Resi specialists pledge support for tenants following court decision to overturn Berlin rent freeze

Two of Germany's largest listed residential companies have pledged their commitment to supporting tenants following the April 15 ruling by the German Federal Constitutional Court in Karlsruhe to overturn Berlin's rent freeze policy.

The court has ruled that rent caps are incompatible with German basic law and therefore null and void. It said that the city's government does not have the authority to impose rent freezes on landlords. Only the federal government, which introduced a “rent brake” in 2015 to limit rent increases, has such power. Authorities in Berlin froze rents for five years on February 23, 2020, a policy that covered some 1.5 million apartments in the German capital. Then, in November 2020, landlords were told to cut rent for more than 300,000 tenants.

However, residential specialists Vonovia and Deutsche Wohnen have said that the decision will not lead to rapidly rising rents or an aggressive clawing back of foregone rents. Technically, Vonovia is ow