Tenancy Law

Dampness, noise, a large retroactive utility bill, or an announced rent increase can put a strain on a tenancy within just a few weeks. Even more drastic are notices of termination—whether due to the landlord’s personal need, rent arrears, or alleged breaches of contract. They affect housing, and in Berlin, housing cannot be replaced on short notice.

The legal assessment in such cases almost never hinges on a single issue. The decisive factors are the lease agreement, the actual use of the premises, the condition of the premises, and the mandatory protective provisions of the Civil Code. Residential and commercial leases do not follow the same rules, and there is a fine line between maintenance, modernization, and a mere alteration of the leased property—a line that determines who is responsible for tolerating the change and who pays for it.

I primarily represent tenants—in cases involving notice of termination, rent increases, utility bills, and property defects. On the landlord’s side, I step in when payments are overdue, the premises are being used in a manner other than agreed upon, or necessary repairs cannot be carried out. My approach can be summed up in three sentences.

First: The first step is to determine whether a notice meets formal requirements—even a termination that is substantively justified can be invalidated due to a procedural error, and an incorrect settlement can be invalidated due to a missed deadline.

Second: You'll get an assessment, even if it's uncomfortable; I'll tell you up front that this process isn't worth it.

Third: We clarify the cost before any work is commissioned.

This page describes common questions regarding residential and commercial leases, covering just a portion of the topic. In addition, similar questions arise regarding subletting, security deposits, structural alterations, the return of the premises, and claims after the lease ends.

An Overview of the Topics

Termination and Eviction — Grounds, Procedure, and Hardship Cases

According to Section 568 of the German Civil Code (BGB), notice of termination of a residential lease must be in writing. For a regular termination, the landlord must have a legitimate interest under Section 573 of the German Civil Code (BGB)—possible grounds include a culpable and significant breach of duty, personal need, or reasonable economic utilization, the prevention of which would result in significant disadvantages. Termination solely for the purpose of raising the rent is not permitted. The content of the written notice is decisive: Reasons provided after the fact are of only limited help later on.

For tenants, the notice period specified in § 573c(1) of the German Civil Code (BGB) generally applies to open-ended residential leases. The landlord’s notice period is extended by three months each after five and eight years from the date the premises were made available. Termination without notice under §§ 543 and 569 of the German Civil Code (BGB) requires good cause; in the case of late payment, the amount, duration, and composition of the arrears are decisive—not merely the total amount.

The most important practical point is as follows: A payment made during the grace period pursuant to Section 569(3)(2) of the German Civil Code (BGB) can render a termination without notice due to late payment invalid—however, according to the case law of the Federal Court of Justice (BGH), a termination with notice issued in addition to this does not automatically nullify it. The Federal Court of Justice most recently reaffirmed this position in its ruling of November 27, 2024, VIII ZR 159/23. A tenant who makes a back payment and thereby considers the matter settled may still lose the tenancy.

An objection on grounds of undue hardship may be raised against a landlord’s notice of termination under the conditions set forth in § 574 of the German Civil Code (BGB). The decisive factor is a balancing of both parties’ interests; § 574a BGB allows for the continuation of the lease for a reasonable period of time. The objection must be filed within a specified time limit and must be substantiated—age, illness, the duration of the tenancy, and the situation on the housing market must be demonstrated, not merely asserted.

The first things I check are the type of notice of termination, the date of receipt, the form, the reason, and the grounds for termination. Only then can I determine whether the lease has been terminated and whether there are any objections or requests for continuation that would preclude termination.

Defects and Rent Reduction — Condition of the Rented Premises

Mold, moisture, heating system failure, construction noise, defective pipes, or a significant deviation from the agreed-upon condition may constitute a rental defect. According to Section 536 of the German Civil Code (BGB), the rent is then reduced by law, provided that the property’s fitness for use is impaired to a more than negligible extent. In the event of complete suspension, the obligation to pay rent for the affected period is waived. The reduction therefore takes effect without the need for a formal declaration—which is also its risk.

This is because the amount of the reduction depends on the condition of the specific rental property. There is no universally applicable rate. The reduction tables circulating online are compilations of past individual cases and do not replace an assessment of the actual damage. The cause also matters—moisture resulting from construction work is treated differently than moisture caused by ventilation practices.

