Tenancy law: What will change in 2016 in Germany

Several changes to tenancy and housing law occurred at the beginning of the year. Tenants rights have been expanded, but utility costs may rise. This is because around 38 percent of municipalities are planning to raise residential property tax this year, and these costs are generally passed on to tenants via the utility costs.

Tenancy law: What will change in 2016Rental price brake

The scope of the so-called rental price brake (actually "Law for Curbing Rental Increases On Tight Housing Markets") is to be extended. Where the brake applies, the rental prices for new leases may not exceed the standard median rent in the respective city district by more than ten percent. This, however, does not apply to initial lettings of new developments and old buildings which were comprehensively modernized. Since its introduction in June 2015, nine federal states so far have implemented the rental price brake in some regions.

Since 1 January, the rental price brake is in effect in 31 municipalities in the state of Brandenburg. Thuringia is planning to introduce the price control in Erfurt and Jena in the first half of the year. Lower Saxony will be introducing a rental price brake in twelve cities in mid 2016. The local governments of Mecklenburg-Western Pomerania, the Saarland, Saxony-Anhalt and Saxony currently see no need for the introduction of a rental price ceiling.


A rental law amendment is planned for this year that will, inter alia, limit the apportionment of modernisation costs per rent increase to eight instead of eleven percent. After a modernisation, a rent cap shall apply for eight years. The bill is expected in spring.

Smoke detectors

Every year, 400 people in Germany die as a result of apartment fires. Most of them die in their sleep due to smoke poisoning. Berlin and Brandenburg are the last two federal states this year to make smoke detectors compulsory. In Saxony, smoke detectors have been compulsory since 1 January. In some federal states, the tenants themselves are responsible for maintaining the smoke detectors in their apartment.

Commercial use: What is permitted?

Tenants who use their apartment for commercial purposes without the approval of their landlord could see their leases terminated without notice (Federal Court Ref.: VIII ZR 165/08). Subletting can also lead to a termination of the lease if the lessee does not request prior permission from the lessor.

In general, tenants may not use their apartment for commercial purposes. Excluded are activities that do not disturb other tenants, such as normal office work. This does not require the approval of the lessor. But if a tenant is frequented by customers on a regular basis, this would, according to the Federal Court of Justice, constitute an activity with an impact on third parties, and must therefore be approved by the landlord.

If a tenant uses his apartment for commercial purposes, for example as an insurance broker receiving customers, he should ask the landlord for permission to be on the safe side. If the commercial use does not affect the apartment itself or the neighbours beyond the usual scope, the landlord must generally grant permission.

Subletting is also considered as commercial use and is therefore subject to approval. If a legitimate interest exists, the landlord is obliged to grant permission. Tenants who rent out individual rooms or their entire apartment to holiday guests without permission risk being reprimanded or even having their lease terminated.

If you would like to rent a house or an apartment, Engel & Völkers will help you find the most beautiful and exclusive real estate. Our distinguished real estate experts are at your service worldwide to advise you and support you in your search for the perfect home or dream holiday home.

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