Rent control 2026: What property managers specifically need to consider

Problem: Anyone who fails to fulfill the pre-contractual disclosure obligation during a new tenancy in an area subject to the rent brake cannot rely on the exceptions, and tenants can reclaim excess rent once they have lodged a complaint (Rüge), and retroactively if they do so within 30 months of the start of the tenancy, while the tenancy is still running.

Cause: The most common cause of violations is not a lack of legal knowledge, but the absence of a system that makes obligations visible at the right moment.

Thesis: A structured approval process that triggers and documents the disclosure pursuant to Section 556g (1a) of the German Civil Code (BGB) before the lease is signed significantly reduces this procedural risk.

What applies to the rent brake in 2026?

Direct Answer: The rent brake (Section 556d BGB) applies until December 31, 2029 (Federal Act of July 23, 2025). In areas with a tight housing market, the net cold rent for a new lease may not exceed the local comparative rent by more than 10 percent. Exceptions (Section 556e, Section 556f BGB) require pre-contractual disclosure by the landlord in text form before the tenant signs the contract (Section 556g (1a) BGB).

Three exceptions and why they only apply with correct disclosure

The law provides for three statutory exceptions. The decisive factor: They only apply if the landlord informed the tenant in text form before the contract was signed.

2.1 Section 556e BGB: Previous tenant exception. If the rent last paid by the previous tenant was already higher than the rent permissible under the rent brake, the landlord may set this previous rent as the new rent. However, the exception only applies if the landlord informed the new tenant of the amount of the previous rent in text form before the contract was signed.

2.2 Section 556f BGB: New construction and comprehensive modernization. Apartments that are rented for the first time after October 1, 2014, are exempt from the rent brake. The same applies to apartments rented for the first time after comprehensive modernization. Here, too, pre-contractual disclosure in text form is a prerequisite.

2.3 Section 556g (1a) BGB: The disclosure obligation as an access requirement. All exceptions require that the landlord informs the tenant in text form about the respective exception before the lease is signed. This disclosure must verifiably have been received before the tenant's signature.

Sanction for non-compliance: If pre-contractual disclosure is missing, the landlord cannot rely on the exception. If the landlord catches up on the disclosure in the prescribed form, the landlord can rely on the exception only two years after the disclosure is given. If the disclosure was given but not in the prescribed form, the landlord can rely on the exception only after properly catching up on it; no two-year period applies then (Section 556g BGB). The tenant can reclaim excess rent once the tenant has complained about the violation; if the tenant complains within 30 months of the start of the tenancy, while the tenancy is still running, also retroactively (Section 556g BGB). This is not a trivial risk: with an excess rent of 100 euros per month and a timely complaint, 30 months add up to a reclaim potential of 3,000 euros per tenant party.

Property managers are best advised to clarify specific legal questions, particularly regarding the rent index calculation in individual cases, with a specialized attorney or their professional association (VDIV, IVD).

Current status: Extension until December 31, 2029

The Federal Act of July 23, 2025, extends the rent brake until December 31, 2029. Previously, it applied until the end of 2025. The extension signals that lawmakers and the federal government view the instrument as permanent market regulation.

In its ruling VIII ZR 16/23 of December 18, 2024, the Federal Court of Justice (BGH) reaffirmed the constitutionality of the rent brake. Lawsuits against the regulation based on the fundamental right to property (Art. 14 Basic Law) were unsuccessful. Property managers can assume that the instrument will remain in place over the coming years.

In practice, this means: Internal processes for re-letting must permanently reflect the requirements of the rent brake, not just as a transitional solution.

The 10 percent rule: Calculation and example

In an area subject to the rent brake, the net cold rent for a new lease may not exceed the local comparative rent by more than 10 percent. The basis for calculation is the local rent index pursuant to Section 558c BGB.

Calculation example: The local comparative rent according to the rent index is €12.00/m². The maximum permissible rent under the rent brake is calculated as €12.00 × 1.10 = €13.20/m². A net cold rent of €13.50/m² would be impermissible in this case, provided no exception applies.

The local comparative rent is not a fixed figure, but a rent index value derived from the apartment's location, size, year of construction, and fixtures and fittings. A blanket estimate is not sufficient.

Approval process instead of individual case knowledge. The most common cause of violations is not a lack of legal knowledge, but the absence of a system that makes obligations visible at the right moment. A structured approval process prior to lease creation can significantly reduce this risk.

Check rent brake status and comparative rent before every contract. First check whether the rent brake currently applies in the specific municipality and determine the local comparative rent from the current rent index. State ordinances can expire or be renewed, which is why this check belongs at the start of every new tenancy.

