For all real estate properties located in Germany, the rental contract is based on German law. We provide you with information about house hunting and housing allowance, deposit, rent and utilities, sublet, renovation, home insurance and much more. We also describe the risk of fraudulent online accommodation offers.
Before Signing the Lease in Germany
Finding a House or Apartment
Property advertisements: Make use of regional and local newspapers, free newspapers displayed in shops and public buildings, or specialized websites (www.immobiienscout24.de).
With the help of a real estate agent (Immobilienmakler): in this case, the agency fees cannot be more than two months’ rent without utilities (Kaltmiete) plus VAT (MwSt.). Normally, the tenant shouldn’t have to pay a fee, since it is generally the landlord who solicits the services of a real estate agent. In these instances, the agent is only paid if the leasing contract has been concluded and signed. Be careful, it is forbidden for real estate agents to ask for an advance payment!
Student housing: Another option is to find property through a „Mitwohnzentrale“, an apartment share agency specializing in shared student housing. These agencies operate in many university cities and their offers and services can be found on the Internet (www.wg-gesucht.de).
When renting a property, you can apply for housing allowance (Wohngeld) from the State. The amount of housing allowance you are granted will depend on several factors, including the amount of rent you pay, your income, the number of family members living in the apartment etc. During the first few years of study the student´s parents’ income can be a criterion too. The authorities can refuse your application if you already benefit from other social aids in Germany. A student, for example, won´t be granted housing allowance if he already receives other allowances for his studies.
Rental Agreements in Germany
For all real estate property located in Germany, the associated lease contract is bound by German law.
Rules Applicable to All Leases
There are no specific rules regarding the form of the rental agreement, meaning that rental agreements may also be concluded orally. For your own protection, we recommend that you always ask for written contracts so that the terms and conditions of the contract are clear for both parties.
The parties involved can decide on the content of the agreement, but it should always contain at least:
- Names and addresses of both parties,
- Start date and length of the lease agreement,
- Amount of rent and utility expenses,
- Terms of payment,
- Description of the rented premises (e.g. number of rooms and, if applicable, the extensions, such as a garage, parking space, garden etc.).
An indefinite rental agreement (“unbefristeter Mietvertrag”) is the most common type of rental agreement used in Germany. Any rental contract that is agreed upon orally or for a period of more than a year is assumed to be indefinite.
Termination of contract by the landlord
Providing legitimate reasons, the landlord can terminate the rental agreement as long as the appropriate period of advanced notice is given. These reasons include, for example, non-compliance with the terms and conditions of the contract by the tenant, or if the landlord needs the property for himself or his family. This is known as ordinary termination of contract (“ordentliche Kündigung”).
In extraordinary or exceptional circumstances, the landlord has the right to terminate the rental agreement providing that he has good reason to do so. Good reason could be improper use of property by the tenant and/or use that severely infringes upon the landlord’s rights, or if the tenant has failed to pay rent for more than 2 months. This is known as extraordinary termination of contract (“außerordentliche Kündigung”).
Both of these types of termination should be given as a written statement, noting the specific reasons for terminating the contract.
Termination of contract by the tenant
If the tenant wishes to terminate the contract, he must send written notice to the landlord, preferably by registered mail, and should always respect a three-month period of advanced notice. The notice has to be handed in no later than the third day of the month for the termination of contract to take effect at the end of the following two months. For ordinary termination of the contract (“ordentliche Kündigung”), the tenant is not required to give reasons.
For example: If notice is given on the 2nd of October, the termination will take effect on the 31st of December.
In extraordinary or exceptional circumstances such as living conditions that endanger the well-being of the tenant, or property that is unavailable, the tenant has the right to terminate the contract without the 3-months advanced notice. However, the tenant must clearly specify the reasons for termination in a written statement that is given to the landlord.
It is important to note that only the person(s) bound by the contract have the right to terminate it. If there are several landlords or tenants, the termination notice must be signed by all landlords and addressed to all tenants or vice versa. Therefore, it is not possible for one tenant to terminate the contract by themselves. This can lead to difficulties when it comes to shared living spaces. In order to avoid this situation some landlords choose to conclude a rental agreement with each tenant separately.
In theory, fixed-term contracts do not exist in Germany (except for student rooms, furnished rooms, or rooms used for a temporary period). However, they are possible under certain conditions.
A fixed-term leasing agreement can only be signed if the owner wishes to:
- Use the property for himself or his relatives immediately after the end of the contract (“Eigenbedarf”),
- Make substantial changes to the property, such that renewing the contract is not possible, or
- Lease the premises for professional purposes (e.g., renting to an apprentice).
In principle, tenants and landlords cannot terminate a fixed-term rental agreement before the end of its term, except under extraordinary circumstances. Nevertheless, the landlord may include the possibility of early termination in the contract on the condition that a period of advanced notice is respected.
There is no obligation to renew the fixed-term contract. However, 4 months before the end of the contract, the tenant is entitled to request an indication from the landlord about whether the term of the contract is still relevant i.e. whether the lease agreement will still be terminated at the previously agreed upon date. The landlord should get back to the tenant within 1 month following this request. If there is no valid reason for terminating the contract (see conditions above), the tenant is entitled to request the extension of the contract to an indefinite length of time.
The Tenants’ Rights in Germany
The landlord must rent and maintain the property in an acceptable state.
Renovation or Repair Works Paid for by the Owner
If a defect occurs during the lease agreement, the tenant is obligated to let the landlord know immediately and in turn, the landlord is obligated to repair the fault.
If the defect is related to the malfunction of good that occurred during its intended use (the heating system breaks down during a harsh winter for example…) the tenant can reduce the amount of rent he pays without having to get approval from a judge first, as is the case in France. The idea is to compensate the tenant for the harm/inconvenience caused; the reduction is final and the landlord cannot claim any future payments for this period of reduced rent.
