Sublease

Subletting - Subletting refers to a tenancy arrangement in which a primary tenant sublets all or part of their apartment to a third party. The legal basis for this is Section 540 of the German Civil Code (BGB), which states that a tenant is not permitted to transfer the use of the rented property to a third party without the landlord’s consent.

Legal Basis and Requirements

The primary tenant requires the landlord’s express permission for any form of subletting. This permission may already be included in the lease agreement, but often must be obtained separately. If the landlord grants permission, an independent tenancy agreement is established between the primary tenant and the subtenant. In this scenario, the primary tenant becomes the landlord of the subtenant but remains fully liable to their own landlord.

Under Section 553 of the German Civil Code (BGB), the tenant is entitled to permission to sublet if, after the lease agreement has been concluded, a legitimate interest arises in transferring part of the apartment to a third party. A legitimate interest exists, for example, if the tenant’s personal or financial circumstances have changed significantly, such as due to a separation from a partner, financial difficulties, or the desire to establish a shared living arrangement. The landlord may refuse consent only if there is good cause regarding the subtenant’s person, if the apartment would thereby be excessively occupied, or if the sublease cannot reasonably be expected of the landlord for other reasons.

If the primary tenant sublets without permission, this constitutes a breach of contract. The landlord may issue a warning to the tenant and, if the violation continues, terminate the lease immediately. Unauthorized subletting is one of the most common grounds for termination in tenancy law and is consistently regarded by courts as a serious breach of duty.

Obligations and Liability in a Sublease

In a sublease, the primary tenant bears full responsibility toward the owner-including for damages caused by the subtenant. If the subtenant fails to pay rent, the primary tenant must still fulfill their own lease obligations. This liability structure is a key reason why landlords wish to know and approve the subtenant’s identity and creditworthiness. As for the subtenant themselves: They are entitled to use the sublet apartment in accordance with the contract and may file a complaint regarding defects with the primary tenant-since the latter is their contractual partner. The owner is generally not directly liable to the subtenant.

Special Cases: Short-Term Rentals and Shared Housing

Subletting through platforms such as Airbnb or similar portals is subject to special rules. Commercial short-term rentals generally go beyond the contractually agreed residential purpose and require not only the landlord’s consent but, in many cases, also a permit from the municipality. In many Bavarian cities, there are also statutes against misuse of property that restrict such use or make it subject to a permit.

Establishing a shared apartment is also a form of subletting. If a roommate moves into the main tenant’s apartment, the landlord must consent. The right to permission under Section 553 of the German Civil Code (BGB) generally applies here, provided the apartment is not overoccupied.

Practical Tip for Nuremberg and the Metropolitan Region

Since 2019, Nuremberg has had a bylaw on misuse of property that regulates the short-term rental of living space through platforms such as Airbnb. Anyone wishing to regularly offer their apartment or parts of it as a vacation rental requires a permit from the City of Nuremberg. Violations can be punished with substantial fines.

We recommend that tenants in the metropolitan area always obtain written permission from the landlord for subletting, specifying the subtenant’s name, the part of the apartment involved, and the planned duration. This ensures clarity for both parties and helps avoid future disputes. Landlords who wish to protect their rented apartment from unauthorized subletting should include a clear provision regarding subletting in the lease agreement, conduct regular inspections, and respond promptly in cases of suspicion.

Frequently Asked Questions About Subletting

Can the landlord generally prohibit subletting?

A blanket prohibition on subletting in the lease agreement is invalid if it refers to the partial transfer of the apartment. The tenant has a legal right to obtain permission if they have a legitimate interest under Section 553 of the German Civil Code (BGB). However, this right does not apply to the complete transfer of the apartment to a third party.

Can the landlord charge a subletting surcharge?

Yes, the landlord may make permission to sublet contingent upon the payment of a reasonable surcharge, provided that the subletting would otherwise be unreasonable for the landlord. The amount depends on the circumstances of the individual case. In practice, subletting surcharges often range between 10 and 20 percent of the prorated rent.

What rights does the subtenant have if the main lease is terminated?

If the main lease ends, the sublease also loses its basis. In principle, the subtenant has no independent right vis-à-vis the landlord to continue the tenancy. The subtenant must vacate the apartment when the primary tenant moves out. It is therefore advisable to inform the subtenant of this dependency on the main lease agreement and to include a clear provision in the sublease agreement regarding the termination of the main lease.

Can the main tenant charge a higher rent for the sublease than their own base rent?

This is legally possible, but with restrictions. The subtenant generally pays a pro-rata rent for a portion of the apartment. If the primary tenant demands a disproportionately high share, this may be considered rent gouging (Section 291 of the German Criminal Code) or a violation of the prohibition against usury (Section 138 of the German Civil Code) if the price exceeds the local comparative rent by more than 50%. In practice, a slight surcharge on the pro-rata base rent-for example, for furnished rooms-is common and legally unobjectionable. Anyone charging significantly more than the comparable rent should have this reviewed by a lawyer.

Subleasing and Rent Control

Where rent control applies-in Nuremberg, there is a corresponding ordinance for new leases-the question arises as to whether subleases are also subject to rent control. According to prevailing legal opinion, the rent cap applies only to tenancy agreements between the owner and the tenant, not to the sublease agreement between the main tenant and the subtenant. This means that there is more leeway in pricing in the sublease sector. Nevertheless, the rent should follow market-based principles to avoid accusations of rent gouging. Landlords who acquire or manage apartments with subleases should seek advice from a tenancy law specialist to clarify whether existing subleases have been properly approved and documented.

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