Berlin to offer loans and grants to hard-up tenants after rent cap defeat

Tens of thousands of Berliners affected have been hit with hikes to their rent after the rental cap was ruled void by the federal constitutional court last week.

Many people are also facing back payments from landlords and private housing companies.

On Tuesday the Berlin Senate announced they would help tenants who had not saved the money to pay landlords back, or were struggling with their new rent increase.

According to the government, 365,000 residents in Berlin were temporarily entitled to a rent reduction until the court ruling last week.

Of these, the Senate estimates that 40,000 households may struggle to pay back the differences in the months they paid the temporary lower rent.

In extreme cases, people could be threatened with eviction, the local government said - and the hardship fund will apply to these households who need it most.

Some Berliners' rents were lowered when the second stage of the rent cap came into force on November 23rd 2020, while others are tenants who have signed so-called 'shadow tenancy agreements' which included two rents in the contract. 

READ MORE:

• What the decision to get rid of Berlin’s rent cap means
• Berlin’s ‘Mietendeckel’ rent freeze ruled unlawful: What does it mean for tenants?

So what help can people get?

The amount of money that people can get depends on their income.

The local government in a press release said the loans "must be repaid and are granted interest-free. If tenants are unable to repay all or part of the money through no fault of their own, the loan can be converted into a grant and its repayment (partially) waived."

Tenants who are not on housing benefits and who have not set aside the "saved" rent payments will therefore have the opportunity to receive bridging assistance.

All households whose income is up to 280 percent of the federal income limit are eligible. The annual federal income limit for a one-person household is currently €12,000 per year.

It means that under Berlin's rent protection fund, single-person households with an income of up to €33,600 per year are eligible.

People who are on benefits should contact their district office to check whether the landlord's additional demands can be met with housing benefit.

The Berlin Senate plans to commission the Investitionsbank Berlin (IBB) to pay out the loans.

Tenants will be required to submit information to prove their situation, including their lease and proof of rent payment for the last three months.

Funds could be in accounts as early as May 1st.

However, it is a matter of "bridging liquidity, which is only converted into grants in cases of hardship", said housing senator Sebastian Scheel emphasising that the government prefers to offer loans rather than grants.

The rent cover fund will include €10 million to help tenants.

Some private landlords have announced they will waive repayments for tenants. Berlin state-owned housing companies are also not demanding the money back.

Others, such as Deutsche Wohnen, Berlin's biggest private housing firm, said they will demand repayments.

Scheel said: "Some landlords have already announced that they will waive repayments or offer deferments. I appeal to all landlords to follow this path. It is self-evident that the state-owned housing societies do not charge back."