Rent increase

Britta Beate Schon is responsible for all legal topics at Finanztip. The doctor of law and lawyer worked as head of the legal department at financial service providers such as Telis Finanz AG and Interhyp. Previously, she taught and researched in Japan as a DAAD Junior Professor of German and European Law. She completed her studies in Munster, Geneva, Regensburg and Leipzig. You can reach the author at [email protected]

  • At the earliest 15 months after moving in or after the last rent increase, landlords may raise the rent up to the local comparable rent.
  • The surcharge may not be higher than 20 percent within three years, in many cities even not higher than 15 percent. This is what the so-called cap means.
  • If you as a tenant do not agree with the rent increase, you can refuse your consent under certain circumstances. Your landlord must then sue for approval.
  • Do not agree to any rent increase that you have not verified. You can use our checklist for this purpose:
  • You can find help at a tenants association, if you are a member, or let conny increase.check legally. If successful, you pay as a fee the savings for four months to the company.

In this guide

The next rent increase is bound to come. Many leases run for decades. The new rent index often prompts landlords to adjust the rent to the local comparative rent. However, they may not simply increase without limit.

When are rent increases allowed?

Landlords are allowed to raise the rent to the local rate. Rents that are customary in the locality according to Rent index on average within the last six years for a comparable apartment in this area were agreed upon (§ 558 Abs. 2 BGB).

New new federal government has announced in the coalition agreement that, for the calculation of local comparative rents, the rental contracts of the last seven years should be included (page 91).

Net rent – In the case of a rent increase, the landlord must base it on the net rent. There are landlords who, in addition to net rent and advance payment of ancillary costs, also demand a monthly amount for cosmetic repairs. This surcharge is to be added if the landlord wants to increase up to the local comparable rent (AG Stuttgart, judgment of 8. March 2016, Az. 35 C 5555/15).

Form – The landlord must increase the rent in text form transmit (§ 558a BGB). So he can send a letter, but also an e-mail to the tenant. This applies even if written form is agreed in the contract for contract amendments (BGH, judgment of 10. November 2010, Az. VIII ZR 300/09).

Justification with rent index – Each increase must be justified. Cities and towns regularly use surveys to determine what the current average rent is in different neighborhoods. The landlord usually bases the increase on the current rent index. For this purpose, he encloses a copy of the rent index or quotes from it and explains where he classifies his apartment there in terms of size, location, year of construction and equipment. The rent index does not have to be sent if it is freely available at the city or municipal administration or it can be found on the city’s website.

But the landlord can justify the increase not with the rent index of Neighboring community justify the increase if there is no rent index in his municipality. Already for this formal reason it can be that the landlord demands unjustly more rent (AG Leonberg, judgement of 25. May 2016, Az. 8 C 702/15).

All rent indexes look a little bit different. As an example you find here excerpts from the rent index for Bielefeld in North Rhine-Westphalia. Net rents are staggered by year of construction and are always given in a range of lower, middle and upper values. You can then classify your own apartment as a tenant with the deductions and surcharges accordingly.

Excerpt from the rent index for Bielefeld

Year of constructionNet rent per monthin €/m²
lower value Mid-middle value upper value
until 1918 5,47 € 6,36 € 7,56 €
1919 – 1949 5,38 € 5,88 € 6,66 €
1950 – 1960 5,39 € 5,75 € 6,39 €
1961 – 1977 5,27 € 5,88 € 6,69 €
1978 – 1994 5,81 € 6,76 € 7,66 €
1995 – 2001 6,36 € 6,94 € 7,61 €
2002 – 2010 5,88 € 7,05 € 8,48 €
2011 – 2017 7,76 € 9,50 € 10,59 €

Applies to standard apartments in apartment buildings in normal residential locations with a size of 20 to 120 square meters and bathroom, toilet and collective heating. Does not apply to publicly subsidized apartments, subleases, commercially used apartments.

