Subletting in Germany: BGH Clarifies Limits on Profit – What Tenants and Landlords Need to Know (2026)
The German Federal Court of Justice (BGH) has ruled that subletting with profit is impermissible and can lead to a termination by the landlord. The details and the context:
1. Why this ruling matters
Germany is known for its tenant-friendly rental laws, and many expatriates living in cities like Berlin, Munich or Hamburg rely on subletting arrangements when they travel, move temporarily abroad, or need financial relief.
However, a recent decision by the German Federal Court of Justice (BGH) has drawn a clear line: subletting is meant to reduce housing costs, not to generate profit.
This ruling is particularly important for furnished apartments, where tenants often assume that charging significantly higher rent is automatically justified.
2. The case: what happened?
The tenant had rented a two-room apartment in Berlin since 2009. The net rent (cold rent) was about €460, later increasing to €497.35.
During an extended stay abroad, the tenant sublet the apartment to two subtenants. The sublease agreement charged a net cold rent of €962, plus utilities, resulting in a total rent of €1,100 per month.
The tenant did not obtain explicit permission for this subletting arrangement.
The landlord later discovered the situation, issued a warning, and ultimately terminated the main lease agreement.
The BGH upheld the termination and ordered the tenant to vacate.
3. The legal framework: subletting in German tenancy law
3.1 General rule: landlord permission is required
Under German law, a tenant may not simply allow another person to use the apartment. According to § 540 BGB, the tenant generally needs landlord consent before granting use of the property to a third party.
This is a key difference compared to some other jurisdictions where tenants have broader rights to sublease.
3.2 Partial subletting: tenant’s right under § 553 BGB
For residential apartments, German law provides a tenant-friendly exception:
Under § 553 BGB, a tenant may demand permission to sublet part of the apartment if, after signing the lease, the tenant develops a legitimate interest (berechtigtes Interesse) in doing so.
A legitimate interest can include:
- temporary stay abroad
- financial reasons (wanting to reduce rental expenses)
- change in personal circumstances (e.g., moving in with a partner elsewhere)
Importantly, the BGH reiterates that the tenant does not need to prove financial hardship. Wanting to reduce rental expenses is sufficient.
4. What the BGH clarified: subletting is not meant for profit
The crucial point of the ruling is the following:
Reducing costs = legitimate interest. Making profit = not legitimate.
The BGH held that a tenant’s wish to reduce housing expenses is generally legitimate under § 553 BGB.
But the Court explicitly ruled:
Subletting with the purpose of earning a profit beyond covering housing-related expenses is not covered by § 553 BGB.
So while German law protects tenants who want to keep their apartment and reduce costs, it does not allow tenants to transform the rental unit into a private business model.
5. What counts as “housing-related expenses”?
The Court did not define an exhaustive list, but the concept clearly includes:
- the tenant’s own rent obligations (net cold rent)
- utilities and operating costs (Nebenkosten)
- heating costs
- possibly other apartment-related costs directly connected to use of the premises
If the subtenant pays more than these expenses, the tenant is effectively generating profit – and then cannot demand permission under § 553 BGB.
This is highly relevant in large cities, where market sublease rents are often much higher than older long-term lease rents.
6. Consequences for tenants: what risks exist?
6.1 No permission claim = high termination risk
If the tenant charges excessive subrent and therefore lacks a legitimate interest under § 553 BGB, the landlord may refuse permission.
If the tenant sublets anyway, the landlord can terminate the lease due to a serious breach of contract.
That is exactly what happened here: the termination was upheld.
6.2 Subtenants have weak protection
A major practical consequence is that subtenants may lose their housing quickly.
German law grants subtenants less security than main tenants. If the main lease ends, the landlord may demand that the subtenant vacates as well.
The BGH explicitly emphasized that this risk is part of the system: subtenants must bear the risk that the main tenant lacked the right to sublet.
7. Consequences for landlords: what does this decision strengthen?
From a landlord perspective, the decision provides clear support against abusive subletting.
Landlords may refuse consent where:
- the sublease rent is clearly excessive compared to the tenant’s own housing costs,
- the tenant effectively uses the apartment for profit,
- the subletting resembles a commercial exploitation of the landlord’s property.
This strengthens landlords’ legal position, especially in cities with strong rent regulation.
8. The key practical question: Can tenants still charge extra for furnished apartments?
Yes – but only within limits.
The BGH decision does not prohibit furnished subletting. It also does not state that no additional rent may be charged for furniture.
However, it makes one thing very clear:
A furniture surcharge is only acceptable if it remains within the concept of “covering housing-related expenses”.
If the furniture surcharge becomes a tool to justify an excessive rent and generate profit, it will not be protected under § 553 BGB.
9. How can a furniture surcharge still be calculated legally?
This is the part that matters most for real-life subletting.
German tenancy law does not provide one universally binding formula for furniture surcharges, but German courts generally accept a reasonable depreciation-based approach.
A typical method used in practice (and often accepted by courts and legal literature) is:
Furniture value ÷ expected useful life = monthly surcharge
A common assumption is a useful life of 5 to 10 years, depending on quality.
Example:
Furniture replacement value: €6,000
Useful life: 10 years (120 months)
Monthly furniture surcharge: €6,000 ÷ 120 = €50/month
If furniture is high-quality and new, a shorter depreciation period (e.g. 5 years) may be argued, but then the surcharge increases accordingly.
Additional accepted elements
A lawful furniture surcharge may also reflect:
- wear and tear risk
- maintenance/repair costs
- insurance costs for furniture (if applicable)
But it must remain proportionate.
