Subletting Your Flat for a Profit — Can the Landlord Terminate Your Tenancy Over It?

Subletting your flat at a profit can cost you more than a strained relationship with your landlord. I explain when termination becomes a real risk and how to handle it properly.

You sublet your room in a shared flat while you spend a semester abroad, or you hand the place over to holiday guests at the weekend — and you take in noticeably more than you pay in rent yourself. Now your landlord has caught wind of it and is coming at you with some sharp words. Is that enough to end your tenancy?

In brief

Subletting at a profit is not, in itself, an automatic ground for termination. Problems only arise where you sublet without the landlord’s required permission, or where the arrangement is in truth a business in its own right that has nothing to do with the mere grant of use under § 553 BGB. That is when you risk a warning and, if it happens again, termination without notice. If, on the other hand, you have properly asked for permission, you are in a far stronger position — even where you end up with a surplus.

How I can help

• Assessing whether your subletting requires permission and whether you have a legitimate interest
• Drafting the request for permission to the landlord, or reviewing a refusal
• Fending off a warning or termination based on allegedly unauthorised subletting
• Judging whether your arrangement (room in a shared flat, holiday letting, long-term subletting) still counts as a grant of use or has already become a business of your own
• Representing you in eviction-protection proceedings if the landlord has already given notice

When you are actually allowed to sublet

Under § 553 BGB you have a claim against your landlord for permission to let a third party use part of the rented living space — provided a legitimate interest in doing so arises for you after the contract has been concluded. That is a low bar: a spell abroad, a new relationship, a financial squeeze, or simply not wanting to live alone in a flat that has become too large will, as a rule, suffice. Permission can only be refused where there is good cause in the person of the subtenant, where the flat would become overcrowded, or where the grant of use is otherwise unreasonable for the landlord for some other important reason. One key point: the claim relates to part of the living space — if you want to hand over the entire flat, § 553 BGB does not apply, and you need the landlord’s separate, voluntary consent.

Where the grant of use is only reasonable for the landlord if the rent goes up (for instance because the additional occupant means higher running costs or greater wear and tear), the landlord may make permission conditional on a reasonable subletting surcharge. That is normal and no reason to give up on obtaining permission altogether.

Where the line to a business runs — and why profit alone is not enough

The fact that subletting produces a surplus does not make it unlawful. The law does not require altruistic motives of you — you need not wring a loss out of the flat in order to rely on § 553 BGB. Even so, the case law here has become clearer over time: the right to sublet serves the temporary grant of use to a third party, not the turning of a rented flat into a permanent commercial enterprise of your own. Anyone who systematically and permanently re-lets the flat on a short-term basis to a rotating cast of guests — in the style of a commercial holiday letting, say — is, as a rule, operating outside what counts as a mere grant of use. In such cases the landlord may refuse permission without your having any claim to it, and permission already granted will generally not cover a business model of this kind in any event.

In practical terms: an occasional surplus from a permitted, time-limited sublet is not a problem. A permanent, commercial-looking letting business run out of your own rented flat is — regardless of whether you asked first or not.

Termination: when it is truly a risk

Landlords cannot terminate over the profit as such, but over the breach of contract behind it. Two routes matter in practice:

Termination without notice following a warning (§ 543(2) no. 2 BGB): If you let a third party use the flat without authority — that is, without the required permission or beyond the permitted scope — that is a serious infringement of the landlord’s rights. Before terminating without notice, however, the landlord must, as a rule, warn you and give you the chance to bring the unauthorised subletting to an end. Only if you carry on despite the warning may notice be given without a period. Without a prior warning, such a termination is, as a rule, ineffective.

Ordinary termination (§ 573 BGB): An ordinary termination is also conceivable, on grounds of a significant, culpable breach of contractual duty, where the unauthorised subletting has been warned about but is not (yet) serious enough for the without-notice route, or where the landlord opts for this milder path. Here too, the ground must be set out specifically in the notice of termination.

If, on the other hand, you properly asked for permission and received it — or would have had a claim to it because a legitimate interest existed — then there is no breach of contract in the first place. A termination based solely on the surplus you have made will not stand in that case.

An example from practice

A tenant moves abroad for a year for work and sublets the flat in its entirety during that time, without informing the landlord. The rent from the subtenant is noticeably above the tenant’s own basic rent. The landlord learns of it through the neighbours, issues a warning over the unauthorised subletting and demands that the arrangement be unwound. The tenant does not respond, whereupon the landlord terminates without notice. Had the tenant asked for permission beforehand, they would have had good prospects of obtaining it given the work-related stay abroad — at most against a subletting surcharge. Because the tenant instead handed the whole flat over without permission, the warning was justified, and the without-notice termination following the continued breach of duty stood a real chance of success.

Common mistakes

• Just going ahead and subletting, and only telling the landlord once they ask about it themselves
• Assuming a verbal “yes” is enough — leaving you without proof if a dispute arises
• Confusing partial and complete handover: anyone who hands over the whole flat leaves the scope of § 553 BGB
• Letting a permitted, occasional sublet drift into a permanent letting business, without the permission ever having been extended to cover it
• Not responding to a warning at all, or responding defiantly rather than factually — even though that is precisely the last chance before termination

Frequently asked questions

Do I have to tell the landlord how much I earn from subletting?

There is no general duty to do so. What matters for your claim to permission is your legitimate interest in the grant of use, not the level of the sub-rent. That said, where the landlord legitimately demands a subletting surcharge because the grant of use would otherwise be unreasonable for them, the amount of the sub-rent can play an indirect part in setting it.

What if the landlord refuses permission for no reason?

If a legitimate interest exists and none of the statutory exceptions applies, you have an enforceable claim to be granted permission. In practice, it is worth starting with a written, well-reasoned request — often a court dispute can be avoided that way.

Can the landlord terminate without notice without warning me first?

In the case of unauthorised subletting, generally not. A warning can be dispensed with only in narrow exceptional cases, for instance where it would plainly be futile. Without a warning, a without-notice termination on this ground is usually open to challenge.

Does a holiday-rental platform like Airbnb automatically count as a business?

Not automatically, but the permanent, repeated short-term re-letting to a rotating stream of guests resembles a commercial lodging operation, structurally, more than it does classic subletting. The more regularly and professionally the model is run, the more likely it is to leave the protective scope of § 553 BGB.

I have already received a warning — what now?

Respond promptly and in writing, end the unauthorised subletting straight away if in any doubt, and have it checked whether the warning was justified at all. Responding wrongly, or not responding, here risks the termination that follows.

Your next step

Whether your subletting rests on secure legal footing, or whether a warning or termination will in fact hold up, always turns on the individual case — from the type of grant of use to how you respond to any warning. Speak to me before you reply to a letter from your landlord or begin subletting: in an initial consultation we will look closely at your situation and clarify the next steps. You will find further articles on renting and property ownership at /en/topics/real-estate-law.

This article provides general information and is no substitute for legal advice in an individual case. Last updated: 2026-08-03.

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