Party representatives agreed on these and other sticking points in social policy during a four-hour late-night session at the Chancellor's Office that ended early Wednesday.
Under the draft law, new rental contracts in areas of high demand for housing can only exceed average local rents by a maximum of ten percent. This is calculated according to the square-metre floor space price.
Exceptions to the rent cap are new-build homes and "also initial leasing after extensive modernisation" of existing properties, Justice Minister Heiko Maas said after the meeting.
Individual states will determine which housing regions the rent caps will apply to, depending on the level of available housing. Existing rental contracts will not be affected.
"The rent cap that we have long demanded will come, and the principle that he who orders pays will be introduced in broker's regulations. This is good news for tenants."
But conditions still contained in the rent cap legislation threaten to undermine it, the DMB said.
For example, there are no set penalties for landlords who disregarded the legally allowed rent increase, it noted.
Almost six out of 10 Germans rent rather than own their homes, according to the federal statistics office.
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