Section 536c of the German Civil Code (BGB) requires the tenant to promptly report any defect that arises during the lease term. If the tenant fails to report the defect and the landlord is therefore unable to remedy it, the tenant’s rights may be limited and claims for compensation may arise. In addition, compensation for damages or reimbursement of expenses may be considered under Section 536a of the German Civil Code (BGB). If the tenant was already aware of the defect at the time the lease was entered into, Section 536b of the German Civil Code (BGB) may limit the tenant’s rights regarding defects.

Unilaterally reducing the payment is therefore the riskiest course of action: If the assumed reduction later turns out to be too high, a payment arrears will result—and thus grounds for termination. The first things I consider are the condition owed under the contract, the onset and extent of the defect, and the knowledge of both parties. After that, a decision must be made as to which remedies for defects coexist.

Rent Levels and Rent Increases — Limits and Justification

A distinction must be made between the rent at the start of the lease and subsequent increases. In areas with a tight housing market, Section 556d(1) of the German Civil Code (BGB) generally limits the initial rent to the local comparative rent plus ten percent. Exceptions may arise under Sections 556e and 556f of the German Civil Code (BGB)—such as a higher previous rent, a new building, or extensive modernization. Legal consequences and rights to information are governed by Section 556g of the German Civil Code (BGB).

Whether this limit applies at all to a specific lease agreement is a separate issue. The authorization under federal law was extended through the Act Amending the Regulations on Permissible Rent Levels at the Start of a Lease, which took effect on July 23, 2025, and remains in effect until the end of 2029. However, it applies only in conjunction with a valid state-level zoning ordinance—and the validity of such ordinances has repeatedly been the subject of legal proceedings.

During the term of a lease, a rent increase up to the local comparative rent may be considered pursuant to Sections 558 through 558b of the German Civil Code (BGB). Section 558 of the BGB requires, among other things, that the rent has remained unchanged for fifteen months as of the intended date of the increase; the request may be made no earlier than one year after the last increase. For graduated and index-linked rents, Sections 557a and 557b of the German Civil Code (BGB) apply instead—in such cases, the rent index is of no help.

Effective July 1, 2022, the Rent Index Reform Act and the Rent Index Regulation have revised the requirements for the preparation, documentation, and publication of rent indexes. This is significant when justifying a request for a rent increase, as it determines the evidentiary value of a rent index in the first place.

The first thing I clarify is the nature of the request: initial rent, a rent increase based on comparable rents, an index-linked or graduated rent, or an increase due to modernization. This determines which standard applies and whether the notice can be formally effective.

Operating and Heating Costs — Allocation and Billing

The tenant is responsible for operating costs only if this has been agreed upon. Section 556 of the German Civil Code (BGB) and the Operating Costs Ordinance cover the ongoing costs associated with ownership or the intended use of the property. Maintenance, repairs, and management are not included. A statement of account may therefore include items that were actually incurred but may not be allocated to the tenant—this is the most common point of dispute.

In the case of advance payments, an annual settlement must be provided. As a general rule, the settlement must be received by the tenant no later than the end of the twelfth month following the end of the settlement period; after that, additional claims are generally precluded, provided the landlord is responsible for the delay. Conversely, the tenant’s objections must generally be raised within twelve months of receipt. Both deadlines run automatically—and both determine the course of proceedings before disputes over individual items arise. Section 556a of the German Civil Code (BGB) stipulates that, in the absence of a different agreement, living space serves as the basis for apportionment.

Effective in 2023, the Carbon Dioxide Cost Allocation Act applies to billing periods beginning on or after January 1, 2023. It allocates certain CO₂ costs between landlords and tenants; for residential buildings, the share is determined by the building’s energy efficiency classification. Contractual provisions may not exceed the tenant’s statutory share.

The following must be reviewed: the apportionment agreement, cost element, allocation basis, and calculated distribution—in that order. Based on this, it can be determined whether there is a formal billing error, an item that is substantively unjustified, or merely a disputed assessment of individual costs.

Lease Agreement and Use — Terms of the Agreement and Type of Lease

Section 535 of the German Civil Code (BGB) requires the landlord to make the rented property available for the agreed-upon use and to maintain it in suitable condition; the tenant is obligated to pay the rent. Disputes rarely concern these basic obligations themselves, but rather their specific terms: Do the basement, parking space, or garden form part of the rental property? Is conducting business in the apartment permitted? Was a specific level of amenities or living space agreed upon?

