Letting a property can be an attractive and stable source of income - provided you work properly from the outset. Mistakes in choosing tenants, in the contract or in the service charge statement, on the other hand, quickly lead to disputes, lost rent and vacancy. This guide summarises the most important rights and obligations for landlords.
Choosing the right tenant
Solvent, reliable tenants are the be-all and end-all of a stress-free letting. The following documents are customary and permissible:
- The applicant's self-disclosure
- Proof of income for the last three months
- Credit report (e.g. SCHUFA)
- Certificate of freedom from rent arrears from the previous landlord
Look for a coherent overall picture - and treat all applicants fairly and free of discrimination, as required by the German General Equal Treatment Act (Allgemeines Gleichbehandlungsgesetz, AGG). Questions about religion, origin, family planning or political party, for example, are not permitted.
The tenancy agreement - what belongs in it
| Point | Important to know |
|---|---|
| Rent level | Observe the local comparative rent |
| Deposit | At most three months' base rent |
| Service charges | Clearly name the apportionable costs |
| Notice periods | Comply with statutory periods |
| Cosmetic repairs | Only valid, flexible clauses |
Outdated clauses - such as rigid deadlines for cosmetic repairs - are often invalid and cause disputes later. A current, clean tenancy agreement is the best precaution.
Handling the deposit correctly
The deposit may amount to no more than three months' net base rent and must be held by the landlord separately from their own assets and safe from insolvency (e.g. in a rental deposit account). The tenant may pay the deposit in three monthly instalments. After the tenant moves out, the landlord has a reasonable period (usually up to six months) to settle the account.
Service charges and the operating cost statement
Apportionable operating costs (under the German Operating Costs Ordinance, e.g. property tax, water, refuse, building cleaning, insurance) may be passed on to the tenant - but only if this is agreed in the contract. The statement must reach the tenant within twelve months of the end of the accounting period, otherwise additional claims may lapse. Administrative and maintenance costs are not apportionable.
Maintenance and your obligations
Responsibility for maintaining the building generally remains with the landlord. Minor incidental repairs can be passed to the tenant within the statutory framework (typical limits: around 100 euros per case, capped per year). The landlord owes a defect-free, usable flat and must respond promptly to legitimate notices of defects - otherwise rent reductions may loom.
Rent increases - what is allowed?
An increase up to the local comparative rent is possible, but subject to the capping limit: generally no more than 20% within three years (15% in tight markets). Modernisations can be partly passed on separately. Deadlines and justification must be correct.
Frequently asked questions
How high may the rental deposit be?
No more than three months' net base rent. The tenant may pay it in three equal monthly instalments, and the landlord must hold it separately from their own assets.
By when must the service charge statement be provided?
Within twelve months of the end of the accounting period. The tenant can generally reject late additional claims.
May I increase the rent at any time?
No. Increases up to the local comparative rent are tied to deadlines and the capping limit (usually 20% over three years) and must be correctly justified.
Who pays for repairs in the flat?
Maintenance is generally borne by the landlord. Only minor incidental repairs can be passed to the tenant by contract and within the statutory framework.
Those who take their obligations seriously usually have satisfied, long-term tenants - and that is economically the most valuable thing of all. We are happy to handle the letting of your property in Homburg and the surrounding area.