Have you inherited a property and are facing the decision of renting it out? This new role comes with numerous obligations, from legal formalities to financial and administrative tasks. Discover the 7 core responsibilities you need to know to avoid mistakes and costly consequences.
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The topic briefly and concisely
As an heir, you automatically enter into existing tenancy agreements and assume all associated rights and responsibilities.
The maintenance obligation is a central, ongoing duty of the landlord that encompasses the entire property.
Adhere to the 12-month deadline for utility billing to be able to make supplementary claims.
Renting out an inherited house is an excellent way to generate passive income and maintain the property's value in the long term. However, before the first rental income starts flowing, you need to be aware of your new role as a landlord and the associated responsibilities. From updating the land register and maintenance to accurate billing of ancillary costs – ignorance does not protect you from potential pitfalls here. This article systematically guides you through all responsibilities and provides you with the necessary confidence to successfully manage your inheritance and optimise your returns.
Step 1: Establish legal foundations as an owner
Before you can rent out an inherited house, you must legally secure your ownership status. The first step is to correct the land register, as this becomes inaccurate upon inheritance. Typically, you will need a certificate of inheritance or a notarised will for the transfer. If you apply for the correction of the land register within two years of the inheritance, the process is free of charge. With a property value of €250,000, you save fees of approximately €450. You should definitely take advantage of this deadline to avoid unnecessary costs. If you are part of a community of heirs, it must be collectively registered in the land register, with any co-heir able to apply. Resolving these formalities is the basis for all further steps and protects you from legal uncertainties before dealing with existing tenancies.
Step 2: Correctly adopt existing lease agreements
Often, the inherited property is already rented out. In this case, you, as the heir, automatically enter into the existing rental agreement. The principle "purchase does not break rent" applies here to inheritance, as stipulated by § 566 BGB. You assume all rights and obligations of the previous landlord and cannot simply terminate the contract due to the inheritance. The rent, the deposit, and all contractual agreements remain valid. Termination is only possible under legal requirements, for example, in the case of termination due to personal use, which is subject to strict legal regulations. Inform the tenant promptly about the change of ownership and to whom the rent is to be paid in the future. Transparent communication from the start provides a good basis for the new rental relationship.
Step 3: Ensure ongoing maintenance obligations
As a landlord, you are legally obliged to maintain the property in a contractual condition (§ 535 BGB). This maintenance obligation is a continuous duty and includes all necessary repairs to the roof, facade, windows, heating, and sanitation facilities. You must ensure that the rental property is safely usable throughout the rental period (traffic safety obligation). An exception is made for minor repairs to parts that are frequently accessed by the tenant, such as taps or light switches. The costs for these can be transferred to the tenant by a clause in the rental agreement, but only up to a limit of about 75 to 100 euros per individual repair and a maximum of 6 to 8 percent of the annual net cold rent. Therefore, a precise inspection of the property for renovation needs, as described in our guide on the obligation to renovate upon inheritance, is essential. This way you avoid unexpected costs and set the course for the next obligation: providing an energy certificate.
Step 4: Present the energy certificate when renting out a property
For every new rental, lease, or sale of a property, it is legally required to present a valid energy certificate. This document provides information about the building’s energy quality and must be presented to potential tenants unsolicited, at the latest during the viewing. You must also specify key indicators in the property advertisement. These include:
The type of certificate (demand or consumption certificate)
The final energy rating in kWh/(m²·a)
The main energy source of the heating
The construction year of the building
The energy efficiency class (if available on the certificate)
Breach of these obligations can result in a fine of up to 15,000 Euros. The cost for creating a consumption certificate is about 30 to 100 Euros, while a more detailed demand certificate can cost 300 to 500 Euros. These costs cannot be passed on to the tenant. With the correct energy certificate, you not only comply with a statutory requirement but also create transparency for the next important administrative step: the utility bill settlement.
Step 5: Create the utility bill on time
If the rental agreement includes an advance payment for operating costs, you, as the landlord, must prepare a detailed service charge statement once a year. The billing period must not exceed 12 months. The crucial deadline for you as the landlord is the delivery deadline: The statement must be received by the tenant no later than 12 months after the end of the billing period. If you miss this deadline, you can no longer make additional claims, but must still pay out any credit balance. The tenant also has 12 months after receiving the statement to file an objection. For settling additional payments or paying out credits, a period of 30 days applies. Therefore, careful and punctual billing is crucial for a smooth rental relationship and accurate rent calculation.
