Renting in Germany: Landlords Forced to Refund Tenants

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Breaking rental rules in Germany can lead to substantial financial losses for landlords. The law allows tenants to challenge excessive rents and recover overpayments from previous years. In Berlin, a property owner refunded a woman around €10,000, Berliner Morgenpost reports.

€10,000 Rent Refund in Berlin

In December 2023, Stefanie Wollenhaupt rented a 70 sq. m apartment in Berlin’s Niederschönhausen district for herself and her nine-year-old son. The monthly rent was €1,090. She thought the price was too high, but there were few suitable alternatives.

In early 2024, Wollenhaupt contacted Conny, a service that helps tenants challenge excessive rents. After she filed a complaint, the landlord, according to Wollenhaupt, threatened to terminate the lease, saying he intended to move into the apartment himself. The owner’s lawyer also sent letters demanding that she vacate the property. The parties only agreed on a rent reduction in August 2025, IamExpat reports.

Her monthly payment fell to €650. The landlord also returned €8,300 in overpaid rent and part of the security deposit. The total refund came to about €10,000.

Subletting: Court Rules in Landlord’s Favor

On January 28, 2026, Germany’s Federal Court of Justice considered a dispute over subletting an apartment in Berlin. A man rented the property for €460 a month, excluding utilities, and sublet it to others for €962. The subtenants paid additional charges separately.

Permission to sublet had been granted for a limited period. After it expired, the man continued collecting payments from the occupants without authorization. The owner terminated the main lease and demanded that he vacate the apartment.

The court upheld the termination. German law allows tenants to seek permission to sublet when they have a legitimate interest, such as reducing their own housing costs. But profiting from the difference between the two rents was not accepted as such a justification. The ruling was issued in case VIII ZR 228/23.

Discrimination in Housing Rentals

In November 2022, a real estate agency repeatedly refused to arrange an apartment viewing for a woman. Her applications used a first and last name of Pakistani origin. She then submitted new requests under German names, keeping her employment, income and household details unchanged. The agency responded with invitations. Friends and relatives who took part in the test received similar results.

The court of first instance dismissed the claim. An appeals court found that the refusals amounted to ethnic discrimination, and on January 29, 2026, Germany’s Federal Court of Justice upheld that ruling. The real estate agent was ordered to pay €3,000 in compensation and cover legal fees.

The Federal Court of Justice clarified that the ban on discrimination in housing rentals also applies to intermediaries. Under the General Equal Treatment Act (AGG), an agency responsible for arranging viewings and selecting applicants may be held liable even when the apartment belongs to someone else.

Rent Controls in Germany

New Lease Agreements

In Germany, the Mietpreisbremse (rent brake) limits rents in areas with tight housing markets. Under a new lease, the rent generally cannot exceed the local reference level by more than 10%. In June 2025, the legal basis for this system was extended through the end of 2029. Germany’s federal states decide which areas are covered.

The Mietspiegel, a rent index for comparable apartments, is used to calculate the reference amount. In Berlin’s 2026 Mietspiegel, the median figure was €7.71 per sq. m, up from €7.21 in the previous edition. This is not a citywide cap: the applicable amount depends on location, floor area, construction year and fittings.

Exemptions

Exemptions apply to rental units in new buildings. The Mietpreisbremse does not cover properties first occupied and rented out after October 1, 2014, or the first lease following comprehensive modernization. In certain circumstances, the landlord may retain the previous tenant’s rent even if it exceeds the general limit. The basis for an exemption must be disclosed before the agreement is signed.

Limits on Rent Increases

Rent increases under existing leases are regulated separately. In Berlin, the standard limit is 15% over three years; in some other regions it is 20%. The new amount must also stay within the local reference rent. Separate rules govern index-linked increases and modernization. The 10% cap applied to new leases does not directly apply in these cases.

Excessive Rents and Inspections in Berlin

Lease Reviews

The Berlin Tenants’ Association examined 330 apartment rental agreements. In 95% of the cases reviewed, rents exceeded the local reference level by more than 10%. The average gap relative to the presumed legal limit was 76%. However, it was not possible to establish whether statutory exemptions applied to every property.

From January 2025 through March 2026, the association handled around 6,000 inquiries about potentially excessive rents. Its specialists also reviewed 267 notices of increases under existing leases and found errors in roughly three out of four. In some cases, landlords attempted to exceed the local reference rent while formally observing the three-year percentage cap.

