Rent Increase Without a Rent Index: How the Expert Opinion Establishes the Local Comparative Rent

Any landlord wishing to increase the rent must substantiate the increase. In cities with a qualified rental index, this is straightforward – however, in many municipalities, there is no (or no meaningful) rental index, and for special properties, the table is often unsuitable anyway. In such cases, a specific means of substantiation comes to the fore, which is explicitly provided for by law but rarely used consistently: the Expert Opinion on the Local Comparative Rent.

The Four Prerequisites for a Rent Increase Under § 558 BGB

Before even discussing the means of substantiation, the demand for an increase must comply with the substantive limits of § 558 BGB. If even one of these is missing, the increase is invalid.

1. Waiting Periods

The rent must have remained unchanged for at least 15 months by the time the increase takes effect; the demand for an increase itself can be made no earlier than one year submitted after the last rent increase (annual blocking period). Increases following modernization or due to increased operating costs are not considered in this context.

2. Rent Cap (Kappungsgrenze)

Within a period of three years, the rent may increase by a maximum of 20 % . In areas with a tight housing market, designated by a state government by ordinance pursuant to § 558 (3) BGB, a reduced rent cap of 15 %. Ob die abgesenkte Grenze greift, hängt allein von der jeweiligen Landesverordnung ab – sie besteht nicht flächendeckend.

3. The Local Comparative Rent as the Upper Limit

The demanded rent must not exceed the local comparative rent. This is the benchmark determined by the appraisal report: the customary charges agreed or changed in the municipality for residential space of comparable type, size, equipment, condition, and location over the last six years. Important is the distinction from the pure new contract rent or asking rent: Relying solely on current listings does not determine the comparative rent as defined by law.

4. Tenant's Consent

The rent increase pursuant to § 558 BGB is not a unilateral declaration but an offer: The tenant must consent. If the tenant refuses consent, the court decides (see below). The request for an increase must also be declared and justified in text form (§ 558a BGB).

The Permissible Means of Justification (§ 558a (2) BGB)

The law provides an exhaustive list of the means by which a request for an increase can be justified:

• a (simple) rent index pursuant to § 558c BGB,
• a qualified rent index pursuant to § 558d BGB (with statutory presumption effect),
• a rent database pursuant to § 558e BGB,
• a reasoned appraisal report by a publicly appointed and sworn valuer,
• the identification of at least three comparable apartments.

All methods are legally equivalent – the landlord has the free choice. In practice, however, they differ significantly in their evidentiary weight once a dispute arises.

When the expert appraisal report is the best choice

Relying on three comparable apartments is prone to error, as the named apartments must actually be comparable and the tenant can verify this. The rental market survey, on the other hand, is not available everywhere and reaches its limits in cases of special features. An appraisal report is therefore particularly recommended,

• if the municipality does not maintain a (qualified) rental market survey ,
• in the case of special properties – high-end fittings, unusual floor plans, listed buildings, very large or very small apartments that are not reflected in the local rent index,
• in the case of commercial premises and index-linked rents, for which the local rent index does not apply anyway,
• and whenever a legal dispute is to be expected and a court-admissible means of evidence is required.

A methodologically sound expert opinion is the most reliable form of proof of rental value. It provides the comparable rent not as an assertion, but as a value derived in a comprehensible manner.

Requirements for a valid expert opinion

In order for the expert opinion to formally support the rent increase request, it must meet several conditions:

Officially appointed and sworn

§ 558a (2) No. 3 BGB expressly requires an appraisal report from a publicly appointed and sworn valuer. Das Gutachten eines lediglich frei tätigen Bewerters genügt für die formelle Begründung nicht.

Substantiated and verifiable

The appraisal report must be substantiated : The tenant must be able to verify the demanded rent based on the facts and assessments presented. Merely asserting a result is insufficient – the derivation from comparable data, as well as adjustments for location, amenities, and condition, must be evident.

The local comparative rent – not the market rent

The appraisal report must state the local comparative rent , i.e., the existing rents agreed upon or adjusted during the relevant period for comparable residential space – not the higher new-contract rent. An appraisal report that merely reflects the current market level does not support the rent increase claim.

Attached – and at the landlord's expense

The appraisal report (at least its essential content supporting the comparative rent) must be attached to the rent increase claim to be attached, so that the tenant can review it. The landlord bears the costs of the appraisal report; they cannot be passed on to the tenant.

The Type Appraisal Report: Inspection Not Mandatory

A common misconception is that every individual apartment must be inspected and appraised. Case law recognizes the so-called type appraisal report : The valuer can determine the local comparative rent for a group of similar apartments – for example, in a larger residential complex with identical layouts – collectively. The appraisal report does not need to relate directly to the specific apartment and does not require a physical inspection of each individual unit, provided it enables a comprehensible assessment of the apartment in question. This significantly reduces the effort for portfolios – but does not relieve the landlord of the obligation to ensure that the appraisal report captures the individual characteristics of the apartment.

Deadlines and Enforcement: The Path via § 558b BGB

Upon receipt of the substantiated demand for rent increase, the tenant has a consideration period until the end of the second calendar monthfollowing receipt. If they agree, they owe the increased rent starting from the third month after receipt. If they do not agree or only partially agree, the landlord can sue for consent within a further three months (§ 558b para. 2 BGB). In the proceedings, the appraisal report becomes the central piece of evidence – a carefully prepared expert report withstands judicial review and is frequently used as the basis for the decision in practice.

Special cases: commercial property, index-linked rent, and modernization

Outside the scope of § 558 BGB, the rental value appraisal retains its usefulness in: commercial tenancies and in the adjustment of Index or graduated rents it provides the objective basis for contract negotiations. And in the case of a rent increase due to modernisation under § 559 BGB, the local comparative rent may become relevant for assessing the rent increase cap. In all these cases, the question is the same: What is the sustainable, market-conform rent – determined by a valuer rather than estimated?

Conclusion

The expert opinion is not an exotic instrument, but a justification explicitly provided for by law for a rent increase – and where the local rent index is missing or not applicable, it is the most legally secure. The decisive factors are the formal requirements: a publicly appointed and sworn valuer, a verifiable derivation of the local comparative rent, and its attachment to the rent increase notice. Anyone who observes these points provides their rent increase with a basis that will also withstand judicial scrutiny.