German Court Strikes Down Berlin Rent Cap; Vonovia Won't Collect Foregone Rent -- Update
By Mauro Orru
Vonovia SE said Thursday that it has decided not to collect
foregone rents from its tenants despite a ruling from the German
Federal Constitutional Court found Berlin's rent-freeze legislation
The decision from the German real-estate company comes after the
court said the act governing rent for residential premises in
Berlin was void because the sector was already subject to federal
legislation, according to an order published Thursday.
The legislation originally introduced by the Berlin government
was one of the most radical efforts to control living costs in a
major Western city. It came into force in February 2020, and
prohibited rents exceeding those agreed by a cut-off date of June
18, 2019. The law also set an upper limit for re-letting and
imposed a statutory ban on excessive rents.
Vonovia said it would sacrifice up to 10 million euros ($12
million) of legally owed rent.
"We have decided to not claw back any of the foregone rents to
which we would now be legally entitled. Our top priority at this
point are the people who live in our flats in Berlin, and we want
them to be at ease," Vonovia Chief Executive Rolf Buch said.
Mr. Buch conceded that the ruling would create "enormous
uncertainty" for tenants, particularly those hard hit by the
Write to Mauro Orru at firstname.lastname@example.org; @MauroOrru94
(END) Dow Jones Newswires
April 15, 2021 05:00 ET (09:00 GMT)
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