Private landlords make a significant contribution to the provision of rental housing, covering 64.4 per cent of the existing stock. For a large number of these property owners, rented properties represent a fundamental component of their private retirement provision. Faced with rising energy and living costs, they are already experiencing growing economic pressure. The draft tenancy law reform, which was debated in the Bundestag on 9 July 2026, includes regulations that, in the assessment of experts, could further restrict the scope of action for private landlords. This could represent an additional burden for this group in an already strained market environment.
Dr. Sandra von Möller, a board member of the nationwide consumer protection association Wohnen im Eigentum (WiE – Living in Property), expressed concerns about additional costs and declining returns for owners. Despite improvements in the draft, renting out properties would become economically less attractive for private providers under the planned conditions. This could lead to these providers withdrawing, which would have noticeable consequences for the already scarce housing supply, according to WiE. Ms. von Möller calls for a balanced approach between protecting tenants from abusive practices and ensuring economic viability for small private landlords.
The draft bill foresees several specific changes that affect various areas of tenancy law and have met with criticism. A significant adjustment concerns the furnishing surcharge. In future, this is to be shown separately. For fully furnished housing, a flat rate of 10 per cent of the net cold rent is envisaged as the regular presumption, which was increased during the revisions. Alternatively, a calculation can be made based on the current value of the furnishings, with 1 per cent of the current value per month being considered appropriate to allow for amortisation within a reasonable period.
Another innovation concerns short-term rentals. The draft legally defines the 'temporary use' of living space and generally limits it to a maximum of six months. Although the possibility of a one-off extension by two months – for example, for internship extensions or exam postponements – has been added, Wohnen im Eigentum criticises this rigid time limit. Ms. von Möller notes that this fixed limit does not sufficiently take into account the need for flexible housing. The relevance of this regulation arises from the fact that the rent control brake does not apply to short-term rentals.
In the area of index-linked rents (§ 557b BGB), a limitation on rent increases is envisaged in areas with a strained housing market. If the index-linked rent increases by more than 3 per cent, only half of the amount exceeding this may be passed on to the rent. This regulation is also viewed critically by WiE, as it places an additional burden on private landlords, who are themselves affected by inflation and often use rental income for retirement provision. In the association's view, this contradicts the fundamental objective of an index-linked rent. Moreover, the consumer price index only inadequately reflects actual cost developments in the real estate sector, particularly as construction costs and craft services have experienced higher price increases for years.
WiE expresses particular concerns regarding the planned extension of the grace period regulation for terminations due to payment arrears. In future, not only immediate terminations but also ordinary terminations will become invalid if the rent arrears are settled within the statutory period. From the association's perspective, this significantly shifts the cost risk to the detriment of landlords. Eviction lawsuits are associated with high court and legal fees. Although landlords can, in principle, claim reimbursement of these legal costs from tenants, it seems unlikely that tenants who have already experienced payment difficulties will be able to cover these additional costs.
