# German Federal Court rulings on tenancy law > Live situation record from CLSTR: https://clstr.news/situations/german-federal-court-rulings-on-tenancy-law > Updated: 2026-10-05T04:25:27.000Z. Sources: 4. Developments: 2. The German Federal Court of Justice (BGH) has issued several rulings clarifying aspects of rental and tenancy law. In one decision regarding rental deposits, the court ruled that landlords may, under specific conditions, offset expired damage claims against a tenant’s claim for the return of a security deposit. This ruling aims to strengthen the security function of cash deposits. The court also noted that under Section 551 of the BGB, deposits must be held separately from a landlord’s personal assets to provide insolvency protection for tenants. In a separate ruling concerning subletting, the BGH determined that tenants cannot use their right to sublet to generate profit from a property. The court held that a tenant’s interest in subletting is only legitimate under § 553 BGB if the sublet rent covers the tenant’s own housing-related expenses. Using a sublease as a business venture without landlord consent can lead to the termination of the main lease. ## Timeline ### 2026-10-05: Bundesgerichtshof rules against profitable subletting The German Federal Court of Justice ruled that tenants may not profit from subletting; sublease rents must only cover the tenant's own housing expenses to be considered legitimate. 2 sources. https://clstr.news/cluster/bundesgerichtshof-rules-against-profitable-subletting ### 2026-09-12: German Federal Court rules on rental deposit offsets The German Federal Court of Justice ruled that landlords can offset expired damage claims against rental deposits, while legal standards require deposits to be held separately to protect tenants. 2 sources. https://clstr.news/cluster/german-federal-court-rules-on-rental-deposit-offsets --- Cite as: German Federal Court rulings on tenancy law. CLSTR, https://clstr.news/situations/german-federal-court-rulings-on-tenancy-law