A court ruling could prevent the introduction of Germanyβs much anticipated residential βrental freezeβ.
The district court of Berlin-Charlottenburg has rejected the rental table used to calculate the in Berlin as invalid.
The court reasoned that the table was not compiled according to scientific principles.
According to German news reports, Berlin would have become the first city to implement the rental freeze agreed on by the government . From 1 June, rents in existing buildings would have been prevented from being raised by more than 10% over the local average rent according to the rental table used.
It is anticipated that the ruling could have implications in other cities implementing the mietpreisbremse.
βThe verdict is not legally binding yet, but it is sending a signal out well beyond the capital city as the courtβs reasoning can be applied to many rental tables in other cities,β said JΓΌrgen Michael Schick, vice president of the real estate association IVD.
βWe are expecting a flood of legal procedures but the extent and the costs cannot be predicted.β
In the verdict it was noted that the Berlin rental table could not be presumed to represent the actual local average.
The court argued the so-called extreme value adjustment was not done according to scientifically recognised criteria and some rents were not included in the average because they were declared too high.
Schick forecasted fewer tenants and also fewer courts will accept existing rental tables.
He expects more scientific reviews of rental tables in many regions and the average rents derived from it.
Schick noted the government had also predicted βan increased number of legal proceduresβ in the explanatory memorandum on the rental freeze.
