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Berlin’s controversial rental cap overturned by Germany's top court

Germany
Vlada Karpovich / pexels

Germany’s Constitutional Court ruled Thursday that  freezing rent prices in Berlin was a violation of the German constitution, in a move that overturns one of the most debated laws in Germany in recent years, reported DW.

The court found that since Germany’s federal government had already passed a law regulating rents, a state government could not impose its own law in contradiction of existing rules, thereby ruling Berlin’s ‘rent cap’ law to be invalid.

The Berlin government had called the rent cap a "breathing space" for tenants while new housing could be built.

Thursday's decision could result in a windfall for landlords as monthly rents across Berlin rise by hundreds of euros with immediate effect. Landlords may now demand their tenants make good on higher rent prices for the last year.

In response to the judgement, Sebastian Scheel, Berlin's minister for urban development and housing, promised that the state government will help tenants now facing sudden rent hikes in the city. A demonstration calling for the expropriation of large real estate companies was announced on Thursday evening.

The Berlin Tenants' Association called the court’s ruling illegal, with the association's director, Rainer Wild, noting that it contradicts other court orders.

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