How much can you sublet your apartment for in Germany?

A ruling by the Federal Court of Justice last week effectively confirmed that tenants who sublet their apartment in Germany are not entitled to make a profit.

Furthermore it reaffirmed that the rent price brake also applies to sublets, and that subletting without your landlord's permission can be grounds for eviction.

In exceptionally tight urban rental markets – such as those in Berlin, Hamburg or Munich for example – a large number of tenants sublet all or part of their homes. Often to reduce their own living costs by sharing their homes, or to maintain their tenancy when they go abroad.

If you are thinking about subletting your own home you may be wondering exactly how much you can justifiably charge. Here are the main rules to know, including what's changed following the recent court ruling.

How much can I charge for a sublet?

In the aforementioned case, a tenant in Berlin was paying €460 per month in rent but then charged his subtenant €962 per month to live in the apartment while he was away. This put the rent for the sublet well above the limit for what could be charged for the apartment according to the rent brake.

Germany's rent price brake (Mietpreisbremse) limits the maximum rent that can be charged in areas designated as competitive rental markets.

In these areas, which are currently found in 400 municipalities across the nation, the rent price for an apartment is capped at 10 percent above the average price for a comparable apartment in the surrounding area, which is determined by the rent price index (Mietspiegel).

READ ALSO: EXPLAINED - How Germany's extended rent brake will impact tenants

In an interview with Tagesspiegel, managing director of the Berlin Tenants' Association, Wibke Werner, explained that the ruling clarifies that subletting "may not serve to make a profit, but only to cover the apartment-related expenses of the main tenant." 

So in setting a rent price for a sublet the safest option is simply to charge the subtenant the same price that you pay to live in the apartment, including rent as well as the monthly average cost of utilities and other recurring costs.

What if I'm subletting a single room?

The rent brake does not apply to sublets or rental agreements for a single room or part of an apartment where the primary tenant still lives.

So if you plan to sublet a room in your house while you continue living there you'll have a bit more freedom to determine the price, provided your landlord is okay with you subletting part of the apartment.

If the landlord did not explicitly grant permission for you to sublet, however, charging excessive rent here could be grounds for a termination of your rental contract.

The safe, and arguably fair, way to set the rent price for a one-room sublease is to calculate the proportionate rent price for the liveable space that the subtenant has access to.

This means calculating the rent price per-metre for the apartment, and applying that to the area of the room that is being sublet plus the area of common areas like the kitchen and bathroom.

Can I charge more for included furniture?

Furnished flats, as well as extensively remodelled ones, are also exempt from the rent brake in many cases. Landlords taking advantage of this loop-hole, by charging high rent prices for apartments that come with a cheap bed and a desk for example, has become a common occurrence.

However exceeding the rent brake based solely on included furnishings may still leave you open to legal challenges.

Experts advise that a generally accepted rule of thumb is adding about two percent of the current value of the included furniture to the rent price as a monthly surcharge.

What other rules should I be aware of?

To avoid legal trouble or other disputes, you should always inform your landlord before subletting your apartment, or part of your apartment. 

If your landlord does not immediately give you permission to sublet your place, you may be legally entitled to do so in Germany if you can show that you have "legitimate interest". Legitimate interest here means you either do not want to live alone and / or need to offset your rental costs due to financial constraints.

READ ALSO: Q&A - What are the rules for subletting your apartment in Germany

Once you've secured permission from your landlord to sublet all or part of your home, the rental price agreed between you and the subletter would not usually of any concern to your landlord.

However, following the latest Federal Court of Justice decision, experts suggest that landlords could ask to check the sublease agreement if they expect that you are exceeding the limits of "legitimate interest" i.e. profiting from the sublet.