Rental laws in Germany

Rental laws in Germany largely favor tenants over landlords and offer extensive protection under a very robust legal framework. However, there are various types of rental agreements and distinct provisions for different types of property. You need to carefully consider your options and study the clauses of your rental agreement before signing since it is legally binding. 

Rental Agreements in Germany

Regardless of the specifics of your property and the length of your contract, most of the lease agreements follow the standard form (Mietvertrag). It is a long-form that extensively covers various living arrangements, but not all of its provisions necessarily apply to your situation. Therefore, carefully go through the form and clarify each section with your landlord before signing. 

Oral agreements can be legally binding in most states of Germany, but they are much harder to prove if litigation arises. 

In Germany, there are two major types of rental agreements: indefinite (unbefristet) and fixed-term (befristet). 

Indefinite Rental Agreement

The indefinite lease has no termination date. Tenants have a right to end such a contract by providing notice, while landlords can terminate such a lease only under specific circumstances. 

Fixed Term Rental Agreement

A fixed-term lease agreement has specified move-in and move-out dates in the contract. The parties are not obliged to renew it after the expiration. It is a common arrangement for student housing, where rooms or suites are rented out for the duration of the study period or academic year. 

Rental payments

The rental agreement has to specify the amount of rent you are expected to pay, a payment date, and the preferred method of payment. The most widespread practice is transferring money to the bank account of your landlord.     

Utilities 

Depending on the contract, your rent may be cold (Kaltmiete), which includes just rent, or warm (Warmmiete) and may include service and maintenance costs, and occasionally gas, electricity, internet, etc. The costs included in the warm rent vary significantly, so it’s crucial to establish what kind of fees you are responsible for paying by yourself.  

Late Payment Fees

Charging the late fees are not an ordinary practice, and usually not mentioned in the standard rental agreements. Usually, tenants are offered a grace period if they fail to pay their rent on time. 

Rent Increase

The rental agreement can also include the terms for the potential rent increase in the future. According to the law, landlords are not allowed to increase rent in the first year of your lease, or by more than 20%, or 15% in some German states, in the three-year period. 

The gradual rent increase may be specified in your rental contract in the form of “stepped rent” or Staffelmiete. This way, your rental price is predictable over the long-term period. 

Additionally, there are regulations that prevent the landlord from unjustifiable rent increase. The landlord has to provide clear reasoning on why the current tenant has to pay more for the rental than the previous one. The tenant can rebuke the claim if he thinks that the landlord is asking too much. The local tenant association can usually provide information on the minimum fees and rental statistics in the area, so the tenant can make an informed decision regarding the matter. 

Berlin Rent Cap 

Berlin parliament has recently approved the rent freeze for the next five years. The law will come into effect in mid-February and will cap the rent prices until 2025. According to that law, landlords can increase the rent only by 1.3% per year in line with inflation.

Deposit and Insurance

The rental deposit is the common practice in Germany to safeguard the landlord from possible damages to the property or unpaid rent. The exact amount should be stated in your rental agreement and cannot exceed the three-month rent. As a rule, the landlord places the rental deposit into the distinct savings account and is obliged to return it upon the termination of the lease together with the acquired interest. 

Alternatively, tenants who are short of cash can choose rent deposit insurance. In this scenario, the tenant pays a yearly subscription fee, and the insurance provider becomes liable for the rent deposit. 

Registering Your Address

When you rent a residence, regardless if it is a shared accommodation, room, flat, or house, you have to report it to the German state. You need to register your address at Bürgeramt, the local citizen city office. In order to do that, you need to bring your signed rental contract and the proof of residence certificate (Wohnungsgeberbestätigung).

Terminating the Lease

German rental laws protect tenants from unreasonable claims from the landlord and allow lease termination only on specific grounds. The landlord can end the lease in the following cases:

• If the landlord chooses to reside in the property or sell it. 
• If a tenant fails to pay rent on time on numerous occasions. 
• If the tenant violates clauses of the rental agreement- smoking, having pets, etc. 

