With index rent, the rent brake applies only once
The rent brake (Mietpreisbremse) limits the rent at the start of a lease in areas with a tight housing market. With an index rent it plays a special role: §§ 556d to 556g BGB only apply to the initial rent of an index rent agreement (§ 557b(4) BGB). So only the start matters. All later adjustments follow the consumer price index and are no longer measured against the rent brake.
What the rent brake allows
If a flat is in an area that the state government has designated by ordinance as a tight housing market, the rent at the start of the tenancy may exceed the local comparative rent by at most 10% (§ 556d(1) BGB). These ordinances must expire by 31 December 2029 at the latest (§ 556d(2) BGB). Your federal state can tell you whether your municipality is covered.
There are exceptions. If the previous tenant's rent was higher, a rent up to the level of that previous rent may be agreed (§ 556e(1) BGB). After modernisations in the three years before the start of the lease, the permissible rent may also be exceeded (§ 556e(2) BGB). Further exceptions are set out in § 556f BGB, for example for flats first used and let after 1 October 2014 and for the first letting after comprehensive modernisation.
Why the initial rent matters so much
Because every later index increase builds on the initial rent as a percentage, an excessive starting rent has a lasting effect. An example: the permissible rent is €800, but €900 was agreed. If the index then rises by 10%, you pay €990 instead of €880. The difference grows with every adjustment.
How to challenge an excessive initial rent
An agreement on the rent at the start of the lease is void insofar as it exceeds the permissible rent (§ 556g(1) BGB). However, you can only reclaim overpaid rent if you have formally objected to the breach (a Rüge, § 556g(2) BGB). Timing matters:
- If you object within 30 months of the start of the tenancy, the objection also covers the period before it.
- If you object later, or only after the tenancy has ended, you can only reclaim rent that fell due after the objection was received.
- If the landlord relies on an exception, such as the higher previous rent, they must inform you about it unprompted before the contract is concluded (§ 556g(1a) BGB). Otherwise they cannot rely on it.
In addition, the landlord must, on request, provide information about the facts relevant to whether the rent is permissible, insofar as these facts are not generally accessible (§ 556g(3) BGB).
What happens to later index increases?
If the initial rent is too high, the agreement is only valid up to the permissible amount. If later index adjustments build on the excessive amount, you should have those checked as well. The index adjustments themselves, however, are not measured against the comparative rent again. If after a few years your rent is well above the local rent index, that alone is not a breach under an index rent.
No cap on index increases
The rent brake is often confused with the Kappungsgrenze. The cap in § 558(3) BGB only limits increases to the local comparative rent. Such increases are excluded during an index rent, so the cap does not apply. The only upper limit is § 5 of the Economic Offences Act (WiStG): a rent that exceeds the usual rents by more than 20% by exploiting a low supply is an administrative offence.
Conclusion
With an index rent, it pays to check the starting rent carefully, ideally before signing and at the latest within the first 30 months. After that, the index determines the development. Use the index rent calculator to work out how much your rent has risen so far. The basics are in our main guide Index rent in Germany. This article is not legal advice. In individual cases, tenants' associations or tenancy lawyers can help.