On 21 March 2016, Berlin's Regional Court (case 18 S 154/15) strengthened the position of Berlin's rent index. The court ruled that the rent index, even if not classified as "qualified," takes precedence over an expert appraisal when determining the local comparable rent.
The case
Deutsche Wohnen sought to push through a rent increase for one of its apartments in Berlin that exceeded the values in the 2013 rent index. The company commissioned a statistics professor from Dortmund to produce a supporting appraisal.
The judges of the 18th Civil Chamber did not follow this reasoning. The "indicative effect" of the rent index could not be overturned by a single private appraisal. The rent increase claim was dismissed.
"We welcome the ruling," said the Berlin Tenants' Association.
Rent index trumps private appraisals
The message from case 18 S 154/15 is clear. Berlin's rent index is the primary instrument for justifying rent increases, and attempting to circumvent it with private appraisals carries high litigation risk. For owners in dynamic boroughs like Neukoelln or Friedrichshain-Kreuzberg, the rent index provides a binding reference point.
Landlords should align their rent increase requests carefully with the values and ranges of the current rent index. For assessing market rents and weighing optimisation versus re-letting, an experienced Berlin real estate agent can contribute valuable local market expertise.
Relevance beyond this individual case
The ruling refers to the 2013 rent index but has implications for current practice. According to the Tenants' Association, the 2015 Berlin rent index, produced using similar methodology, is already being used as a benchmark in district court rulings.
The Regional Court's decision reinforces the general acceptance of Berlin's rent indices in court. This creates predictability for long term yield planning on the Berlin housing market.
Disclaimer
This article is for general information only and does not constitute tax or legal advice. The content does not replace individual consultation with a tax advisor or attorney. No liability is assumed for accuracy or completeness.
