(1) Where a lease agreement is concluded for residential space that is located in an area in which the housing market is under pressure, as determined by a statutory instrument in accordance with subsection (2), the rent charged at commencement of the lease may be in excess of the reference rent customary in the locality (section 558 (2)) by no more than 10 per cent.
(2) The Land Governments are authorised to determine areas in which the housing market is under pressure by means of a statutory instrument for a maximum duration of five years in each case. Areas in which the housing market is under pressure are given if the adequate supply of the population with rented dwellings at appropriate terms is particularly at risk in a municipality or a part of a municipality. This may be the case especially if
1. the rents are increasing by a significantly higher rate than they are, on average, throughout the Federal Republic of Germany,
2. the rent accounts for a significantly higher portion of household expenses, on average, than is the average throughout the Federal Republic of Germany,
3. the residential population is growing without the housing required in this regard being created by new construction, or
4. a low vacancy rate is faced with high demand.
A statutory instrument in accordance with sentence 1 must cease to be in force no later than on midnight of 31 December 2025. The reasoning for it must be provided. The reasoning must show the facts based on which an area in which the housing market is under pressure is given in the individual case. Furthermore, it must be evident from the reasoning which measures the Land Government will take in the area and in the period of time respectively determined by the statutory instrument pursuant to sentence 1 in order to remedy the situation.