The Tenants’ Obligations in Germany

Important information about Deposit, Rent and Utilities, Sublet, Renovation or Repair.

Update : Dec 2018

Security Deposit

Most landlords ask for a security deposit to protect themselves against non-payment or damages caused by the tenant (“Kaution”)

The maximum amount of deposit is three months’ rent without utility expenses (“Kaltmiete”), proving that the tenant can pay 3 monthly installments. The landlord is legally obliged to keep this money in a bank specifically set up for this purpose (“Kautionskonto”). The bank interest obtained by this security deposit should be added to the final refund amount that is given back to the tenant at the end of the contract. It is a good idea to make sure that this bank account was genuinely set up in order to protect yourself against insolvency of the landlord. In order to verify the proper use of this security deposit by the landlord, the tenant can also request a joint bank account (“Und-Konto”) for the security deposit, whereby changes to the account/money can only be carried out with the agreement of both parties.

German law states that the deposit has to be paid back within a period of three to six months after the end of the contract, when the regularization of all charges has taken place. If the rent charges have not been paid during this time the landlord can retain a part of the deposit provided that the retention is justified.

Rent and Utility Expenses

The tenant’s first obligation is to pay the rent. At the latest, the rent is due by the third working day of each month. Theoretically, the amount can be freely negotiated between both parties, but in practice, it is often imposed by the landlord.

The tenant will also be required to pay for the utility expenses. If the contract states that the tenant will pay the actual utility expenses, rather than a flat rate, the tenant is entitled to a detailed breakdown of these expenses (“Nebenkostenbrechnung”). This breakdown must be prepared at least once a year, in a way that is easy to understand for the tenant. It must contain a complete list of the costs, the calculation of the costs and the charges that have already been paid.

Annual rent revisions

A rent increase can be expected in when there is:

  • A clause in the contract providing for the rent increase at a fixed date by a pre-determined sum (“Staffelmietvertrag”).
  • A clause in the contract that bases the rent on the cost of living index (“Indexmietvertrag”) established by the Federal Statistical Office of Germany.

In both cases, the rent can only be raised once within a period of 12 months. The leasing contract must provide for such increases from the beginning and if the tenant does not agree, he should not sign the contract under any circumstances.

There are three other specific cases in which the owner can increase the rent:

1. Increases for adjustment to market prices

In this case, the landlord must show that the rent is lower than the current market price and the following conditions must be met:

  • There is no clause in the rental agreement excluding the possibility of a rental increase,     
  • There is no  indexation clause in the contract,
  • The total rent increase over a period of three years does not exceed 20 %, and
  • There has not been a rent increase in the past 15 months (the landlord must provide three months’ notice for all rental increases)

The landlord must provide a written statement, justifying the increase with reference to:

  • A rent index,
  • Official statistics (“Mietspiegel” or “Mietdatenbank” - these don’t exist in all states or cities),
  • A sworn statement by an expert, or
  • The amount of rent in three comparable properties.

The tenant has two months to accept or refuse the increase. The increase will come into effect after the three months’ notice given to the tenant by the landlord, provided that the tenant has accepted it.

Important to note: The notification of the rent increase gives the tenant an exceptional right to terminate the contract. He/she has the option to terminate the contract up to two months after being notified about the rent increase.

2. Increases after upgrades to the property

After conducting renovation work on the property, the landlord is allowed to increase the rent up to 11% of the expenses incurred. By law, the renovations must:

  • Increase the utility value of the property,
  • Permanently improve the living conditions, and/or
  • Facilitate water or energy savings.

The landlord has to inform the tenant at least three months before construction starts, indicating the type of construction, the estimated duration and the expected rent increase. The notice of rent increase has to be given by the end of the construction period. The rent increase will then come into effect three months after the notification was received.

Important: This type of rent increase is permitted, even if other increases have been agreed upon in the indexation clause of the rental agreement. This is why the tenant also has an exceptional right to terminate the rental agreement if the landlord intends to increase the rent by this reasoning. The tenant can terminate the contract up until 2 months after receiving the rent increase notification.

3. Increases in line with rising utility expenses

Even though a flat-rate for utility expenses may have been agreed upon in the rental agreement, the landlord can increase the rent - provided that a special clause allowing this was included in the rental agreement. It only requires  a written statement justifying the reasons for the increase. In this case, once again, the tenant is entitled to an exceptional termination of the contract if he/she so wishes.

Important: Once again, this type of rent increase is permitted, even if other increases have been agreed upon in the indexation clause of the rental agreement.

Subletting

Subletting is only possible with the landlord’s approval. However, the landlord cannot refuse the sublet request in the case of:

  • Family reasons (e.g. if partners split up and the apartment is too big for one person), or
  • Financial difficulties (subletting generates income).

In order to get approval, the tenant must name the subtenant. In general, the request to sublet can only be denied in certain cases, including:

  • If there’s a good reason concerning the subtenant (anticipated problems with neighbors etc.),
  • If the property is too small, or
  • If subletting is not acceptable for other reasons (e.g. renovations taking place in the property).

Important: If the sub-tenant is unable to pay the rent, this is not a valid reason for denial by the landlord since the tenant is responsible for the property rental payment.

Important: Non-authorized subletting constitutes a serious offence and justifies extraordinary termination of the contract without requiring the usual three-month advanced notice. The tenant is the only person responsible for the payment of rent.

Renovation or Repair Works Paid for by the Tenant

Property maintenance and repair

In Germany, maintenance and reparation costs of a property are covered by the landlord. However, “minor repairs” are an exception to this rule: repair costs may be covered by the tenant as long as this provision is specifically stated in the lease agreement (which is often the case for most contracts). “Minor repairs” refers to:

  • Repairing equipment that is frequently and directly used by the tenant (e.g. locks, door handles etc.),
  • Repairs costing about 100 €, with the overall annual repair expenses amounting to no more than 7-8% of the annual rent. 

Normal wear and tear

In theory, regular wear and tear of a property is included in the rent and maintenance costs and thus, should be covered by the landlord. But be careful: in reality, most contracts place the responsibility of these costs on the tenant! This cost transferal is allowed as long as it is explicitly stated in a clause of the contract. However, it is prohibited for landlords to impose fixed-terms for such maintenance e.g. a general requirement to paint the walls every 5 years without taking into account the actual state of the property.

Nevertheless, the tenant is only responsible for the wear and tear caused by his/her tenancy, and not for that caused by previous tenants. If the property was already showing signs of wear and tear when the tenant moved in, the landlord cannot demand that the property be restored to a like-new state upon moving out. In Germany, the list of relevant repairs is limited: carpets, painting of the walls, ceilings and floors, as well as maintenance of windows, inside doors, radiators, and the piping for the heating system.

Good to know: Even though the repairs can be charged to the tenant, it is still theoretically the owner’s responsibility to organize the work (choosing the business, work request etc.). Therefore, a landlord cannot impose these tasks upon the tenant.

Repairs for damages caused by the tenant

These damages must always be paid for by the tenant. Nevertheless, it is important to note that the real value at the time of the damage will be taken into account, not the replacement value.
In terms of the tenant’s obligations in this domain, it is difficult to provide a set of general rules since every situation is different (variations in the terms of the contract, the property inventory, the actual state of the product etc.). If in doubt, contact the Centre for Consumer Protection in Europe.

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