Monitoring Rental Listings

The authorities introduced automated monitoring of rental housing listings in Berlin. In June 2026, the system collected 7,757 listings; 4,539 remained after screening. Of these, 2,102 — or 46% of the analyzed sample — showed signs of potentially breaching rent limits, the Berlin Senate reported. Landlords responsible for those listings were asked to review their asking rents.

Officials also examine flagged listings to determine whether a statutory exemption applies. Where grounds exist, municipal authorities may open proceedings over excessive rent. Since July 2026, Berlin residents have been able to file complaints about excessive rents through an online service; district offices review the submissions.

How to Recover Overpaid Rent

Checking rents in Berlin starts with comparing lease terms against figures in the Mietspiegel. Tenants can also contact the municipal Mietpreisprüfstelle, where staff can assess the permitted rent based on the apartment’s characteristics and any applicable exemptions.

If the rent exceeds the legal limit, the tenant sends the landlord a request to reduce it and refund the excess. A notice in text form is sufficient: it should identify the lease and explain the grounds for recalculation. The Berlin Tenants’ Association provides a sample notice to a landlord. Keep a copy of the request and evidence of payments.

The date of the complaint determines how far back a refund can reach. Under Section 556g of the German Civil Code, tenants may recover overpaid rent from the start of the tenancy if they raise the violation within the first 30 months while the lease is still in effect. Otherwise, reimbursement is generally limited to amounts that became due after the complaint.

If the landlord refuses to revise the terms, tenants can seek advice from a tenants’ association or lawyer and then bring a claim in court. Legal services often charge a fee linked to the amount saved. According to IamExpat, Conny normally charges the equivalent of six months’ rent savings; Wollenhaupt was not charged.

Rental Market Outlook for Investors

International Investment analysts note that Berlin’s shortage of affordable housing exists alongside a surplus of listings in the premium segment. For investors, this means more resilient demand in the mass-market sector and a greater risk of vacancies at the top end of the market.

Tighter enforcement of rental laws is changing the conditions landlords face. Inspections and court rulings increase the financial risks of charging excessive rents. Opportunities to boost profits through violations are narrowing, making legally secure income increasingly important.

High construction and modernization costs are restricting the expansion of housing supply, but they do not allow landlords to pass those expenses on to tenants without limits. In the coming years, this may widen the gap between a property’s market appeal and its investment yield. Properties capable of generating stable income without continual rent increases are likely to have an advantage.

Frequently Asked Questions (FAQ)

What is the Mietpreisbremse?

It is a cap on rent when entering into a new lease. In areas where the rule applies, the price generally cannot exceed the local reference rent by more than 10%. Statutory exemptions apply.

How can I check whether the rent in Berlin is too high?

Compare the terms of the lease with Berlin’s Mietspiegel, taking into account the location, floor area and characteristics of the property. The municipal Mietpreisprüfstelle also provides advice.

Can tenants claim back rent overpaid in previous years?

Yes. If a complaint is submitted within the first 30 months of the tenancy and before the lease ends, the refund may cover an earlier period. If the tenant complains later, only sums that became due after the notice are generally recoverable.

How do I request a rent adjustment from the landlord?

Send a notice in text form identifying the lease and explaining why the rent should be reduced. Keep a copy and proof of payments. If the dispute cannot be resolved, tenants may seek legal assistance and go to court.

When does the Mietpreisbremse not apply?

The rent brake does not apply to the first letting of a property first occupied and rented out after October 1, 2014, or to the first lease after comprehensive modernization. Other exemptions may apply to the rent paid by the previous tenant.

How much can rent increase under an existing lease?

In Berlin, standard increases toward the local reference level are capped at 15% over three years. Special rules apply to index-linked leases and modernization.

Can a tenant sublet an apartment for profit?

Subletting requires the landlord’s consent. Germany’s Federal Court of Justice ruled that the desire to profit from the difference between two rents does not, by itself, entitle a tenant to demand permission.

Who is liable for discrimination in housing searches?

Liability may extend beyond the owner to a real estate agency that refuses apartment viewings on grounds prohibited by law. In the case discussed in the article, compensation was €3,000.

Where can residents report excessive rents in Berlin?

They can use the city’s online complaint service. District authorities examine submissions, while the Mietpreisprüfstelle can help assess the permissible rent.