Option to increase rent

The option to increase rent refers to the landlord’s contractual or statutory right to raise the net base rent under certain conditions. Under German tenancy law, ordinary rent increases are strictly regulated: they are only permitted up to the local comparative rent and subject to the cap limit. However, landlords can agree to an automatic rent adjustment through contractual provisions (graded rent or index-linked rent), which replaces the statutory rent increase procedure.

Statutory Rent Increase Up to the Local Comparative Rent

The classic rent increase under Section 558 of the German Civil Code (BGB) allows the landlord to raise the rent up to the local comparative rent-subject to the cap. In Nuremberg, this is 20% over a three-year period; in housing markets classified as tight, the limit may be lowered to 15%. The increase must be justified in writing-by reference to the rent index, an expert opinion, or three comparable apartments. The tenant has a two-month period to consent; if they refuse, the landlord may file a lawsuit.

Important to know: A rent increase under Section 558 of the German Civil Code (BGB) can only be enforced if the last rent increase that took effect occurred at least 15 months ago and at least one year has passed since the start of the tenancy or the last rent increase. Many landlords underestimate these waiting periods and thus lose potential for increases that they cannot retroactively make up for.

Graduated Rent: Predictable Rent Increases via Contract

With graduated rent (Section 557a of the German Civil Code), future rent amounts and the dates of increases are already specified in the lease agreement. The increments must be expressed in euro amounts (not percentages); there must be at least one year between two increments. Graduated rent agreements offer landlords planning security and spare them the time-consuming rent increase process. For tenants, they mean transparency, but also a commitment to previously agreed-upon increases, even if market rents stagnate.

The graduated rent is particularly suitable for new leases in a market with rising demand-such as in Nuremberg. Anyone who rents out an apartment today at 12 euros/m² and agrees to annual increments of 50 cents/m² in subsequent years will reach 14.50 euros/m² after five years-without additional administrative effort and without requiring the tenant’s consent.

Index-linked rent: Rent increases tied to the consumer price index

Index-linked rent (§ 557b BGB) ties rent adjustments to the consumer price index (CPI) published by the Federal Statistical Office. If inflation rises, the rent can be increased accordingly-without further justification or reference to the rent index. Index-linked lease agreements are particularly attractive to landlords during periods of high inflation; during periods of low inflation, they may lag behind the rental market trend. A standard comparative rent increase in addition to the index-linked lease agreement is not permitted.

In practice, index-linked rent has led to significant rent increases for many landlords in the years 2021-2023-the inflation rate was at times over 8%, which automatically allowed for corresponding rent increases. At the same time, this has sparked political discussions about capping index-linked rent adjustments; property owners should keep an eye on this legal development.

Practical Tip for Landlords in Nuremberg and Franconia

Landlords in Nuremberg should regularly compare their current lease agreements with the Nuremberg rent index. If the current rent is significantly below the comparative rent, there is an option to increase the rent-which should be strategically well-timed and implemented in a legally sound manner. For new leases, we recommend carefully weighing the choice between graduated rent and index-linked rent, taking into account current inflation trends and long-term market developments in the respective location.

We assist landlords in formally drafting rent increase requests, correctly classifying them within the Nuremberg rent index, and handling tenant responses in a legally sound manner. A poorly worded or incorrectly justified rent increase notice is invalid-and must be redone from scratch.

Frequently Asked Questions

As a landlord, can I increase the rent even though I have a graduated rent agreement?

No. With a valid graduated rent agreement, an additional rent increase under Section 558 of the German Civil Code (BGB) (based on comparative rent) is excluded. You are bound by the agreed-upon rent escalation tiers.

As a landlord, how long must I wait between two rent increases?

For a standard rent increase based on comparable rents, the most recent increase that took effect must have occurred at least 15 months prior before a new increase may be announced (Section 558(1) of the German Civil Code). The rent increase notice itself may be sent earlier.

Does the cap also apply to new leases?

No. The cap applies only to existing tenancies. For new leases, the rent control regulations apply (applicable in some cities in Bavaria)-these limit the initial rent to a maximum of 10% above the local comparable rent.

Does the tenant have to agree to the rent increase?

In the case of a standard rent increase under Section 558 of the German Civil Code (BGB), the tenant has two months to agree. If the tenant does not agree, the landlord may file a lawsuit to obtain consent within a further three months. For graduated and index-linked rents, no separate consent is required-the increase takes effect automatically.

Realistically Assessing Rent Increase Potential

A common mistake among landlords is equating the theoretical rent increase potential with the actual achievable potential. The Nuremberg rent index lists ranges for each residential area, year of construction, and apartment size-not just a single value. Classifying the property into the correct row and column of the rent index, taking into account features (balcony, built-in kitchen, modern bathroom), and correctly determining the living area in accordance with the Living Area Ordinance are crucial. Anyone who classifies their apartment into a rent index column that is too high risks having their request for an increase deemed invalid.

In the Nuremberg metropolitan region, the local comparative rents for existing apartments range between approximately 8.50 and 16.00 euros per square meter of net rent (as of 2025), depending on location, year of construction, and amenities. For landlords with existing tenants who have been paying below market rent for years, the my-home.de editorial team recommends a structured analysis: What is the current actual rent? What comparative rent does the rent index show? How much leeway does the cap limit allow (15% over three years in Nuremberg)? Only based on these three factors can the realistic potential for an increase be quantified.

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