Identify the exception and hand over disclosure before signing. If applicable, identify the statutory exception (Section 556e or Section 556f BGB). Generate the disclosure in text form and verifiably hand it over before the tenant signs the lease.

Document the timing and link the signature to it. Record when the disclosure was received by the tenant. In EverReal, when drafting the lease, select which exception you are invoking. For contracts with the confirmation enabled, EverReal then guides the tenant through confirming the disclosure prior to the digital signature, and the confirmation appears with the date and time in the contract's audit trail.

Secure proof in an audit-compliant and data protection-compliant manner. For subsequent safeguarding, audit-compliant documentation in property management is crucial: only those who can prove that the disclosure was delivered before the contract was signed are on the safe side in the event of a dispute. Because tenant data must be processed in compliance with data protection laws during re-letting, the article on GDPR in property management is also recommended.

Conclusion

The extension of the rent brake until the end of 2029 is a clear signal: the topic remains permanently on the agenda. Property managers who structure their processes now reduce the risk of reclaims and exclusion from exceptions.

The crucial measure is not complex legal studies, but an approval process that triggers and documents the disclosure obligation under Section 556g (1a) BGB at the right moment.

Schedule a consultation to see how EverReal guides the tenant through confirming the rent brake disclosure before the digital signature and documents it.

Where does the rent brake apply in 2026?

The rent brake does not apply automatically nationwide. It is activated by state ordinances for specific areas with tight housing markets. Status as of July 2026:

Berlin

• Status 2026: Applies

• Note: Legal ordinance active

Bavaria

• Status 2026: Applies in 162 municipalities

• Note: Active via state ordinance

Hamburg

• Status 2026: Applies

• Note: Active

NRW

• Status 2026: Applies in parts

• Note: Active via state ordinance

Baden-Württemberg

• Status 2026: Applies

• Note: Active

Hesse

• Status 2026: EXPIRED

• Note: Ordinance expired on Nov 25, 2025, no extension

Other Federal States

• Status 2026: Check

• Note: State ordinances vary

Note: Status as of July 2026. State ordinances may expire or be renewed. Prior to any application, the current status should be checked with the responsible state ministry.

Legal notice and sources

We do not provide legal advice. Property managers are best advised to clarify specific legal questions with a specialized attorney or their professional association (VDIV, IVD).

Sources:- Section 556d, Section 556e, Section 556f, Section 556g (1a) BGB (gesetze-im-internet.de)- BGH VIII ZR 16/23, December 18, 2024 (bundesgerichtshof.de)- Federal Act on the Extension of the Rent Brake, July 23, 2025 (bgbl.de)

Q: Does the rent brake still apply in my city in 2026?A: That depends on the respective state ordinance. Nationwide, the rent brake applies until December 31, 2029 (Federal Act of July 23, 2025), but only in municipalities designated as areas with tight housing markets by an active state ordinance. In Bavaria, for example, it applies in 162 municipalities; in Hesse, the ordinance expired on November 25, 2025, and was not extended. Property managers should check the current status for a specific municipality directly with the responsible state ministry of the respective federal state.

Q: What happens if I forget the disclosure obligation before the lease is signed?A: If disclosure in text form is missing prior to contract signing, the landlord cannot rely on an exception under Section 556e or Section 556f BGB. If the landlord catches up on the disclosure in the prescribed form, the landlord can rely on the exception only two years after the disclosure is given; if the form was defective, only after properly catching up on it. The tenant can reclaim excess rent once the tenant has complained about the violation; if the tenant complains within 30 months of the start of the tenancy, while the tenancy is still running, also retroactively (Section 556g BGB). A disclosure given after the tenant has signed therefore does not cure the violation immediately. The timing of delivery is critical and must be documented.

Q: What is Section 556g (1a) BGB and what obligation does it establish?A: Section 556g (1a) BGB stipulates that a landlord who wishes to invoke an exception to the rent brake must inform the tenant in text form about the circumstances justifying the exception prior to entering into the tenancy agreement. Specifically, this means: The disclosure must be provided in writing or electronically (e.g., via email) and must verifiably have been received before the tenant's signature. Without this pre-contractual disclosure, the landlord cannot initially rely on the exception; a disclosure caught up on in the prescribed form takes effect only after two years, regardless of whether the factual basis for the exception actually exists.

Q: Which federal states no longer have a rent brake?A: In Hesse, the rent brake ordinance expired on November 25, 2025, and was not renewed. Other federal states, such as Saxony or Saarland, never introduced the rent brake via state ordinance. The status varies and may change. Property managers should always verify the current status with the respective state ministry before concluding a new lease without considering the rent brake.