Act Governing the Rent Cap for Residential Premises in Berlin is void
> April 2021

It was predictable, and now the Federal Constitutional Court has clearly stated that the Berlin rent cap is unconstitutional. A total failure of the flagship project of the red-red-green Berlin Senate. The Act Governing the Rent Cap for Residential Premises in Berlin (Berlin Rent Cap Act) is incompatible with the [German] Basic Law and thus void.

The essence of the issue is legislative competences regulated in the Basic Law. Has the Land of Berlin been allowed to make regulations on rent levels for privately financed housing or does this fall under the jurisdiction of the federal legislature? The Federal Constitutional Court has decided this question in favour of the federal legislature. The rent law is subject to the so-called ‘concurrent legislative competence’. This means that where the federal legislature has already conclusively regulated these issues through legislation, a blocking effect unfolds for Land legislature. There is then no more room for any Land to exercise legislative power in this regard. The federal legislator has conclusively regulated the rent law in §§ 556 to 561 BGB. > Please, see also the press release from the Bundesverfassungsgericht No. 28/2021 dated 15 April 2021