Rent Reduced by More Than One Quarter – Out-of-Court Settlement Following a Rent Cap Objection

Berlin-Moabit (Stephanstraße): Prompt Out-of-Court Settlement After Rent Cap Challenge – Rent Reduced by More Than 25%

Not only tenants, but landlords as well may seek to enforce their claims through the courts. In proceedings handled by us before the Berlin-Mitte Local Court, tenants had to defend themselves against a landlord’s claim for a rent increase based on the Berlin rent index.

The landlord sought an increase in the net basic rent for a period apartment on Stephanstraße in Berlin-Moabit and brought legal action to that effect. In support of the claim, the landlord relied on various alleged features of the apartment and building said to increase its rental value.

It quickly became apparent, however, that several of these assertions had not been sufficiently substantiated. The court pointed out that, as a matter of principle, the landlord bears the burden of presenting and proving any value-enhancing features. Yet, in most instances, there was no concrete submission regarding the individual features alleged, such as the supposed particularly high quality of the parquet flooring. At the same time, value-reducing circumstances also had to be taken into account, including the absence of a balcony.

After discussing the factual and legal situation, the court ultimately proposed a settlement. The parties agreed that the net basic rent would be increased only very moderately, by an almost negligible monthly amount.

The decision on costs reflected that outcome: approximately four-fifths of the costs of the proceedings were borne by the claimant.

This case illustrates that claims for rent increases based on the rent index do not automatically succeed. Landlords must set out in detail the features said to justify a higher rent and, in the event of a dispute, must also prove them. A careful legal review of the proposed rent increase and a consistent defence can therefore be decisive in successfully resisting excessive rent increases.