The reason: Regulations on the rent level for freely financed living space that can be offered on the free housing market fall under the competing legislative competence. The states are only authorized to legislate as long as and to the extent that the federal government has not made final use of its legislative competence. But that is exactly what the federal legislature finally regulated with the rental price law in paragraphs 556 to 561 BGB. Due to the blocking effect of federal law, there is no room for the legislative power of the states. Since the rent cap also essentially regulates the rent for unbound living space, it is void overall.

The red-red-green governed state of Berlin pushed ahead last year to curb the recent sharp rise in rents in the capital. The Berlin rent cap is so far unique in Germany. The law has always been hotly contested. Real estate groups and landlords’ associations doubted its legality and purpose.

The rent cap had the following effect in Berlin: Since February 23, 2020, rents for 1.5 million apartments have been frozen at the June 2019 level. From 2022 onwards, they may increase by a maximum of 1.3 percent annually. If an apartment is re-let, the landlord must adhere to new state-set upper limits and the last rent demanded. The second stage took effect on November 23, 2020: rents that are more than 20 percent above the upper limits are now prohibited by law. The regulation is limited to five years. This does not include new apartments that were ready for occupancy from January 1, 2014.

In May 2020, members of the Bundestag from the FDP and CDU / CSU submitted a norm review application to the Federal Constitutional Court in Karlsruhe. A total of 284 MPs believe that the State of Berlin has exceeded its powers - tenancy law is a matter for the federal legislature. The Federal Constitutional Court in Karlsruhe has now confirmed this view.