Rent Increase Procedure

The rent increase procedure refers to the legally regulated process by which a landlord can increase the rent for a residential property under an existing lease in a legally compliant manner. It includes selecting a valid reason for the increase (comparable rent, modernization), providing formal written notice, the waiting period for the tenant, and, if necessary, the court approval process. Anyone who does not follow the procedure correctly risks the rent increase request being invalid and the increased rent not being enforceable.

Step-by-Step: Increase to Comparative Rent

The most common rent increase procedure follows § 558 et seq. of the German Civil Code (BGB). Step 1: Check the waiting period - the rent must have remained unchanged for at least 15 months. Step 2: Determine the comparable rent - based on a qualified rent index, three comparable apartments, or an expert opinion. Step 3: Formulate the request for an increase in writing, including justification and reference to the basis for comparison. Step 4: Consideration period - the tenant has two full calendar months after receiving the letter to respond. Step 5: Obtain consent; if the tenant refuses, the landlord may file a lawsuit to compel consent within three months.

Important: The two-month period begins only upon the tenant’s receipt of the letter. If the request for an increase was received on March 15, the consideration period runs until May 31. The increased rent then becomes due only as of June 1. These deadlines are mandatory; an earlier due date cannot be agreed upon.

Rent Increase for Modernization under Section 559 of the German Civil Code (BGB)

Anyone who modernizes their property (energy efficiency improvements, accessibility, new plumbing) may pass on 8% of the costs incurred annually to the rent. Requirements: Notice of modernization must be given at least three months before work begins (Section 555c of the German Civil Code), and the impact on rent and operating costs must be outlined. The tenant may raise a hardship objection. The cap is 3 euros per square meter over a six-year period (2 euros per square meter for low base rents).

Not all construction measures justify a modernization rent increase. Maintenance measures-i.e., repair or restoration of existing fixtures-do not constitute modernization. If a defective heating system is replaced with a new one of the same type, this is maintenance, not modernization. If an oil-fired heating system is replaced with a heat pump, this constitutes an energy-efficiency modernization that is apportionable. Distinguishing between the two is sometimes difficult on a case-by-case basis and has been the subject of numerous court rulings.

Common Mistakes and Their Consequences

Errors in the rent increase process are often of a formal nature: missing or incorrectly calculated justifications (e.g., incorrect price per square meter in the rent index), failure to use the written form, incorrect calculation of the deadline, or exceeding the cap limit. A formally flawed request for a rent increase is invalid-the landlord must submit it again, this time correctly, and loses the time that has already elapsed.

Particularly common errors include: referencing an outdated rent index instead of the current one, listing comparable apartments that are not truly comparable (different year of construction, different location, different amenities), and missing the date or the landlord’s signature. Tenants can reject formally flawed rent increase requests without reviewing the content-this costs the landlord time and causes resentment. Following the correct procedure from the start saves a considerable amount of effort.

Practical Tip for Property Owners in Nuremberg and Franconia

Nuremberg has a qualified rent index that is updated every two years. For rent increases in the city of Nuremberg, the current rent index should be used as the basis for justification, as it is recognized by courts as a reliable foundation. In surrounding municipalities without a qualified rent index (e.g., smaller rural municipalities in the Nürnberger Land or Ansbach districts), comparable apartments or an expert appraisal must be used-which is more time-consuming but certainly feasible.

For landlords in the region, we recommend not announcing the rent increase shortly before a planned new lease, but rather in a timely manner-that is, if possible, one year before the expiration of an existing lease. This allows for the consent process and, if necessary, legal proceedings. We assist our landlord clients in drafting legally sound increase notices and calculating the permissible increase amounts.

Frequently Asked Questions

What happens if the tenant neither agrees nor refuses?

Silence is considered a refusal. The landlord must then file a lawsuit for consent with the local court within three months after the end of the consideration period. If the landlord misses this deadline, the right to enforce the increase for that period expires.

Can I issue a rent increase and a modernization notice at the same time?

No, these are two separate procedures with different deadlines and requirements for justification. A modernization notice is not a request for a rent increase. The rent increase following modernization can only be declared effective after the work has been completed.

Does the rent increase procedure also apply to commercial space?

No. For commercial space, Sections 535 et seq. of the German Civil Code (BGB) apply without the protective provisions of residential tenancy law. Rent increases are only possible there if the contract or law provides for corresponding clauses (e.g., index-linked rent or a contractually agreed schedule).

What is the maximum allowable rent increase?

The rent may not exceed the local comparative rent and may not increase by more than 15 percent (in tight markets such as Nuremberg) or 20 percent (in other markets) within three years-this is the cap limit. Both limits-comparative rent and cap limit-apply cumulatively: the lower of the two limits is decisive.

Checklist: Formulating a rent increase request in a legally compliant manner

For landlords in Nuremberg and the metropolitan region, we have summarized the most important points that a legally compliant rent increase request must contain:

• Written form: The request must be in writing and signed by the landlord or their authorized representative.
• Correct line in the rent index: Specification of the rent index number, year of construction, living area, and amenities; the rent increase request must clearly reference the correct line.
• Waiting period documented: Proof that the last rent increase to take effect occurred at least 15 months ago.
• Cap limit observed: Calculation showing that the new rent does not exceed the old rent by more than 15 percent within the last three years.
• Comparable rent not exceeded: The new rent may not exceed the local comparable rent listed in the rent index.
• Reflection period correctly specified: Notice to the tenant that the consent period expires at the end of the month following the month after the letter is received.

If even one of these points is missing, the rent increase request may be invalid in terms of form or content. We recommend that landlords in Nuremberg check the letter for completeness before sending it-a correctly drafted request saves time, stress, and legal costs.

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