Can Rent Be Increased After Modernization?

What the Law Says

German law allows landlords to raise rent after certain types of modernization — but only if the work goes beyond basic maintenance and delivers measurable, lasting improvements to the apartment’s value, comfort, or energy efficiency.

The legal basis is BGB § 559, which permits a rent increase only after 'modernization measures' as strictly defined in § 555b Nos. 1, 3, 4, 5, or 6 — such as installing new insulation, upgrading heating systems for energy savings, adding elevators, or improving accessibility. Routine repairs or replacements needed to keep the apartment in working order (so-called 'Erhaltungsmaßnahmen') do not count.

The increase is capped at 8% of the actual, eligible modernization costs — applied to the *annual* rent, not per month. For example, if €10,000 was spent on qualifying work, the landlord may raise the yearly rent by up to €800 (i.e., €66.67 more per month). Costs must be documented and verifiable; estimated or inflated figures are invalid.

Importantly, tenants cannot reduce rent during the first three months after energy-related modernization (e.g., new windows or insulation), even if construction causes disruption — this exception is designed to avoid short-term disputes while encouraging climate-friendly upgrades.

Statutory Text

Hat der Vermieter Modernisierungsmaßnahmen im Sinne des § 555b Nummer 1, 3, 4, 5 oder 6 durchgeführt, so kann er die jährliche Miete um 8 Prozent der für die Wohnung aufgewendeten Kosten erhöhen.

— BGB § 559(1) — German Civil Code

Statutory Text

Für die Dauer von drei Monaten bleibt eine Minderung der Tauglichkeit außer Betracht, soweit diese auf Grund einer Maßnahme eintritt, die einer energetischen Modernisierung nach § 555b Nummer 1 dient.

— BGB § 536(1a) — German Civil Code

What to Do

Sources

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