Shareholders of large housing companies are relieved to react to the decision of the Federal Constitutional Court to topple the Berlin rent cap. The major landlord Deutsche Wohnen now wants to demand money from tenants, while its competitor Vonovia does without it.

Shareholders relieved: The share price of Deutsche Wohnen rises after the end of the Berlin rent cap

WAs the Federal Constitutional Court tipped the Berlin rent cap, the share prices of listed housing companies rose significantly on Thursday morning. Deutsche Wohnen’s share price, which is mainly active in the Berlin area, rose at times by more than 5 percent, while the share price of its competitor Vonovia did not rise quite as strongly at around 2 percent.

Vonovia manages large housing stocks throughout Germany and abroad, which is probably one reason why the Bochum-based company is not as badly affected by the situation in the capital. It looks different for competitor Deutsche Wohnen. The company has announced that, following the court ruling, it will now demand money from its tenants.

In response to the court ruling, the Berlin building authorities admitted that tenants would have to pay back payments. The authorities said: “For the tenants, this means that they have to pay the rents agreed with their landlords on the basis of the civil code and, if necessary, the difference between the rent cap and the contractual rent.” Berlin’s building senator Sebastian Scheel (left) announced that he wanted to develop socially acceptable solutions for the benefit of the tenants affected.

Company promises: Nobody will lose their home

However, Deutsche Wohnen wants to make the additional payments considerate and promises: “No tenant of Deutsche Wohnen will lose the apartment as a result of the decision, we will proceed with the greatest social responsibility.”

Deutsche Wohnen offers tenants various alternatives for settling the remaining amount of past rents. In addition to one-off payments, installment payments or deferrals of the outstanding amounts are also possible, according to a message from the company. To avoid cases of social hardship, individual solutions should be found with the tenants.

DT. LIVING

— (–)
  • 1T
  • 1W
  • 3M
  • 1J
  • 3J
  • 5J

To the detailed view

The major landlord Vonovia, on the other hand, has announced in response to the decision of the Federal Constitutional Court that it will waive back rent payments that could result from the decision of the constitutional judge. In the case of Vonovia, it is said to be a sum of around 10 million euros.

A large number of tenants had not followed the advice of politics to put the rent saved aside. Vonovia does not want to put the tenants in a situation of having to disclose their complete income situation. The apartments rented by Vonovia in Germany have one million residents.

VONOVIA

— (–)
  • 1T
  • 1W
  • 3M
  • 1J
  • 3J
  • 5J

To the detailed view

The apparently manageable scope of the financial impact in Vonovia’s case has to do with the fact that the Berlin rent cap was only in effect for a limited time and that the company only manages a small part of its entire real estate portfolio in Berlin.

However, the effects of the rent cap on the entire real estate industry would have been significant if it had been in place for a long time and had been copied by other federal states. Representatives of the German real estate industry welcomed the court decision because it ensures legal security.

The relief of the shareholders of real estate companies is therefore also great. When the Berlin rent cap became more and more specific and finally came into force in February 2020, housing stocks had posted heavy losses.