What if your tenant stops paying? A German landlord's financial preparation guide

If a tenant stops paying rent in Germany, your own payments continue. The loan, the full service charge to the owners' association and any management fee still leave your account, while neither the rent nor the tenant's operating-cost advance arrives. German tenancy law protects tenants' homes, and recovering possession through the courts takes time nobody can reliably predict.

Most tenancies never reach this point. Your position if one does depends on three things settled in advance: how carefully and lawfully you chose the tenant, how early you act on a problem, and whether a reserve can carry several months without rent. This guide covers the financial side. Notices and court action need qualified legal advice.

Both mean lost rent (Mietausfall), but they behave differently.

• Vacancy (Leerstand): the apartment is empty. You pay every cost, including those a tenant would normally reimburse, but you can show and re-let the apartment straight away.
• Arrears (Mietrückstand): the tenant still lives there and does not pay. Your costs are the same, you cannot re-let, and legal costs, repairs and a gap before the next tenancy may follow.

A vacancy allowance, such as the €20 a month in our rental property cash flow guide, spreads the cost of short gaps between tenants. Arrears call for a reserve.

Careful tenant selection is the best protection, within legal limits. Guidance from Germany's data-protection authorities (DSK, version 2.0, January 2026) sets out what a landlord may ask at each stage.

A former landlord need not confirm that no rent is owed (Mietschuldenfreiheitsbescheinigung), so you cannot require one (DSK, citing BGH VIII ZR 238/08). Discrimination because of race or ethnic origin is unlawful for every landlord. A landlord letting more than 50 apartments is generally also barred from discriminating because of sex, religion, disability, age or sexual identity (§ 19 AGG).

Screening reduces risk without removing it. A reliable tenant can lose a job, fall ill or separate.

The deposit (Mietkaution) is capped at three months' cold rent, excluding operating-cost advances, payable in three monthly instalments and held separately from your own money (§ 551 BGB). Three limits matter:

• Size. On a cold rent of €900, the maximum is €2,700, less than two months of the costs in the example below.
• Timing. During the tenancy, a landlord may not draw on the deposit for disputed claims (BGH, VIII ZR 234/13, 7 May 2014). In practice, it is usually set against outstanding claims after the tenant has moved out.
• Competing claims. Damage, unpaid operating costs and arrears all draw on the same sum.

Unless the lease says otherwise, rent is due in advance, by the third working day of each month (§ 556b(1) BGB). Keep a rent ledger, bank records and copies of all correspondence. Every later step, from a payment plan to a court claim, depends on them.

A missed payment is often a mistake or a temporary problem, and a prompt, polite written reminder and an early conversation often achieve more than a formal letter weeks later. There is no universal reminder timetable; the right sequence depends on the lease, the circumstances and legal advice.

A tenant who has lost income may qualify for housing benefit (Wohngeld). A tenant receiving basic income support from the Jobcenter (now Grundsicherungsgeld, previously Bürgergeld) can ask for housing costs to be paid directly to the landlord, and the Jobcenter can take over rent arrears where that is justified to keep someone housed (§ 22(7) and (8) SGB II). Pointing a tenant towards support is fair, and it is often the quickest route to being paid.

Put any payment plan in writing and have it reviewed, as it can affect later rights. If a unit manager collects the rent, agree in writing what they do when a payment is missed and when they must involve you; see landlord responsibilities in Germany.

A landlord may terminate without notice for arrears in defined cases. Broadly, the tenant must be in arrears on two consecutive payment dates with the rent or with more than one month's rent, or, over a longer period, with a total reaching two months' rent (§ 543(2) sentence 1 no. 3 BGB; § 569(3) no. 1 BGB). The termination must be in writing and state the reason (§ 568(1) BGB; § 569(4) BGB). If a manager signs it, they should enclose an original power of attorney, as the tenant can otherwise reject it (§ 174 BGB).

