BGH ruling on subletting: profit from a sublet can be unlawful – what does it mean for tenants?
The Federal Court of Justice (BGH, VIII ZR 228/23) is clear: you are entitled to permission to sublet under § 553 BGB (German Civil Code) only if you have a legitimate interest – not in order to make a profit from the sublet.
Check your rent for freeWhat does this mean for you?
As a tenant, § 553 (1) BGB gives you a right to permission to sublet if you have a legitimate interest – for financial or personal reasons, say. After BGH ruling VIII ZR 228/23, that interest must be genuine and plausible. If your only aim is to make a profit from the sublet, the landlord may refuse permission. Subletting remains allowed if you want to cover your housing costs or have a good reason to hand over part of the flat.
The key points in brief.
Subletting is a practical tool for many tenants – during a longer stay abroad, say, or because a room has become free. The BGH has now drawn the line more sharply: the statutory right protects your interest in living in the flat, not your interest in a profit.
The case number
The legal basis
The core
The consequence
What was the Berlin case about?
The case arose from a tenant's wish to sublet part of his flat, or the whole flat, to a third party for a time. The dispute was whether the tenant could demand the landlord's permission – and whether his interest counted as legitimate under the law.
The heart of the dispute: can a tenant enforce a right to permission to sublet when his main aim is to make a financial surplus from the sublet? The court had to decide where the line runs between an interest in housing and costs that deserves protection and a pure intention to profit.
The specific details – the size of the flat, the sublet rent demanded and the exact contractual set-up – matter less for the core message than the legal standard the BGH set.
The starting point
A tenant wanted to sublet all or part of his flat and relied on his interest under § 553 BGB.
The point in dispute
Was there a genuine legitimate interest – or was it essentially about making a profit from the sublet?
The turning point
The BGH used the case to sharpen the standard for a “legitimate interest” – with effect well beyond this one case.
What the BGH decided: § 553 BGB and the “legitimate interest”.
The court's reasoning can be followed in a few steps – from the wording of the law to the practical limit for tenants.
The statutory right
§ 553 (1) BGB entitles the tenant to the landlord's permission to sublet part of the flat – provided a legitimate interest arises after the tenancy agreement was signed.
What a “legitimate interest” is
The term is broad and covers personal as well as financial reasons – lowering your own housing costs, a temporary stay abroad or a room that has become free. What counts is a genuine, plausible reason.
Where the line is
According to the BGH, there is no legitimate interest if the tenant's essential aim is simply to make a profit from the sublet. § 553 BGB protects housing, not profit-making.
What this means in practice
If the sublet clearly serves only to make a profit, the landlord may refuse permission. Anyone who sublets without permission is in breach of contract.
Could you be paying too much rent yourself?
When subletting is still allowed.
The ruling does not call subletting into question as such. For the vast majority of tenants little changes: if you have a genuine interest in housing or costs, you keep your right to permission. The following situations are typical examples.
Part of the flat
Letting a room to a flatmate while you stay in the flat yourself is the core case of § 553 BGB.
- Flatmate moves out
Lowering your own housing costs
If you want to cushion the running costs of the flat with a sublet, you are pursuing a recognised financial interest.
- Relief from rising costs
- Covering costs, not profit
Temporary absence
For a fixed-term stay abroad or a change of job, your interest in subletting may be legitimate in order to keep the flat.
- Semester abroad, secondment
- Clear intention to return
What “cost-covering” means – and where the profit margin begins.
The key distinction is simple: does the sublet cover your share of the costs – or do you take in noticeably more than the space you hand over costs you? The following purely illustrative examples show the difference.
Careful: as a subtenant you must not be overcharged either.
If you live as a subtenant in a shared flat or a single room, your rent may also be subject to legal limits. In areas with rent control there are caps on rent – check for free whether you are paying too much.
Risk of termination and eviction
Anyone who sublets without the required permission or with a profit motive is on thin ice. Tenants should know this – whether they are main tenants or subtenants.
What subtenants and main tenants should do now.
A few clear steps keep you on the safe side – whether you sublet or live as a subtenant yourself.
Get permission in writing
Ask the landlord for permission before you sublet and name your legitimate interest specifically – easing your costs, say, or a temporary absence.
Set the sublet rent sensibly
Base it on the share of costs for the space you hand over. A visible profit mark-up can put your right to permission at risk.
As a subtenant, check your rent
If you live as a subtenant, your rent may be too high in areas with rent control. Have it checked for free.
Do not ignore a written warning
If the landlord sends a written warning, act promptly – obtain permission after the fact or adjust the sublet rent, for example – to head off a termination.
Are you paying too much as a tenant or subtenant?
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Frequently asked questions about BGH ruling VIII ZR 228/23
Is subletting now banned after the BGH ruling?
No. Subletting remains possible in principle. The BGH only clarified that the statutory right to permission to sublet under § 553 BGB requires a legitimate interest. That interest is missing if the tenant's essential aim is simply to make a profit from the sublet. If you have a genuine interest in housing or costs, you keep your right.
What is a “legitimate interest” under § 553 BGB?
The term is broad and covers personal as well as financial reasons that arose only after the tenancy agreement was signed. Typical examples are lowering your own housing costs, a room that has become free, a flatmate moving out or a temporary absence for work. What counts is a genuine, plausible reason – not the mere intention to generate income.
Am I not allowed to make any surplus at all from the sublet?
Under the ruling, the legitimate interest can fall away if the sublet clearly serves only to make a profit. A small mark-up is not automatically unlawful – it depends on the overall picture and your actual interest. If in doubt, base the sublet rent on the share of costs and get legal advice for larger amounts.
What happens if I sublet without permission?
Subletting without the required permission is normally a breach of contract. The landlord can issue a written warning and, if the tenant does not respond, terminate the tenancy in the worst case. If the main tenancy agreement is terminated, the subtenant also loses the basis for living there. So always obtain permission first.
Can I be given notice because my sublet rent is too high?
Termination for unauthorised or profit-driven subletting normally requires a prior written warning. If you respond to the warning – by obtaining permission after the fact or adjusting the sublet rent, say – escalation can often be avoided. Seek individual advice if in doubt. You can read more about the requirements for a landlord's notice on our page on termination by the landlord.
I live as a subtenant in a shared flat – does this affect me?
The ruling mainly concerns the relationship between main tenant and landlord. As a subtenant, though, you should know that your rent may also be capped in areas with rent control. Check for free whether you are paying too much – more on our page on lowering the rent in a shared flat.
Does the ruling also apply if I want to sublet the whole flat?
By its wording, § 553 BGB covers letting part of the flat. Stricter standards sometimes apply to subletting the entire flat. The BGH's core message – legitimate interest rather than pure profit motive – is still an important guiding principle.
Is this article a substitute for legal advice?
No. This article explains the ruling in plain language and is no substitute for individual legal advice. You can use our service at any time for a free check of your rent under rent control.
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Calculate your savings nowLast updated: October 2026. This article is for general information and is no substitute for legal advice in your individual case.