10. The “profit problem”: why high furnished surcharges are risky after this ruling
The BGH criticized that the tenant in the case charged more than double the main rent and did not sufficiently justify why such an increase would be appropriate due to furniture.
This implies:
A furniture surcharge must be transparent and defensible.
If a tenant charges e.g. €300–€500 extra per month for basic IKEA furniture, this will likely be seen as an attempt to disguise profit.
In the Berlin case, the Court found it not plausible that the inventory could justify a surcharge in the range of €200+ per month. VIII_ZR_228-23.pdf;jsessionid=8…
11. How does rent control (“Mietpreisbremse”) interact with subletting?
The apartment was located in Berlin, a designated tight housing market area. Therefore, rent control rules under §§ 556d ff. BGB (“Mietpreisbremse”) applied.
The lower courts had already argued that a landlord would not have to permit subletting if the agreed subrent violates rent control.
The BGH did not decide this issue conclusively because it already denied the tenant’s claim due to profit-making. VIII_ZR_228-23.pdf;jsessionid=8…
Nevertheless, the ruling strongly suggests that courts will increasingly scrutinize sublease rents under rent control rules, especially in regulated areas.
12. Practical guidance: what tenants should do before subletting
Tenants planning to sublet should:
- request written permission in advance,
- explain their legitimate interest (e.g. temporary stay abroad),
- calculate rent carefully:
- base rent should correspond to tenant’s own rent share
- utilities can be passed through realistically
- furniture surcharge must be reasonable and provable
A good practical approach is to prepare a breakdown:
- main rent (cold rent)
- utilities advance payments
- internet / electricity (if included)
- furniture surcharge calculation (depreciation model)
This documentation can be decisive in a dispute.
13. Practical guidance: what landlords should do
Landlords should:
- request a copy of the draft sublease agreement,
- verify the rent level and subtenant identity,
- check whether the tenant is trying to exploit rent regulation,
- consider warning letters early if subletting occurs without permission.
This ruling confirms that landlords can defend themselves against abusive subletting models.
14. FAQs
Can I sublet my apartment while I am abroad?
Yes, in principle. German law allows tenants to sublet part of their apartment if they develop a legitimate interest after signing the lease, such as a temporary stay abroad. However, landlord permission is required, and the subletting must not be profit-oriented.
Can my landlord refuse permission just because they do not like subletting?
No. If the legal requirements of § 553 BGB are met, the landlord must grant permission unless there are specific reasons to refuse (e.g. overcrowding, an unsuitable subtenant, or an unreasonable burden on the landlord).
Can I charge “market rent” when subletting?
Generally no. The BGH has made clear that subletting is not intended to generate profit. Charging market rent that significantly exceeds your own housing-related costs may invalidate your right to permission and expose you to termination of the main lease.
Does rent control (Mietpreisbremse) apply to subletting?
In tight housing markets (such as Berlin), rent control rules may apply to subleases as well. While the BGH did not finally decide this issue in the case, the decision strongly indicates that excessive sublease rents will face close judicial scrutiny.
Is furnished subletting treated differently?
Furnishing does allow for an additional surcharge, but only within reasonable limits. Furniture may justify a moderate, cost-based supplement, not a substantial increase designed to generate profit.
What happens to the subtenant if the main lease is terminated?
Subtenants enjoy less protection than main tenants. If the main lease ends due to unlawful subletting, the landlord can generally demand that the subtenant vacate the apartment as well.
Can I sublet the entire apartment?
§ 553 BGB only grants a statutory right to partial subletting. Subletting the entire apartment typically requires explicit contractual permission. Temporary absence does not automatically allow full subletting.
How to Calculate a Lawful Sublease Rent (Including Furniture)
To comply with German law after the BGH ruling, the sublease rent should be based on cost coverage, not profit.
Step 1: Determine Housing-Related Monthly Costs
| Cost component | Amount (€) |
|---|---|
| Main rent (net cold rent) | 500 |
| Utilities (advance payment) | 150 |
| Heating | 80 |
| Internet / electricity (if included) | 70 |
| Total housing-related costs | 800 |
Step 2: Calculate a Reasonable Furniture Surcharge
A commonly accepted method is straight-line depreciation.
Formula:
Furniture replacement value ÷ useful life (months) = monthly furniture surcharge
Example:
| Item | Value (€) |
|---|---|
| Total replacement value of furniture | 6,000 |
| Assumed useful life | 10 years (120 months) |
| Monthly furniture surcharge | 6,000 ÷ 120 = 50 |
Step 3: Total Permissible Sublease Rent
| Component | Amount (€) |
|---|---|
| Housing-related costs | 800 |
| Furniture surcharge | 50 |
| Maximum defensible sublease rent | 850 |
This amount reflects cost recovery, not profit. It is far more likely to be accepted by landlords and courts.
Why Excessive Furniture Surcharges Are Risky
The BGH made clear that furniture cannot be used as a justification for disproportionate rent increases. In the decided case, a surcharge in the range of several hundred euros per month was considered implausible.
As a rule of thumb:
- modest, well-documented furniture → low double-digit monthly surcharge
- high-quality, new furniture → higher surcharge possible, but still proportionate
- vague or undocumented furniture value → high legal risk
If the furniture surcharge leads to income exceeding the tenant’s total housing-related expenses, the subletting is likely to be classified as profit-driven and therefore unlawful.
Practical Tip for Expats
Before subletting, prepare a transparent cost breakdown and submit it together with your permission request to the landlord. This signals good faith and significantly reduces the risk of disputes or termination.
Further questions?
Do you have any further questions regarding rental law in Germany? Would you like to have another aspect covered in this article? Or do you have any other legal subject that troubles you in Germany? Then drop us an email.