Germany Rental Laws: Pro-landlord, Neutral or Pro-tenant?

Germany's landlord and tenant laws are judged by the Global Property Guide to be very Pro-Tenant between landlord and tenant, because tenants achieve security of tenure, right to privacy from the owner, right to terminate the rental agreement at any moment, and much more.

Rents: Can landlord and tenant freely agree rents in Germany?

In Germany, there are two main types of rental agreements: indefinite and fixed-term contracts.

Indefinite Rental Agreement (Unbefristet)

An indefinite rental contract has no set end date, allowing tenants to terminate the lease by providing proper notice. However, landlords can only end the agreement under specific legal conditions.

Fixed-Term Rental Agreement (Befristet)

A fixed-term rental contract includes predefined move-in and move-out dates. Once the lease expires, neither the tenant nor the landlord is required to renew it. These agreements are especially common for student housing.

Regardless of the contract type, note that minimum rental periods in Germany can be up to two years.

Rents and rent increases can be freely negotiated and agreed upon. 

The contract may contain:

• Graduated rent increase clauses, or
• Indexation clauses

In Germany, landlords are permitted to raise the rent by up to 15% within a three-year period, but the increase must be justified. German rental law states that the landlord can't increase rental prices within the first 12 months. Tenants have the right to challenge the rent hike if they believe it is excessive, and they are not obligated to pay the new amount without proper justification.

Insurance

The contract should be precise about which utility charges the tenant has to pay. If responsibility for payment of utilities is not specifically passed by contract to the tenant, the landlord pays.

Affordable insurance is quite easy to get in Germany. Household contents or home insurance, or hausratversicherung, covers loss or damage of furniture, clothing, valuables, and other items due to fire, storms, flood, burglary, and vandalism. Taking one out is the responsibility of the property owner. Renters can also take out affordable insurance to cover the loss or damage of their own possessions, but renters' insurance will not cover damages to rental furniture.

Deposits

The security deposit must not exceed three monthly rental payments. It must be paid directly into a savings account with interest common for such savings accounts, and with a three-month termination period.

What rights do landlords and tenants have in Germany, especially as to duration of contract and eviction?

In Germany, tenants are legally protected from sudden evictions. By law, landlords must provide a minimum notice period of three months for contract termination, which extends based on the duration of tenancy—six months for those who have lived in the apartment for 5 to 8 years, and nine months for longer stays.

Moreover, landlords can only terminate a rental contract (Mietvertrag) if they have a legally valid reason (berechtigtes Interesse).

Tenants, on the other hand, can cancel an open-ended rental contract at any time, provided they give three months’ notice. However, if rent is unpaid for two or more months, landlords have the right to initiate eviction proceedings. To avoid such situations, tenants facing financial difficulties should communicate with their landlord as soon as possible.

Under German rental laws, your landlord cannot enter your rented property without prior notice and your consent. They are only allowed to visit for valid reasons, such as inspecting the apartment for necessary repairs or during the move-in and key handover process when you move out. However, in emergencies, the landlord has the right to enter the property without prior notice.

In addition to these mentioned above, there are more protections for costs and repairs occured during the tenancy. 

Legislation

The key law is the German Civil Code (Bürgerliches Gesetzbuch or BGB), as substantially revised in 2001 and 2002; rules on tenancy are in Book 11 (Law of Obligations). In 2001, the government enacted the Tenancy Law Reform Act (Mietrechtsreformgesetz), which includes general lease contract law (535-548) and housing lease law (549-577a). In 2002 followed the Act to Modernize the Law of Obligations (Schuldrechtsmoderisierungsgesetz) (English version).

Other relevant laws include the Regulation on the Calculation of Heating Costs, the 11 Calculation Regulation (on housing costs), the Law on Regulation of Estate Agencies, the Regulation on Personal Chattels, and the law on Apartment Ownership.

How effective is the German legal system?

Tenancy law is enforced in the ordinary courts; estimates speak of 300,000 cases each year, encouraged partly by legal aid and by legal insurance policies. The courts are fair and effective; legal representation is not mandatory, but the process is slow:

Brief history: Recent changes in German landlord and tenant law

The German Civil Code (Bürgerliches Gesetzbuch or BGB) was originally based on a liberal view that citizens were rational and best left to freely make their own agreements. After World War I Germany enacted strong housing control legislation, which was strengthened by the Nazi regime. Post-World War 11 the government pursued a policy based on subsidies for housing construction; with controlled rents where subsidies had been received (though after a time the controlled rents elapsed).

Rent liberalisation began in the sixties.

Despite moves away from subsidies toward targeting the needy, house construction still receives generous tax-breaks. 60% of all German households rent. "Despite rent control regimes and notice protection, private investment in the housing market still seems to pay off and, therefore, many investors offer housing for rent," notes a report by the European University Institute (2004).