In its decision, the Federal Supreme Court amended two aspects of the assessment of a permissible initial rent. On the one hand, it decided that the invested equity capital must be adjusted to inflation at 100 percent, and not only at 40 percent as previously. On the other hand, the return can exceed the reference interest rate by 2 percent instead of the previous 0.5 percent, provided the interest rate is 2 percent or less.

The Federal Supreme Court justified this on the grounds that since the introduction of the previous case law, the interest rates for mortgages and the reference interest rate have fallen significantly, resulting in very low rental income under the old calculation method. This was disproportionate to the use of the flats concerned.

The tenants’ association fears that this change in the practice of calculating the rent will lead to a wave of adjustments. Whether this is the case remains to be seen.

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