The subletting of residential space is a common issue in practice that involves specific legal considerations for both tenants and landlords. In particular, it raises questions regarding its permissibility, the requirements for obtaining permission, and the consequences of non-compliance. A recent ruling by the Federal Court of Justice dated January 28, 2026, which addresses the question of the tenant’s legitimate interest in profit-oriented subletting, provides an opportunity for a more in-depth examination.
Subletting refers to the tenant’s transfer of the entire apartment or a portion thereof to a third party in exchange for payment. A key feature of this arrangement is that the primary tenant is merely a user of the apartment and does not hold ownership status. Thus, there are two independent contractual relationships: one between the landlord and the tenant (primary tenancy) and another between the tenant and the subtenant (subtenancy). In contrast, there is generally no contractual relationship between the landlord and the subtenant.
This legal separation has significant consequences. If the primary tenancy is terminated, for example by notice of termination, the sublease relationship with the primary landlord does not automatically end. Rather, the subtenant is obligated to vacate the apartment as well, since they have no right of possession vis-à-vis the owner. The landlord can therefore demand the surrender of the apartment from both the primary tenant and directly from the subtenant.
Subletting generally requires the prior consent of the landlord. Without such permission, subletting the apartment to third parties is not permitted. However, the law grants the tenant a right to obtain this permission under certain conditions. This right arises from Section 553 of the German Civil Code (BGB) and requires that the tenant have a legitimate interest, that this interest arose only after the lease agreement was concluded, and that no overriding interests of the landlord stand in the way.
A legitimate interest can take many forms. It may be based on economic reasons, such as when the tenant’s financial situation has deteriorated and they rely on additional income to continue paying the rent. Personal or family reasons may also play a role, for example, if the tenant does not wish to live alone after a roommate moves out. Case law does not impose excessive requirements in this regard; it is sufficient if there are comprehensible and reasonable grounds.
Of particular importance is the question of whether an economic interest in the form of profit-making can also be considered legitimate. The Federal Court of Justice addressed precisely this issue in its ruling of January 28, 2026. In the case at hand, a tenant had sublet his apartment without the landlord’s consent and thereby generated substantial income that significantly exceeded his own rent payments.
The Federal Court of Justice clarified that a legitimate interest within the meaning of § 553 BGB does not exist if the tenant generates a profit through the sublease that exceeds his own costs. Such profit-oriented use of the apartment exceeds the protective purpose of the provision, which is primarily intended to allow the tenant to flexibly adapt to changes in their living circumstances, but not to generate profit at the landlord’s expense.
Particularly serious in this context is that subletting without the landlord’s consent constitutes a breach of duty. If it occurs despite a prior warning, this may justify termination of the lease. In the case decided, the Federal Court of Justice expressly confirmed that such a breach of duty is sufficiently serious to justify termination of the lease.
In practice, this means that tenants must obtain the landlord’s consent before any subletting. At the same time, they should carefully assess whether a legitimate interest actually exists. A mere intention to make a profit is not sufficient for this purpose and may entail significant legal risks.
In summary, it is clear that while subletting is an important tool for the flexible use of living space, it is subject to clear legal limits. Current case law makes it clear that economic interests, in particular, must be carefully evaluated and that not every form of financial motivation is legally protected.
The statements represent initial information that was current for the law applicable in Germany at the time of initial publication. The legal situation may have changed since then. Furthermore, the information provided cannot replace individual advice on a specific matter. Please contact us for this purpose.