REALWorld Law

Are there any limits on the landlord’s right to request reimbursement of expenses (such as property taxes, insurance costs, etc.) from the tenant? Can the concept of “triple net rent” be achieved?

Ordinary termination of the residential lease by the landlord requires legitimate cause according to the German Civil Code. Termination for the purpose of rent increase is prohibited. The ordinary termination right of the landlord can only be exercised if the landlord can prove its legitimate cause. This is in particular the case if

• the tenant has culpably and significantly breached its contractual obligations;
• the landlord requires the lease object for personal use, that is to say for itself, its family members or members of its household; or
• if the landlord is prevented from appropriately commercially utilising the lease object by continuation of the lease and it suffers significant disadvantages as a result.

The legitimate interest can also be demonstrated in other cases, provided that the interest can be given the same weight and be considered equally important as the interests listed.

For an ordinary termination, the notice period for the landlord is three months, six months for tenancies that have existed for at least five years and nine months for tenancies that have existed for at least eight years.

The tenant can contradict a notice of termination of the landlord and require the continuation of the tenancy, if the termination of the tenancy for him or his family would mean a hardship, which cannot be justified even under appreciation of the legitimate interests of the landlord.

The landlord's right for extraordinary termination without notice is also governed by the German Civil Code. The landlord requires a good cause for an extraordinary termination. The German Civil Code provides examples in which cases such a good cause is given, eg if the tenant has not paid the rent for two consecutive months.

Contractual agreements between the landlord and the tenant to deviate from the aforementioned provisions in the German Civil Code, especially to the disadvantage of the tenant, are generally void. However, it is possible to contractually agree on a minimum duration for the lease, meaning that neither landlord nor tenant can terminate the lease agreement for a defined time period. The exclusion of the termination right only affects the ordinary termination right.

Last modified 13 Mar 2025

Are there any limits on the landlord’s right to request reimbursement of expenses (such as property taxes, insurance costs, etc.) from the tenant? Can the concept of “triple net rent” be achieved?

Generally, the tenant may ordinarily terminate the residential lease with three months' notice. The notice of termination must have been received by the landlord by the third working day of the month in order for it to be valid for the month in question. A shorter notice period may be agreed in the case of housing rented for temporary use only. The contractual agreement of a shorter notice period for the tenant is possible, provided that it does not disadvantage the tenant. An ordinary termination does not require good cause or a specific reason.

In the case of housing rented by a legal person under public law or a recognized private welfare organization for the purpose of providing it to persons in urgent need of housing if, at the time of conclusion of the contract, it drew the tenant's attention to the purpose of the housing and the exception to the above provisions, notice of termination is admissible at the latest on the 15th of a month to the end of this month.

Landlord and tenant may agree on a reciprocal waiver of the ordinary termination right, up to a period of four years. However, the exact thresholds for the validity of such a waiver are subject to jurisprudence, eg such a waiver may not be agreed with a student as a tenant.

The extraordinary termination right without notice by the Tenant corresponds with the extraordinary termination right without notice by the landlord. An extraordinary termination is possible for good cause which  is eg given if the landlord does not provide the contractually agreed state of the premises to the tenant.

Contractual agreements to the disadvantage of the tenant between the landlord and the tenant to deviate from the aforementioned provisions in the German Civil Code are generally void.

Last modified 13 Mar 2025

Are there any limits on the landlord’s right to request reimbursement of expenses (such as property taxes, insurance costs, etc.) from the tenant? Can the concept of “triple net rent” be achieved?

In this case, the landlord is entitled to an extraordinary termination right without notice . The termination notice must be delivered in writing and must state the reasons for termination, specifying exactly for which months the rent has not been paid. The termination notice must also be signed by the landlord itself, or if a third person is acting with power of attorney, the original power of attorney must be attached to the notice. Otherwise the tenant may object to the termination notice.

If the tenant does not move out voluntarily, the landlord must file an action for eviction in order to regain possession of the leased premises. It can take up to one year for the landlord to regain possession of the premises through an eviction procedure.

Once an eviction proceeding is filed in before a court, the tenant is entitled to remedy the grounds for termination for a time period of two months as of delivery of the eviction notice to the tenant. If the tenant remedies all outstanding amounts within the aforementioned timeline, the termination of the landlord is invalid and the tenant may remain in the leased premises. The aforementioned right of the tenant to remedy a termination by the landlord due to default payment of the rent does not apply if the tenant is in default of payment of the rent for the second time within two years and the tenant has in the first instance already made use of its remediation right. Moreover, the right of the tenant to remedy a termination by the landlord relates only to the rescission of the extraordinary termination. Provided that an ordinary termination was also based on this reason and fault on the part of the tenant can be proven, the ordinary termination shall remain in effect even if the outstanding rent is paid subsequently.

Last modified 13 Mar 2025

Are there any limits on the landlord’s right to request reimbursement of expenses (such as property taxes, insurance costs, etc.) from the tenant? Can the concept of “triple net rent” be achieved?

The operating cost regulation (Betriebskostenverordnung) regulates which expenses can be triggered to be paid by the tenant.

This includes:

• property tax;
• water supply costs;
• drainage costs;
• heating costs;
• hot water costs;
• costs of associated heating and hot water supply systems;
• costs of operating the passenger or goods lift;
• costs of street cleaning and garbage disposal;
• cost of cleaning and pest control;
• costs of garden maintenance;
• costs of lightning;
• costs of chimney cleaning;
• costs of property and liability insurance;
• costs for the caretaker;
• costs of operating laundry care facilities; and
• other operating costs (eg such as maintenance costs for smoke detectors or drinking water analysis).

What kind of other operating costs can be triggered to the tenant is subject to jurisprudence. It has been found that general maintenance and repair costs of the leased residential premises cannot be requested to be paid by the tenant. Therefore, the concept of ‘triple net rent’ cannot be achieved in residential leases. The tenant may only be obliged to carry out cosmetic repairs (Schönheitsreparaturen) and the repair of minor defects (Kleinreparaturen) that occur in the leased premises (up to an amount of EUR 100 per defect and a maximum amount of 6-8% of the annual net rent).

Since 2021, an additional CO₂ levy has been charged for heating with oil or natural gas. Since January 2023, the CO₂ costs in the lease are split between landlord and tenant, with the percentage of the tenant’s participation depending on the energy efficiency of the building: The worse the energy condition of a building, the higher the share of costs for landlords. The new regulation emphasizes the task of landlords to equip apartment buildings with climate-friendly heating systems and to ensure good insulation. At the same time, tenants retain their own responsibility to heat as economically and efficiently as possible, as part of the CO₂ costs will continue to be passed on to them.

Since July 2024, with the amendment to the Telecommunications Act [Telekommunikationsgesetz], landlords are prohibited from automatically passing on TV cable fees to tenants with the ancillary costs.

Last modified 13 Mar 2025