Overview
- German law permits four distinct paths for higher rent—stepped, index-linked, comparison to local market, and modernization—each with strict formal and timing requirements.
- Stepped rents require at least one year between agreed increases, allow no additional hikes beyond the schedule, face no general duration cap for contracts signed since September 2001, and must comply with the rent brake where it applies.
- Index-linked rents track the consumer price index with at most one adjustment per year, landlords must show the calculation, tenants can verify it via the federal statistics tool, any decrease must be requested by the tenant, and the new rate is due from the month after next following notice.
- Rises to the local comparison rent are allowed only after a year without change, must be justified via Mietspiegel, three comparable units or an expert report, and are capped at 20% over three years or 15% in designated tight markets—a stricter limit used in nearly all states except Saarland, Saxony-Anhalt and Schleswig-Holstein—with payment starting in the third month after receipt once consent is given.
- After qualifying upgrades, landlords may add 8% of allocable modernization costs per year with deductions for maintenance and subsidies, subject to caps of up to €3 per square meter over six years or €2 where the prior rent was under €7, with payment from the third month and a six‑month delay if the works were poorly announced; consumer testers report about one in four demands exceed legal limits, so professional review is advised.