rent brake” mechanism that allows municipalities to implement local regulations to prevent excessive rent increases. Municipalities would have the authority to impose a temporary moratorium on rent increases or to cap rent increases at a lower rate than the 110% limit.
- Establishment of a national rent index: The draft law mandates the establishment of a national rent index that would provide transparent data on rental prices and trends across Germany.
Background and Rationale
The draft law is a response to growing concerns about the affordability of housing in Germany. In recent years, rent prices have risen sharply in many cities, making it increasingly difficult for people to find affordable housing. The government believes that the proposed amendments will help to stabilize the rental market and protect tenants from excessive rent increases.
Next Steps
The draft law will now be sent to the Bundesrat, the German upper house of parliament. If the Bundesrat approves the draft law, it will be submitted to the President for final signature and will become law. The law is expected to take effect in mid-2025.
Reactions to the Draft Law
The draft law has been met with mixed reactions. Tenant advocates have welcomed the proposed changes, arguing that they will provide much-needed protection for tenants. However, landlord organizations have expressed concerns that the rent cap and other measures could discourage investment in the rental market and lead to a shortage of affordable housing.
20/14672: Gesetzentwurf Entwurf eines Gesetzes zur Änderung der Regelungen über die zulässige Miethöhe bei Mietbeginn (PDF)
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