Surcharges / deductions per month in €/m²
good/very good residential location + 0,50 €
Small apartment 20 m² to under 40 m² + 1,46 €
large apartments more than 120 m² up to 250 m² – 0,87 €
Barrier-free and energetic full modernization + 1,21 €

Source: Building Authority of the City of Bielefeld (as of September 2020)

Justification with three comparable apartments In small communities there is often no rent index. In this case, the landlord can also justify the rent increase by naming three comparable apartments that already cost what he wants to charge. Comparable means that the apartments must be similar in terms of equipment, location and size. Even in cities where there is a rent index, landlords can justify the rent increase with three comparative apartments.

Landlords must indicate the apartments in such a way that a tenant can find them without major difficulties. So you as a tenant can ask the comparable tenants about equipment and price per square meter. But you have no right to inspect the apartment.

Actual living space is decisive

Even if the rental agreement specifies the living space too large or too small If the actual living space is stated, the landlord may increase the rent only on the basis of the actual size up to the local comparative rent, according to the Federal Court of Justice (BGH, judgment of 18. November 2015, Az. VIII ZR 266/14). In doing so, the landlord must observe any applicable capping limit.

If the size information is missing in the contract, it depends on the real size of the apartment in the case of an increase. For example, if your landlord wants to have more rent and assumes an apartment of about 60 square meters, which is actually only 50 square meters, he may calculate the increase only for the 50 square meters.

But: It is not enough that you as a tenant simply dispute the size assumed by the landlord. In case of doubt, you have to calculate the living space yourself and an allowance submit. You do not have to hire an expert to do this; you can present the results of your own measurement, even if the apartment has sloping ceilings (BGH, ruling dated 31 December 2009). May 2017, Az. VIII ZR 181/16).

Tip: As a tenant, always measure your apartment yourself and do not rely on the information in the lease agreement. This can save some rent. You may need expert help for this. The area under a sloping roof is not counted in full, the same applies to balconies and terraces. How these areas are to be calculated can be seen from the Wohnflachenverordnung (living space ordinance).

How often may the rent increase?

Landlords may one year at the earliest send a rent increase after moving in and then have to pay a Consideration period Concede until the end of the month after next. In fact, the rent can therefore only be increased after 15 months increase (§ 558 Abs. 1 sentence 1 BGB). The same applies to rent increases in tenancies that have already existed for a long time: At the earliest one year after the last rent increase, landlords may announce the next rent increase, which then applies again at the end of the month after next.

Attention: However, this period of one year only applies to rent increases with which the landlord adjusts the amount to the local comparative rent. If the rent was only recently increased due to modernization, it can still be additionally adjusted to local rents.

Rent increase in graduated and index-linked rent inadmissible

Sometimes a graduated rent is also agreed in the rental contract. This means that the rent is automatically increased by a certain amount every year. The increase may also be more than 20 percent within three years. This has the advantage for the landlord that the tenant does not have to agree to each increase again: It is sufficient that he has declared this once at the conclusion of the contract.

The landlord is not allowed to increase the rent beyond that. The same applies to an index rent, where the price increases once a year according to the inflation rate. Rent increases in accordance with the rent index are then taboo.

Download checklist

Our Checklist helps you to check whether your rent increase is permissible.

What limits do landlords have to observe when increasing rents??

Landlords are allowed to increase the rent by 20 percent within three years as part of the adjustment to the local comparative rent (§ 558 para. 3 BGB). The cap does not take into account possible increases due to modernization. The starting point for calculating the limit is not the last current rent owed, but the initial rent applicable three years before the increase request takes effect.

Attention: The cap limits apply during the current tenancy, whereas the Mietpreisbremse applies to new leases.

Lowered cap of 15 percent

The federal states are allowed to set the cap for each five years at 15 percent for cities and municipalities, if the rental housing market is particularly tight there (§ 558 para. 3 BGB). The landlord is then allowed to raise the rent within three years no more than 15 percent increase, even if the local comparative rent has not yet been reached. This currently applies in the following federal states:

    – until 30. June 2025 in 89 cities and municipalities – until 31. December 2021 for 162 cities and municipalities – until 10. May 2023 throughout the city – by 31. December 2025 in 19 cities and municipalities – until 31. August 2024 – by 31. August 2023 – up to 25. November 2025 in 49 cities and municipalities – until the 30. September 2023 for Rostock – by 31. December 2027 in 18 cities and municipalities – until 30. June 2025 in 18 cities and municipalities – until September 30, 2024 in 4 cities – until 30. June 2025 in Dresden and Leipzig – up to 30. September 2024 in Erfurt

The Federal Court of Justice had to review the cap ordinance in Berlin in a case and declared it lawful (ruling of 4. November 2015, Az. VIII ZR 217/14). The state of Berlin was required to set a uniform cap for the entire urban area. Tenants in Berlin can therefore refuse to give their consent if landlords want to increase rents by more than 15 percent.

