Federal Court to clarify rules on subletting in Germany

The German Federal Court (Bundesgerichtshof) has said that it will examine whether tenants can make a profit from subletting their rented flat or room. The court is expected to issue a ruling in January 2026.

BGH to assess rules on subletting in Germany

A case in Berlin has prompted the German Federal Court to examine whether landlords can evict tenants who make a profit from subletting their room or flat. The court will begin assessing the case on September 24 and is expected to issue a ruling on January 28, 2026.

In the Berlin case, a tenant subletted a two-room apartment without permission from their landlord. The tenant was paying 460 euros per month before utility bills, but charging the subletters 962 euros per month. The landlord discovered that the tenant was illegally subletting and cancelled the rental contract.

Alongside making a profit from illegally subletting, the tenant was charging their subletters well over the maximum rent in the local area, which is 748 euros per month. This amount is determined by the rent brake (Mietpreisbremse), which regulates rents in 410 municipalities considered to have a strained housing market.

Initially, the Charlottenburg District Court in Berlin dismissed the landlord’s eviction suit in 2022. After an appeal, the Berlin Regional Court upheld the eviction ruling, arguing the landlord did not have to allow the tenant to profit from subletting, especially if the profits were not shared. The tenant is now appealing this decision.

Berlin rental market is a “wild west”, says Berlin Tenants' Association

The case comes against the backdrop of the worst housing shortage Germany has seen in 20 years. Loopholes in the rent brake mean rents in major German cities have risen by an average of 50 percent in the past 10 years.

In the second quarter of 2025, 93 of the 95 rental contracts assessed by Berlin’s Rent Price Review Office (Mietpreisprüfstelle) were found to be demanding illegally high rent from tenants. The difficulty of finding somewhere to live and the fear of eviction prevent tenants from enforcing their existing rights. 

While the CDU-SPD German government has announced a Bau-Turbo (construction turbo) policy, critics say housing can only be affordable if more is done to restrict exploding rents. Berlin Mayor Kai Wegner (CDU) has previously called on the government to introduce more rent regulations at federal level.

Speaking to public broadcaster rbb about the recent Berlin case in court, the head of Berlin Tenants’ Association (Berliner Mieterverein) Sebastian Bartels said that tenants in the capital find themselves in the “wild west”. 

“There are cases I would never have dreamed of,” explained Bartels. “There are landlords who smash windows just to prevent the apartment from being re-let so that the property can be demolished.” 

“There are networks that rent out commercially furnished apartments under criminal conditions - genuine, punishable rent gouging of over 50 percent. All of this is happening right before our eyes,” Bartels added. “We need to create a more relaxed market in Berlin in which these conditions recede again.”