Even if the landlord has sufficient grounds to terminate the lease, it still can be disputed through court or with the help of the tenant association. The longer you lived on the property in question, the more leverage you have over your landlord. 

Advance Notice and Eviction

There are strictly defined terms of lease termination, and both parties have to provide notice in advance. Tenants have to give a three-month notice in writing, before terminating the lease contract. As for the landlord, that is where it gets tricky. The amount of notice depends on the number of years that the tenants lived on the property. If the tenant occupied the rental for less than five years – 3-month notice, from 5 to 8 years – 6-month notice, and for any period longer than eight years – 9-month notice. If the tenant violated the lease terms, the landlord can initiate the eviction process, and the notice is not needed. However, the eviction can be easily contested in court. 

Tenants Association

In Germany, tenants can get the power of collecting bargaining by joining the tenant association or Mietschutzbund. Most German municipalities have one, and it can assist you in all rent-related questions, including negotiations with your landlord, filling forms, and provide legal advice. The tenant association can even speak on your behalf with the landlord if your rights were violated. Most tenant associations require membership fees for their services. 

Rent Reduction and Withholding

In case of a critical malfunctioning or a defect, such as unsteady heating or broken air conditioning, the tenant can single-handedly reduce the amount of rent without obtaining court approval, in order to compensate for the inconvenience. The reduction has to be proportionate to the problem, and only small deductions will not be disputed. 

In order to start the process, the tenant has to inform the landlord in writing about the problem and allow for sufficient time to fix it. In the case of landlord inaction, the tenant can proceed with the rent decrease. Additionally, if the problem is critical, and the landlord fails to provide an adequate timeline for the repairs, the tenant can choose to withhold rent until the problem is fixed. 

Before withholding rent or reducing the payment amount, we recommend seeking advice from qualified rental law experts, Tenant Association representatives, or the Centre for Consumer Protection in Europe.

Applying for the Rental 

Taking into account the restrictive legal framework of German renting, applicants have to go through a rigorous review and vetting process, which is especially true for indefinite rental agreements. Renting, in most cases, is establishing a long-term relationship with your landlord, and you have to prove your character as well as financial standing. When you are applying for the rental, you can expect to submit: 

• A copy of your residence permit and photo ID
• Proof of income, your job contract together with the payment check for the last three months.  
• Mietschuldenfreiheitsbescheinigung, a certificate that indicates you don’t have rent debts with your previous landlord. 
• A credit report is usually ordered through one of the online rating agencies. 

A rental application is quite a competitive process. If you want your application to stand out, you can supplement it with a letter of recommendation from your school or an employer, and a guarantor letter, in case your income or credit score is not sufficient. The rental market is especially crowded and competitive in Frankfurt am Main, Berlin, Hamburg, Dusseldorf, Cologne, Munich, and Stuttgart. 

Rental Prices

The rates can vary significantly depending on the city and state you choose to reside. Additionally, the location is the key, and you can see substantial price differences in the center and the outskirts. You would also pay more for single-family property, which is rare in most German cities.  

German apartments are usually more compact than elsewhere in Europe. The two-bedroom apartment can easily be under 60 square meters. The rental statistics usually describe market prices in terms of the price per square meter. According to the Federal Institute for Building, Urban, and Spatial Research (BSSR), the average rental price for square meters is €7.99. The priciest apartments can be found in Munich, with an average price of €16.65 per square meter. The second and third place is occupied by Frankfurt am Main and Stuttgart, with prices of €13.09 and €12.62, respectively. Berlin is not that expensive, with an average rental rate of €10 per square meter. The rental prices in small rustic towns can get as low as €4.50 per square meter, but you would have to move deeper into the country. The satellite cities and villages next to significant metropolitan areas are usually not that cheap since Germany has excellent infrastructure for commuters.

Berlin, Germany