Step 6: Set the rent price within the legal framework
When renting out an apartment anew, you cannot arbitrarily set the rent. In many German cities and municipalities with a tense housing market, the so-called rental price brake applies. This regulation stipulates that the rent for a new tenancy may not exceed the local comparative rent by more than 10 percent. The local comparative rent is usually depicted by a rent index. Exceptions to the rental price brake apply to new buildings (completed after 1 October 2014) and following extensive renovations. To determine what rent you can charge, a detailed analysis of the location and features is essential. A professional assessment by Auctoa or an initial appraisal with our rental yield calculator can provide valuable, data-driven guidance. This is especially important if you are considering modernisations that could justify a rent increase.
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Modernisation measures that improve the living value or save energy entitle you to increase the rent. According to current law, you may allocate 8 per cent of the modernisation costs to the annual rent (§ 559 BGB). However, this increase is capped: the rent may not increase by more than 3 euros per square metre within six years. For rents below 7 euros per square metre, the limit is even 2 euros. New rules have applied since 2024 for the replacement of a heating system: here, 10 per cent of the costs can be allocated, but the increase is limited to 50 cents per square metre and month. It is important that you deduct pure maintenance costs that would have been incurred anyway. You must announce every modernisation and the subsequent rent increase to the tenant in writing at least three months in advance. Careful planning and calculation are crucial for success here.
Conclusion: Accepting responsibility and harnessing potential
What obligations do I have if I want to rent out an inherited house?
Your main obligations include correcting the land register, taking over existing rental contracts, maintaining the property, complying with safety obligations, preparing the service charge statement on time, presenting an energy performance certificate when re-renting, and observing rent control.
Can I terminate a tenant if I have inherited the house?
No, inheriting the property alone is not a reason for termination. You enter into the existing rental contract and can only terminate under legal conditions, for example, due to personal need or serious breaches of contract by the tenant. Standard notice periods apply.
What is the landlord's maintenance obligation?
The maintenance obligation (§ 535 BGB) requires you to keep the rental property in a condition suitable for contractual use throughout the rental period. This includes necessary repairs to the building fabric and technical installations.
By when must the service charge statement be with the tenant?
The service charge statement must be with the tenant no later than the end of the twelfth month after the end of the accounting period. If you miss this deadline, you can no longer demand back payments.
What happens if I don't have an energy performance certificate?
If you do not present a valid energy performance certificate when re-renting, you commit an administrative offense that can be fined up to €15,000. Key figures from the certificate must be stated in the property advertisement.
How does inheritance tax affect renting?
For rented residential properties, there is a valuation discount for inheritance tax. Only 90% of the market value is used for the tax calculation, reducing the tax burden by 10%. With our Inheritance Tax Calculator, you can determine your expected liability.
Additional useful links
Gesetze im Internet provides a comprehensive explanation of § 535 of the German Civil Code, which governs the main obligations in a rental agreement, including the duties of the landlord and tenant.
FAQ
What obligations do I have if I want to rent out an inherited house?
Your main duties include updating the land register, taking over existing rental agreements, maintaining the property, complying with the duty to ensure traffic safety, preparing the service charge statement on time, presenting an energy certificate for new rentals, and observing the rent control regulations.
Can I terminate a tenant's lease if I have inherited the house?
No, the occurrence of inheritance alone is not a reason for termination. You enter into the existing rental agreement and can only terminate under the legal conditions, such as personal use requirements or serious contract violations by the tenant. The usual notice periods apply.
What is the landlord's maintenance obligation?
The obligation to maintain (§ 535 BGB) requires you to keep the rented property in a condition suitable for contractual use throughout the rental period. This includes necessary repairs to the building fabric and technical facilities.
What is the deadline for the tenant to receive the utility bill?
The utility bill must be available to the tenant no later than the end of the twelfth month after the end of the billing period. If you miss this deadline, you can no longer demand any additional payments.
What happens if I don't have an energy certificate?
If you do not present a valid energy performance certificate when renting out a property, you are committing an administrative offence that can be fined up to 15,000 euros. Key figures from the certificate must already be mentioned in the property advertisement.
How does inheritance tax affect renting?
For rented residential properties, there is a valuation discount for inheritance tax. Only 90% of the market value is used for calculating the tax, reducing the tax burden by 10%. With our <a href="/solutions/subsolutions/erbschaftsteuer-rechner">inheritance tax calculator</a>, you can estimate your expected liability.
