If you are the owner of a rented apartment, you can increase the rent to compensate for inflation, for example. However, you have to keep a few points in mind when doing so. First things first: You always need your tenant's consent before a rent increase becomes valid. However, the tenant is usually obliged to give this consent if you adhere to the formal and legal requirements. For example, the rent increase must be in writing and must be justified. According to the German Civil Code (BGB), rent increases are possible up to the local comparative rent (§ 558), due to modernisation measures (§ 559) and if a graduated or index-linked rent has been agreed in the lease (§ 557).

Rent increase up to the local comparative rent

You may increase the rent up to the local comparative rent if the rent has been unchanged for at least 15 months at the time of your planned increase. In addition, your request for a rent increase must be received by the tenant no earlier than one year after the previous rent increase. Furthermore, you may increase the rent by a maximum of 20 percent within three years in accordance with the so-called capping limit. Since May 2013, this limit can also be reduced by the federal states to just 15 percent in three years in communities with a tight housing market. When justifying the rent increase, you must refer to one of the following sources to prove the local comparative rent: three comparative apartments, an expert's report, information from a rent database or a rent index.

Rent increase due to modernisation

You can increase the rent due to modernisation if you or the owners' association have carried out structural measures that increase the utility value of the apartment, improve the living conditions in the long term or sustainably save energy or water. This includes, for example, the addition of a balcony, the replacement of single-glazed windows with multiple-glazed ones, or the installation of an intercom system. They can increase the annual rent by up to eleven percent of the costs spent on the apartment.

Graduated and index-linked rents

If a graduated rent is stipulated in the lease agreement in accordance with Section 557a of the German Civil Code (BGB), the rent is increased by a likewise stipulated amount on the stipulated dates. There must be at least one year between two increases and no additional rent increases are possible as long as the graduated rent is in effect.

If an index-linked rent has been agreed in accordance with Section 557b of the German Civil Code (BGB), the rent increases in line with the price index for the standard of living of all private households in Germany as determined by the Federal Statistical Office. Even with index rent, an increase is only possible once a year and additional rent increases are excluded. Only in the case of modernization for which you as the landlord are not responsible and which has been decided by the owners' association may you increase the rent unscheduled.