Rent brake overturned in bavaria – what does it mean for tenants and landlords??

On wednesday, the munich regional court overturned the bavarian rent control law in its original form. The rent cap ordinance passed by the state government in the summer of 2015 was not sufficiently comprehensible, a judge ruled.

If – as in munich – the rent brake applies, the prices for re-rentals may be a maximum of ten percent above the local comparative rent. Two tenants from the city center of munich had therefore tried to sue their landlady for information about the rent of their premises.

In june 2017, the plaintiffs failed before the munich district court because the court considered the mitpreisbremsenverordnung to be unlawful. This ruling has now been confirmed by the district court.

Signal effect

The verdict is legally binding. According to the ministry of justice, this is the first appeal verdict of this kind in bavaria. Although it only has significance for the two parties to the dispute, as press spokesman uwe habereder from the regional court explained. However, it could have a signal effect for further disputes between landlords and tenants.

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"Although every court is free to judge the effectiveness of the ordinance differently, the ruling was allowed to have a pioneering role for the whole of bavaria", it hailed from the bavarian state association of the german tenants association. "The tenants who still have ongoing rent control proceedings on the basis of this regulation will lose", said volker rastatter, executive director of the munich tenants association.

The federal states determine where the rent brake applies by designating areas with a tight housing market. In bavaria, there are 138 municipalities. However, the court ruled that it was not comprehensible why the rent brake applied in these areas.

Lack of legal certainty

The state government revised the rent control ordinance in july and added a "supplementary justification" follow up. It not only explains which criteria justify a rent cap – such as population forecasts and construction activity – but also how heavily the individual criteria are weighted.

Additionally, the ministry of justice wanted to have the data that went into this assessment re-collected. "It is absolutely clear: our tenants need legal certainty", said justice minister winfried bausback (CSU). "In this context, we are having a new database – unlike the previous regulation, which was based on data from the national office for statistics – collected by an external expert." At the moment the calls for tenders are running.

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The court has not decided whether the current rationale for the rent brake is effective. According to the tenants' association, however, this is questionable: "we will have to go through a test case again," said, said rastatter. "Only then will we be able to see whether the new, improved ordinance will now apply."


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