Tenants in Germany 'not allowed to make a profit from sublets'

The ruling concerns a case where a tenant in Berlin paid €460 per month in rent, but charged a subtenant €962 to live there temporarily while he was abroad – more than double the original amount. 

The case, which The Local previously reported on, has attracted national attention due to Germany’s worsening affordable-housing crisis, which affects large cities like Berlin and Munich. 

The landlord accused the 43-year-old tenant of exploiting the subletter to make money rather than simply covering rental costs and took him to court. 

On Wednesday, Germany’s highest civil court agreed. While tenants are generally allowed to sublet all or part of their apartment in Germany with the landlord's permission, the judges said that this right has limits. 

"The purpose of subletting... is not to provide the tenant with an opportunity to make a profit," they said in the ruling. 

The Berlin Court previously ruled that the surcharge was disproportionately high and went against rent control laws. 

Now that the BGH has confirmed the decision, the ruling – and eviction order of the tenant by the landlord – is final.

READ ALSO: Why more and more renters in Germany are suing their landlords

Furnished apartments and surcharges

The court acknowledged that higher sub-rents are not automatically illegal. Additional charges for furniture, utilities, internet or short-term use can be justified in principle.

In the case in question, the tenant argued that he charged a higher price because the apartment was fully furnished. 

However, the judges said the increase in rent has to be reasonable. They said the items listed by the tenant, including a TV sound system, dishwasher and washing machine, did not justify hiking the rent up so high. 

The Justice Ministry is currently working on a draft law aimed at regulating the rental of furnished living space more strictly.

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What the ruling means for renters

The decision has wide implications for the rental market. It could worry main tenants who sublet their apartments, especially in cities like Berlin where the practice is widespread. 

A reader comment on the story in Berlin's Tagesspiegel summed up the issue. They said: "Unfortunately, this is a very big problem in Berlin: old contracts with low rents are retained and sublet at much higher prices.

"The gap here is enormous. For an apartment (70 square metres, two rooms) with an old lease in Prenzlauer Berg, you might pay around €500, but now you can easily charge €1,800, and the new subtenants are even happy to find an apartment at that price. The difference is a nice income."

The ruling strengthens the position of subtenants, giving them some legal backing. They may be able to successfully challenge excessively high rents. 

Following this case, landlords may also now scrutinise subletting arrangements more closely. 

Tenants associations backed the ruling and called out excessively high rents from both main tenants and landlords. 

“Many people are dependent on subletting because they have no chance on the regular housing market," said Melanie Weber-Moritz, president of the German Tenants' Association.

"This plight must not be exploited – neither by landlords nor by main tenants."