What is the BGH subletting ruling?

Germany’s top civil court decided that tenants cannot earn a profit from subletting. If they do, landlords may terminate the lease. The ruling curbs rental arbitrage and supports rent integrity. It also encourages clearer documentation of subrent amounts and costs, making enforcement easier under Germany rental law.

Can landlords terminate if a tenant profits from subletting?

Yes. If a tenant makes a profit from subletting, the landlord may terminate the lease. The ruling strengthens landlord rights Germany by providing a clear response to profit-making sublets. Termination should follow proper notices and documentation to show the profit and the extent of the breach.

How will the 5% furniture surcharge work?

The government plans a uniform 5% furniture surcharge for furnished rentals. For example, on a €1,200 base rent, the surcharge would be €60. A fixed rate reduces disputes over furniture valuation and helps align subrent with actual costs, complementing the subletting profit ban.

What does this mean for investors in German housing?

We see a marginally positive effect. The BGH subletting ruling reduces arbitrage risk, supports stable rents, and clarifies enforcement. Compliance work may rise in the short term, but fewer disputes and cleaner documentation can improve predictability. That is supportive for risk management in listed residential portfolios.

Law and Government

January 30: Germany’s BGH Bans Profit on Subletting, Landlords Gain

ByDanny Kontos January 30, 2026January 30, 2026

The BGH subletting ruling clarifies that tenants in Germany may not earn a profit from subletting and landlords can terminate leases if they do. The government is also preparing a uniform 5% furniture surcharge to standardize furnished rent pricing. For investors, the decision supports rent integrity, reduces arbitrage risk, and modestly strengthens enforcement. We explain what changes now, how costs may shift, and why this matters for Germany rental law and listed housing exposure.