New: The new federal government has announced in the coalition agreement that it will raise the cap in tight markets to eleven percent in three years to reduce the rent (page 91).

120 percent is the limit – If the rent is more than 20 percent above the rent index, it is excessive. In cities where housing is scarce, tenants can cap their payments at 120 percent (§ 5 para. 2 WiStG). In addition, he can reclaim the overpaid amounts for the last three years.

Rent cap in Berlin ineffective

The Federal Constitutional Court has declared the rent cap null and void (Az. 2 BvF 1/20, 2 BvL 5/20, 2 BvL 4/20). This was introduced by the state of Berlin two years ago. Rent increases are therefore possible again. Rents are no longer frozen. You can find more information on this in our blog article Rent cap.

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Do tenants have to agree to a rent increase?

The law stipulates that as a tenant you must agree to any rent increase. The landlord must ask you to do this in his letter of increase. However, you cannot simply say "no", but only refuse consent if the rent increase is not lawful. This is the case, for example, if your landlord justifies the increase by saying that the apartment is particularly well equipped, but it is actually only average.

Consideration period – Landlords must allow a period for consent. This allows tenants to check at their leisure whether the rent increase is permissible. This cooling-off period or consent period begins with the receipt of the landlord’s letter and ends at the end of the second month (§ 558b para. 2 sentence 1 BGB). The deadline is therefore at least two months and at most one day less than three months.

Example: Does the letter of your landlord on 5. May, then the period ends on 31. July. Does the rent increase go to you on 30. July to, you can until 30. September consider.

If you as a tenant refuse to agree to the rent increase, your landlord can only demand the higher rent by going to court and suing for consent. He must do so within three months of the expiry of the consent period (§ 558b para. 2 sentence 2 BGB). It is also possible that you as a tenant only partially agree, for example, because your landlord has not observed the cap.

Formless consent – The consent to the rent increase is form-free. That is, it can also be pronounced verbally or even tacitly Can be done by you, the tenant, simply paying the higher rent. The Federal Court of Justice has ruled that tenants agree in any case if they transfer the increased rent several times without reservation, even if they have not given their written consent (BGH, decision of 30. January 2018, Az. VIII ZB 74/16).

Tip: Don’t just pay the increased rent directly, but take the cooling-off period and calmly check whether the rent increase is permissible in the amount demanded.

No right of revocation

Once you have agreed to the rent increase, you cannot revoke your declaration of consent. There is no right of revocation under distance selling law because the tenant is sufficiently protected by the statutory provisions on rent increases (BGH, ruling dated 17. October 2018, Az. VIII ZR 94/17). Therefore, take advantage of the period that you have to think about – and do not agree to the increase hastily. Because you can not undo this again.

Son-der-kun-di-gungs-recht

In addition, you as a tenant are entitled to a son-der-kun-di-gungs-recht in the event of a rent increase. Within the consent period, you can terminate the apartment with a notice period of only two months.

May landlords after a modernization to increase the rent?

In addition to the rent increase up to the local comparative rent, there is the possibility for landlords to increase the rent after a modernization. If a landlord upgrades his property by adding balconies or installing an elevator, he can pass on the costs of the modernization to the rent (§ 559 BGB). But not every renovation is reason for a rent increase.

If the landlord only replaces a broken window with an equivalent one, then that’s standard maintenance. Your landlord is not allowed to allocate the costs to the rent.

Since 1. January 2019, it may be up to 8 percent from the Modernization costs to be added to the annual rent. If he has received public subsidies for the modernization, the amount he actually had in modernization costs is reduced. Accordingly, he may allocate less to the rent.

You can find more information on this in our guide Modernization of a rented apartment.

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