• The grace-period payment (Schonfristzahlung). A termination without notice becomes ineffective if the arrears are paid, or a public body such as the Jobcenter commits to paying them, within two months of the eviction claim becoming pending. This protection applies only once within two years (§ 569(3) no. 2 BGB). Landlords often give an ordinary termination on the same grounds as well, and under current case law, a grace-period payment does not cure it (BGH, VIII ZR 106/23, 23 October 2024).
• A pending reform. The Mietrecht II bill, adopted by the federal cabinet on 29 April 2026, would let tenants cure an ordinary termination for arrears in the same way, once per tenancy (BMJV). In September 2026 it was still before the Bundestag and not in force (Haufe). Check the current position before relying on either rule.
• Court and enforcement. If the tenant does not leave, you need an eviction judgment (Räumungsklage) and enforcement by a bailiff (Gerichtsvollzieher). Courts must handle eviction cases with priority (§ 272(4) ZPO), but they can also grant the tenant a period to vacate of up to one year in total (§ 721 ZPO). A limited enforcement order, the so-called Berliner Räumung, can reduce enforcement costs (§ 885a ZPO).

Changing the locks or cutting off utilities is not a lawful shortcut (§ 858 BGB). For notices and proceedings, use a specialist tenancy lawyer (Fachanwalt für Mietrecht) or a landlords' association such as Haus & Grund. Tenants can turn to a tenants' association (Mieterverein).

• Building insurance. Rent-loss cover usually applies only when insured damage, such as a fire or burst pipe, makes the apartment unusable. It does not cover a tenant who stops paying. In a building with several owners, the association holds the building policy (§ 19(2) no. 3 WEG).
• Landlord legal-expenses insurance (Vermieterrechtsschutz) usually has a waiting period and excludes disputes that began before cover started. It pays legal costs, not the missing rent.
• Rent-default insurance. Where offered, check caps, screening requirements and exclusions for existing arrears.

None of these replaces a cash reserve.

This uses the Leipzig apartment from our cash-flow guide. The three- and six-month periods are stress tests, not a forecast of how long arrears or proceedings last.

Inputs: cold rent €900 plus an operating-cost advance of €210; Hausgeld €330 a month, of which €210 is normally reimbursed by the tenant; loan payment €1,026 (3.7% nominal, fixed, an assumption rather than a live offer); unit management €35; deposit €2,700, paid in full.

One month, with and without rent

The €281 excludes the €60 of monthly repair and vacancy allowances that bring the cash-flow guide's figure to €341.

No-rent stress test

Legal-cost assumption: €3,500 for first-instance lawyer and court fees plus a bailiff's advance, excluding a full removal of belongings. This is a planning figure, not a fee calculation; ask a lawyer for an estimate based on your rent. Costs awarded against a tenant are worth only what can be collected.

If your income keeps covering the usual €281 a month, the property reserve must still provide €6,830 over three months or €10,160 over six. The totals exclude repairs and the gap before re-letting, which can add further months at €1,391. The deposit arrives last, if at all, so it cannot fund the months when the money is needed.

Unpaid rent is not taxed, because rent counts as income only when received, while the costs you pay remain deductible (§ 11 EStG). Any relief arrives with the annual assessment, so leave it out of the reserve.

Compare these figures with your property reserve, which should sit apart from your household emergency fund; see how much money you need to buy a rental property. If six months without rent would force you into household savings or a missed loan payment, the reserve is too small for the purchase, or the purchase too large for the reserve.

How quickly can a landlord evict a tenant who does not pay rent in Germany?

Nobody can promise a timetable. It depends on the tenant's response, the grace-period rules, the court, any period to vacate and the bailiff. Plan for several months without rent, and take legal advice before any step.

Can I use the deposit to cover unpaid rent?

Not freely during the tenancy. A landlord may not draw on the deposit for disputed claims while the tenancy continues. After the tenant moves out, it can be set against outstanding claims, but it never exceeds three months' cold rent.

Does landlord insurance cover rent arrears?

Building insurance generally covers lost rent only after insured damage. Legal-expenses insurance pays legal costs, subject to waiting periods and exclusions, not the rent itself.

Can I ask a prospective tenant for a SCHUFA report?

Once you have chosen the applicant, you can ask for a credit report issued for tenancy purposes. The data-protection authorities regard demanding a full credit-bureau self-disclosure as excessive.