Wegweiser Owners & Builders · Buying, building, owning Deutsch

🗝️ Letting by owners

If you let property, you have duties: deposit, rent brake, grounds for termination. Tenancy law is a topic area of its own.

In brief

Landlords may demand a deposit of at most three times the monthly rent excluding running costs. Tenants may pay it in three instalments. You must invest the deposit separately from your own assets.

In areas with a tight housing market, the rent at the start may be at most 10 percent above the local comparative rent (rent brake). Whether your area is included is determined by the state by ordinance. It ends at the latest at the end of 2029.

You may terminate only with a legitimate interest, for example your own use. The reason must be stated in the termination letter.

Step by step

  1. Draw up the contract properlyCheck deposit, rent and running costs.
  2. Check the areaFind out whether your area falls under the rent brake (ordinance of your state).
  3. Invest the depositInvest the deposit separately at a bank.
  4. Give reasons for terminationState the reason for termination in the letter and get advice.

Deadlines

3 months' rent
Maximum rent deposit (excluding running costs)§ 551 Abs. 1 BGB
10 percent
Upper limit above the local comparative rent in tight housing market areas§ 556d Abs. 1 BGB
31 December 2029
Latest end of the rent brake ordinances§ 556d Abs. 2 BGB
3 years (state up to 10 years)
Block on termination for own use after conversion into a condominium flat and sale§ 577a BGB
Watch out – common mistakes
  • Tenancy law is strict in favour of tenants; mistakes make terminations invalid.
  • Whether an area counts as a tight housing market is determined by the state (depends on the state).
  • A termination solely to raise the rent is not permitted (§ 573 BGB).
  • Tax treatment of rental income: not covered here; ask the tax office (Finanzamt) or a tax adviser.
  • In Bavaria, North Rhine-Westphalia and Berlin there are ordinances under § 556d Abs. 2 and § 577a Abs. 2 BGB; areas and terms not currently checked (Berlin: not checked in full text).
In depth · legal basis, figures and practice – for advisers and professionals

Deposit

§ 551 BGB: at most three times the rent for one month, running costs not included. The tenant is entitled to pay in three equal monthly instalments; the first at the start of the tenancy. The landlord must invest the deposit at a credit institution at the interest rate customary for savings deposits with three months' notice, separately from their own assets; the returns belong to the tenant.

Rent brake

§ 556d BGB: in areas with a tight housing market, the rent at the start of the tenancy may exceed the local comparative rent by at most 10 percent. The state governments determine the areas by ordinance; the ordinance must expire by the end of 31 December 2029 at the latest. Exceptions (new build, comprehensive modernisation, previous rent) are in §§ 556e and 556f BGB, not covered here.

Termination by the landlord

§ 573 BGB: a legitimate interest is required; as examples the law names a significant breach of duty, own use for oneself, family members or members of the household, and prevention of appropriate economic exploitation. The reasons must be stated in the termination letter. § 577a BGB: if rented housing is converted into condominium ownership and sold, the buyer can rely on a legitimate interest based on own use only after three years; state governments can set up to ten years where housing supply is at risk.

State ordinances (BY / NRW / BE)

In all three states there are ordinances under § 556d Abs. 2 BGB (rent brake) and § 577a Abs. 2 BGB (extended termination block). Areas and terms were not currently checked (Berlin: not checked in full text).

Further topics

See Wegweiser for tenants (rent increases, service charges, defects). Further detail on tax and preservation statutes has not been checked.

Who is responsible
  • Amtsgericht (local court; tenancy matters)
  • Haus & Grund (owners' association)
  • Lawyer for tenancy law
  • Finanzamt (tax)

Quick questions

Worum geht es bei „Letting by owners“?
If you let property, you have duties: deposit, rent brake, grounds for termination. Tenancy law is a topic area of its own.
Which deadlines and figures matter?
  • 3 months' rent: Maximum rent deposit (excluding running costs) (§ 551 Abs. 1 BGB)
  • 10 percent: Upper limit above the local comparative rent in tight housing market areas (§ 556d Abs. 1 BGB)
  • 31 December 2029: Latest end of the rent brake ordinances (§ 556d Abs. 2 BGB)
  • 3 years (state up to 10 years): Block on termination for own use after conversion into a condominium flat and sale (§ 577a BGB)
What should I do first?
  • Draw up the contract properly: Check deposit, rent and running costs.
  • Check the area: Find out whether your area falls under the rent brake (ordinance of your state).
  • Invest the deposit: Invest the deposit separately at a bank.
What do I need to watch out for?
  • Tenancy law is strict in favour of tenants; mistakes make terminations invalid.
  • Whether an area counts as a tight housing market is determined by the state (depends on the state).
  • A termination solely to raise the rent is not permitted (§ 573 BGB).
Evidence
  • BGB § 551, gesetze-im-internet.de, retrieved 20 September 2026
  • BGB § 556d Abs. 1 and 2, gesetze-im-internet.de, retrieved 20 September 2026
  • BGB § 573, gesetze-im-internet.de, retrieved 20 September 2026
  • BGB § 577a, gesetze-im-internet.de, retrieved 20 September 2026
As of

September 2026 · Sources and method

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