The so-called "brake" is expected to be effective as of June 1, 2015. The core message of the law amendment is: In the case of newly concluded rental agreements, rent may not exceed ten percent of the local comparative rent in areas with a shortage of housing. The federal states determine the areas in which a tight housing market exists for up to five years.

However, the new regulation does not mean that you as a landlord must not fall below the rent you have earned so far in the case of a new tenancy. When re-letting an apartment, you may take as a basis a rent that was agreed in the previous tenancy agreement as a basis for the new tenancy agreement. You do not have to offer a vacant apartment below the previous rent. The following exceptions apply:

You can agree the rent freely for new contracts after a comprehensive modernization – also far above the local level. Comprehensive modernisation should be achieved when the investment for this purpose reaches about one third of the expenditure for a comparable new built apartment.

New buildings are also exempt from the regulation. Newly built apartments are considered to be new buildings that will be used and rented for the first time as of October 1st., 2014.