Germany’s Federal Court of Justice (BGH) ruled on January 28, 2026, that landlords are entitled to terminate rental agreements if tenants sublet their apartments for profit. The decision, stemming from a case involving a Berlin resident who sublet his apartment for nearly double the rent he paid, clarifies that subletting is intended to facilitate the availability of housing, not to generate income for the primary tenant.
The case centered on a man living in a two-room apartment in Berlin, paying €460 per month. Planning a long-term trip abroad, he decided to sublet the apartment, charging his subtenant €962 per month. He justified the higher rent by citing the difficulty of finding affordable housing in Berlin and the fact that the apartment was fully furnished. His landlord subsequently initiated eviction proceedings, initially citing his absence from the country, then focusing on the inflated sublet price.
The BGH’s ruling establishes that a tenant does not have a legitimate interest in subletting a property if the primary motivation is financial gain. According to the court, the right to sublet, as outlined in §540 of the German Civil Code, is not intended to be exploited for profit. This principle applies regardless of whether the sublet price violates the Mietpreisbremse, or rent control laws, which cap rental increases in designated areas.
The German Tenants’ Association (Deutscher Mieterbund) welcomed the decision, with President Melanie Weber-Moritz stating, “The Federal Court of Justice has unequivocally clarified: Subletting serves to maintain housing availability and not to generate profit.” Weber-Moritz emphasized that many individuals rely on subletting due to the scarcity of available housing and that this vulnerability should not be exploited by either landlords or primary tenants.
The court’s decision likewise addresses the issue of furnished apartments. The BGH explicitly stated that furnishing an apartment does not justify arbitrary rent increases for subletting purposes. Even as there are currently no legal regulations governing furniture surcharges or their limits, the ruling indicates that such surcharges cannot be used to circumvent the prohibition against profiting from subletting.
Legal experts note that tenants do not have a legal claim to a landlord’s permission to sublet, particularly if the intention is to generate a profit. The BGH’s ruling reinforces the landlord’s right to refuse subletting requests based on this criterion. The court’s judgment was not influenced by the sequence of reasons presented by the landlord for initiating the eviction proceedings, focusing solely on the financial benefit derived from the subletting arrangement.
The Sparkasse financial institution highlighted the ruling as a significant clarification of the legal boundaries surrounding subletting, emphasizing the limitations placed on potential profits. The BGH’s decision, delivered on January 28, 2026, is expected to have a broad impact on subletting practices across Germany.