Whether the lease is classified as a residential or commercial lease sets the course—it determines protection against termination, rent caps, and flexibility in contract terms. The title of the contract does not determine this. In cases of mixed use, it must be determined which purpose predominates based on the terms of the agreement and the actual circumstances. Sections 540 and 553 of the German Civil Code (BGB) apply to subletting to third parties; the Federal Court of Justice confirmed in its ruling of September 13, 2023, VIII ZR 109/22, that a claim for permission to sublet a portion of the property may exist even in the case of a one-room apartment.

Standard form clauses are also subject to review under Sections 305 through 310 of the German Civil Code (BGB)—this applies to cosmetic repairs, minor repairs, keeping pets, and restrictions on use. Rigid renovation deadlines may be invalid. However, the implications of this are limited: An invalid clause regarding cosmetic repairs does not automatically result in a surcharge on the local comparative rent, as the Federal Court of Justice ruled in its decision of July 9, 2008, VIII ZR 181/07.

The first thing I examine is the legal classification of the premises and their agreed-upon use. Next, I must determine whether the dispute stems from the contract, from an invalid clause, or from a subsequent change in use.

Maintenance and Modernization — Measures and Cost Implications

Maintenance measures preserve the property’s existing condition as specified in the lease, while modernizations alter or improve it. This distinction determines who bears the cost: Section 535 of the German Civil Code (BGB) assigns the responsibility for maintenance to the landlord, whereas modernization, under the conditions set forth in Sections 555b through 559b of the BGB, may result in an obligation to tolerate such work and a subsequent rent increase. In practice, these two categories are often conflated.

According to Section 555c of the German Civil Code (BGB), notice of renovations must generally be given in writing no later than three months before they begin. The notice must specify the nature of the work, the anticipated scope, the start date and duration, as well as the expected impact on rent and operating costs. Section 559 of the German Civil Code (BGB) permits an increase in the annual rent of eight percent of the apportionable costs incurred for the apartment—maintenance contributions and eligible subsidies must be excluded from this calculation.

As of October 17, 2024, Section 554 of the German Civil Code (BGB) expressly covers structural modifications made to generate electricity using plug-in solar devices. The tenant may request permission, provided that the modification is reasonable for the landlord, even when the tenant’s interests are taken into account. This is neither an unconditional permission for every system nor an outright ban—reasonableness is the actual point of contention. The same provision covers measures to reduce accessibility barriers, to charge electric vehicles, and to prevent break-ins.

Commercial Leases — Contractual Obligations and Risk Allocation

For commercial spaces, there is significantly more flexibility in contract drafting than for residential properties. Notice periods, operational obligations, protection against competition, maintenance, operating costs, and rent adjustments can be regulated in great detail. Consequently, everything depends even more on the interpretation of the contract—and even fewer provisions can be applied from residential tenancy law. Anyone who assumes that a protective provision familiar from residential tenancy law applies here is often mistaken.

As of January 1, 2025, the text form is generally sufficient for long-term real estate and commercial lease agreements under Section 578(1) of the German Civil Code (BGB); previously, the stricter written form applied by reference to Section 550 BGB. If the required form is not met for a lease term of more than one year, the contract is deemed to have been concluded for an indefinite period—with the consequence that it may be terminated by giving notice. For leases entered into before January 1, 2025, Article 229 § 70 of the Introductory Act to the German Civil Code (EGBGB) contains transitional provisions.

The written form facilitates electronic amendments but does not eliminate the underlying risk. The long-term contract must still be documented in such a way that the parties, the leased property, the rent, and the term remain clearly identifiable. Subsequent amendments, changes in square footage, and verbal side agreements can affect the binding nature of the contract—and are usually only noticed when one party wants to withdraw.

Rights regarding defects under Sections 536 et seq. of the German Civil Code (BGB) generally apply to commercial premises as well, but may be contractually limited to a greater extent than in the case of residential premises. In the event of business closures and similar disruptions, general provisions of the law of obligations may also apply; however, this does not lead to any blanket conclusions.

The first thing I review is the contract structure, including all amendments and attachments. Next, I determine whether there is a long-term commitment, what risk allocation has been agreed upon, and what the legal limits are.