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The ruling has retroactive effects: tenants will have to return the difference between the amount agreed in the contract and the maximum amount set in the norm repealed by the Constitutional Court.
The cap on rental prices in Berlin (known as Mietendeckel, literally "rental cap") officially came into force on February 23, 2020, and affected one and a half million homes, whose owners faced fines of up to half a million euros if they did not comply with the conditions. In new contracts signed from that date, the prices that were in effect in June 2019 were taken as a reference, which would be frozen for five years.
The entry into force of this Law meant according to El economic institute IFO published a study last February that claims rents decreased thanks to the regulation, but that the supply contracted.
Germany is the country in the European Union where the highest percentage of the population (48.9%) lives in apartments or houses that are not owned, reaching up to 85% in the Berlin city, according to the European statistical office.
