Rent Control: What tenants in Munich should know 2020

The “Mietpreisbegrenzungsverordnung” (Rent Limitation Ordinance), called Mietpreisbremse (Rent Control law) applies to the entire Munich city area and 161 other municipalities in Bavaria. These cities and municipalities also include many towns and villages in the immediate vicinity of Munich, such as Kirchheim, Garching, Karlsfeld, Germering and Pullach im Isartal.

Although it is a German federal law in force since 2015, each German federal state must decide for itself whether it is valid in its own region.

How the law came into force

In Bavaria, too, the Rent Control had to overcome several hurdles before it became fully effective.

• 1 August 2015: Bavaria introduces the Rent Control for 137 towns and municipalities. Due to the particularly tight housing market, Munich is also included.
• 10 November 2015: The Bavarian state government stipulates in the Tenant Protection Ordinance (Mieterschutzverordnung) that rents for new rentals in Munich, among other places, may not exceed the local comparative rent by more than 10 percent.
• 21 June 2017: The action based on the Rent Control of a tenant from Munich's Maxvorstadt is dismissed by the local court in Munich. The ruling declares the Rent Control in Bavaria to be ineffective, as the justification is inadequate. According to §556d BGB, reasons must be given in each case as to why a city or municipality has a "tight housing market" which justifies the Rent Control. The Bavarian state government had only listed general criteria without assigning them to individual cities such as Munich. With this formal error in the implementation of the Rent Control, Bavaria was not the only federal state.
• 25 July 2018: Munich's city council decides on the municipal Rent Control for Munich. This means that the law will apply from 1 August 2018 to Munich flats owned by municipal housing associations such as GEWOFAG and GWG. At the same time, municipal housing associations must now also comply with other stricter regulations: for example, they are allowed to increase rents by a maximum of 10 percent within five years through a lower cap, and they are allowed to pass on less modernisation costs.
• 7 August 2019: After a long wait, all Munich tenants finally have legal certainty thanks to the justified new enactment of the Rent Control law. The Rent Control applies to new rental agreements signed from 7 August 2019 onwards. For tenancies concluded before this date, the new decree unfortunately comes too late. The law now applies to a total of 162 towns and municipalities in Bavaria and also to Munich.
• 1 April 2020: The German government tightens the law so that in Munich, too, overpaid rent can still be reclaimed retroactively for up to 30 months for tenancies beginning on or after 1 April 2020. In addition, the Federal Government extends the Rent Control until 2025, although this extension is not binding for the federal states.
• 17 June 2020: Bavaria decides to extend the Rent Control only until 31 December 2021 and then to review the situation in the individual areas again. Whether the Rent Control will be extended again for cities like Munich is still open.

Until when does the Rent Control apply in Munich?

Following the extension of the Rent Control by the Bavarian state government, the Rent Control in Munich currently applies until 31 December 2021. If you signed your Munich rental agreement on 7 August 2019 or later, you can apply the Rent Control if you pay too much rent. As a tenant of a municipal housing association, you have the opportunity to enforce your rights already for rental agreements from August 2018.

How well does the law work in Munich?

Unfortunately, politicians have waited a long time to correct the initial formal errors and introduce the Rent Control on a sustainable basis. Most tenants who have signed a new rental agreement before 7 August 2019 since 2015 will therefore not be able to benefit from the law. However, the regulation has been firmly established in Bavaria since 2019 and many tenants in Munich have been successful.

There are still landlords though, who use tricks to circumvent the Rent Control illegally. At the same time many Munich tenants are not aware of their rights. This makes it all the more important that tenants become active now. There are many good reasons to apply the Rent Control. The more households enforce their rights, the slower the rent level in Munich can rise. For example, the basis for calculating the local comparative rent is kept at a lower level.

There are exceptions that apply throughout Germany in which the Rent Control cannot be applied. These exceptions also apply to rental relationships in Munich:

• First lettings: The law cannot be applied to new flats that were used for the first time after 1 October 2014.
• Modernisation: If rented flats have been extensively modernised, the Rent Control is not applicable.
• Older tenancies: Rental agreements signed before 7 August 2019 are exempt from the Rent Control. In the case of flats owned by municipal housing associations, the exemption applies to rental agreements signed before August 2018.
• Temporary rental: Tenants who rent a flat on a temporary basis cannot benefit from the law.
• Protection of existing rents: The Rent Control cannot be applied to housing for which previous tenants have already paid too high a rent.

In addition to these nationwide regulations, the state of Bavaria has not defined any further exceptions. Even if one of the exceptions applies to your situation as a tenant, we still recommend a check. The cap on rent increases was already lowered in Munich in May 2013: Landlords are allowed to increase the rent by a maximum of 15 percent within three years. In many cases you are therefore still entitled to a reduction in rent due to unlawful increases.

In order to be able to apply the Rent Control in Munich, we recommend the following steps to tenants:

1. Determine the maximum rent: Use our free rent index calculator for your individual case.
2. Notify landlord: The calculation shows that you pay too much rent? Inform your landlord with a letter of reprimand.
3. Request proof: The landlord is invoking an exception to the Rent Control? Ask for proof of this.
4. Hire a lawyer or CONNY: Your landlord does not react? Use legal support to enforce your rights.

CONNY is the leading consumer rights portal and campaigns for tenant rights. We help you to put the brakes on your rent. Enforce your rights now - simply & conveniently:

1. You send us the information about your flat.
2. We will check the rent level in your individual case free of charge.
3. We pay a partner lawyer if a rent reduction is possible.
4. You only incur costs if we are successful for you.