German Federal Court of Justice Prohibits Subletting for Financial Gain - German Court Limits Tenants' Ability to Profit From Subletting Apartments
A recent ruling by Germany's Federal Court of Justice (BGH) has clarified the limits of subletting rental apartments. The case involved a Berlin tenant who charged nearly double their own rent when subletting the property. The court's decision sets clear boundaries on when landlords must approve such arrangements.
The dispute began when a tenant in Berlin, paying under €500 in rent, sublet their apartment for almost twice that amount. The landlord challenged the arrangement, leading to a legal battle that reached the BGH (Case No. VIII ZR 228/23).
Under German law, tenants can sublet their homes but must first obtain the landlord's permission. The court confirmed this rule but added an important exception: landlords must grant approval if the sublet helps the tenant keep their living space during major life changes. However, the BGH made it clear that making a profit from subletting does not qualify as a valid reason.
The ruling explicitly states that financial gain alone cannot justify a sublease. Tenants may only charge enough to cover their own rent and related costs. The decision reinforces that subletting must serve a legitimate need—not just a way to earn extra income.
The BGH's ruling provides clearer guidance for both tenants and landlords on subletting rules. Landlords must now assess requests based on whether the sublet is necessary for the tenant's housing stability. Meanwhile, tenants cannot use subletting as a way to turn a profit beyond their actual expenses.
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