To do this, the tenant should inform the owner of the problem, preferably by registered mail, and must be able to prove that he gave the landlord sufficient time to fix the problem. Furthermore, the reduction must be proportionate to the problem (generally only small reductions are accepted).
Important: A reduction is not possible if:
- The tenant was aware of the defect before the contract was signed,
- The defect is caused by using the good for anything other than its intended purpose, or
- The tenant does not inform the landlord about the problem.
Reimbursement for expenses incurred by the tenant
If the good is defective, in addition to the reduction in rent, the tenant may be reimbursed for expenses incurred during repairs, given that:
- The landlord was formally requested to take action beforehand, or
- The measures taken were necessary to protect the product (e.g. water damage).
The tenant can withhold a part of the rent if the landlord refuses to act, as long as the tenant gave the landlord formal notice of the necessary repairs or work beforehand and of the intent to withhold rent. This portion of the rent, however, must be paid to the landlord later on once the repairs have been made (this is not the case with the rent reduction since the unpaid rent is retained by the tenant). Before reducing the rent or withholding payment, ask for advice from a lawyer or the Centre for Consumer Protection in Europe.
Sale of the Rented Property
If the property occupied by the tenant is sold, the tenant is under no obligation to move out. In fact, the tenant has a pre-emptive right when the property is sold which gives the tenant priority to purchase the property if he/she so wishes. Exception: This pre-emptive right cannot be exercised if the property is sold to a member of the owner’s family.
If the tenant chooses not to act on his pre-emptive right, the new owner will simply replace the previous owner in the lease contract. The new landlord does not have the right to terminate the contract, nor to increase the rent (unless any of the previously mentioned conditions apply).
Property Inventory when Renting in Germany
The property inventory ("Übergabeprotokoll"), normally filled out when moving into or moving out of a leased property, is not a legal requirement but can often help avoid and/or settle any disputes.
If there is no inventory attesting to the condition of the property before you moved in, the owner will be unable to use this inventory to prove the initial state of the property and/or any damages resulting from your tenancy. If you do choose to make one when you move in, make sure all pre-existing damages are written down on the document!
Remember: It is the owner’s responsibility to prove that the property damage was caused by the tenant.
On the other hand, it is recommended to always make an inventory when moving out to prove that there is no damage to the property following your tenancy. This way, the landlord won’t be able to sue you for any alleged damages after the fact.
When filling out the inventory, the owner and the tenant go through the property together and write down an exact description of the rooms, taking note of any flaws and damages (e.g. stained walls, damages to the ceramics, tiles etc.). This is also a good opportunity to read the meters. It is recommended to make two copies of the inventory, which will be signed and kept by both parties.
Tip: Don’t hesitate to take pictures of the property and any flaws or damages. They can serve as proof in the event of a dispute.
The Tenants’ Obligations in Germany
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.
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 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.
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.
Home Insurance when Renting in Germany
While France requires that all tenants take out property insurance, Germany does not legally require tenants to have home insurance. However, some owners insist that their tenants take out a home insurance policy in order to cover and protect themselves against any damage to the property that may occur during the tenancy. There is no general insurance policy in Germany, but rather it is the tenant’s responsibility to take out one or multiple insurance policies according to what he/she wants to insure.
See below for some of the types of insurance policies.
Who provides the insurance?
What is insured?
Tenant’s personal property
Property damage caused by the tenant
Harm caused to others within the owner’s property
The owner’s property (building)
Searching for accommodation online is easy and convenient. Many landlords or estate agents offer rooms and flats online. With a few clicks, you receive the current offers along with photographs, the topography and other information. Frequently, these websites are used by young people who have just moved away from home and have little experience when it comes to searching for living quarters. And by people looking for a home in a major city where finding one is quite difficult. Scammers take advantage of this fact and advertise flats falsely in order to make money faster: a well-known scam that was also found increasingly on German websites offering accommodations.
The usual courses the scammers take:
1. Scammers act as alleged estate agents
The scammers rent a holiday home and put photographs, descriptions a. s. o. on an online portal for rentals. The potential tenants find the apartment on the online portal and agree upon an appointment with the alleged estate agent. After the visit they obtain an email informing them thus they will obtain the apartment and thus they should transfer the deposit. As they do so – the money is gone.
2. Scammers act as alleged landlords
By email, the alleged landlords claim that they are residing abroad and can therefore not be personally present to view the flat. They ask the interested party to pay a deposit in advance and in return they are promised the key to the flat. In case the flat is not to the liking of the interested party, they are promised the refund of their deposit in return for the key. Usually, the correspondence is in English. In order to transfer the money, an escort service with a company such as Western Union or DHL is asked for. Even if the deposit of the money is not part of the companies’ service, the familiar names alone inspire confidence. Usually, the scammer sends scans of another person’s I.D. in order to give the victim a false sense of security.
Use caution when looking for living quarters online and observe the following:
► Do not deliver any kind of payment in advance. Wait until the rental contract is signed and you have received the keys.
► In case the landlord claims that he is not able to be personally present and does not present a realtor or caretaker, caution should be exercised. A delivery of the key in return for a deposit is not common practice.
► Be sceptical when payment of the deposit should be done by international cash transfer.
► Be sceptical of a disproportionally low rent.
► Check whether the estate agent is reliable. Indications could be: “Maklerschein” (permission of estate agents acc. § 34 c Gewerbeordnung), correct and complete legal notice on the website, plenty (not only 1) flats and apartments in the product range.
► Do not send any scanned or copied I.D. papers to the landlord.
► Report dubious flat offers to the operator of the internet portal.
► When you have fallen victim of a scam, contact the police.