Compensation for Use – “Rent” Without a Lease Agreement

What is compensation for use in real estate?

Compensation for use is a fee for the actual use of a property, thus taking the place of rent when no (valid) lease agreement exists or when such an agreement has already ended.

Typical scenarios for compensation for use instead of rent:

• A tenant does not move out after the end of the tenancy and continues to use the apartment.
• After separation or divorce, one partner remains alone in the joint house or owner-occupied apartment.
• In a community of heirs, one heir lives alone in the house while the remaining co-heirs (often siblings) receive nothing.
• A property purchase is reversed and the buyer must pay compensation to the seller for the period of use (or vice versa in the event of withdrawal from the purchase agreement by the buyer).
• Someone uses another person’s property without a legal basis, for example by driving over it or building on it.

The central difference to rent: Rent is based on a contract, whereas compensation for use is based on a statutory claim. In practice, this primarily means that the legal basis, start, and amount of the claim are regulated differently depending on the case group.

Therefore, even without a lease agreement, a payment obligation can exist—conversely, however, it does not arise automatically in every case, but often only after a formal request.

Legal bases: Compensation for use in the BGB

There is no single provision for compensation for use in the German Civil Code (BGB). Depending on the scenario, different paragraphs apply:

Anyone searching for “compensation for use BGB” usually lands at § 546a BGB (tenancy law) or § 745 BGB (community). Both provisions are covered in detail below, as is § 1361b BGB for the separation of married couples.

§ 546a BGB: Compensation for use when the tenant does not move out

The tenancy has ended by notice of termination or expiration of time, but the tenant does not return the apartment. For this situation, § 546a para. 1 BGB dictates:

“If the tenant does not return the rented item after termination of the tenancy, the landlord may demand the agreed rent or the rent customary in the locality for comparable items as compensation for the duration of the withholding.”

The landlord therefore has a right of choice: They can either continue to demand the previous contract rent or—if this was below market level—apply the customary local market rent. Especially in long-term tenancies with cheap existing rent, the compensation for use for the apartment after termination can therefore be significantly higher than the previous rent.

According to the case law of the Federal Court of Justice (BGH), the decisive factor is the market rent achievable upon re-letting, not the capped comparative rent of the rent index (Mietspiegel).

Prerequisites of the claim

1. The tenancy is effectively ended (termination, cancellation agreement, expiration of time).
2. The tenant withholds the rented property from the landlord, i.e., does not return it against their will.
3. The landlord has an intent to take back—they actually want to receive the apartment back.

In addition, the landlord can claim further damages under § 546a para. 2 BGB, for example if a subsequent tenant pulls out due to delayed clearance. Compensation for use under tenancy law is strict liability: The reasons why the tenant does not move out are irrelevant to the payment claim.

Example calculation: Tenant does not move out

The previous base rent of an 80 m² apartment is €720 (€9/m²). Comparable apartments are re-let on the market for €12.50/m². The tenancy ends on March 31, but the tenant only moves out on June 15.

• Market rent: 80 m² × €12.50/m² = €1,000 monthly
• Compensation for use for April and May: 2 × €1,000 = €2,000
• June (pro-rata 15 days): €1,000 × 15/30 = €500
• Total: €2,500 plus agreed advance payments for operating costs

If the landlord had only applied the contract rent, it would have been only €1,800. The right of choice under § 546a BGB is therefore worthwhile as soon as the market rent exceeds the existing rent. For a sample letter, a brief payment request referring to the terminated tenancy, the demanded amount, and a payment deadline is sufficient.

Compensation for use upon separation: Whoever stays in the house pays

If one spouse moves out and the other stays alone in the previously jointly used property, the partner who moved out can demand compensation for use for the house upon separation.

The legal basis during the period of separation is § 1361b para. 3 sentence 2 BGB: The spouse remaining in the marital home owes the departing spouse remuneration “insofar as this corresponds to equity.”

Also in case of voluntary move-out

A common misconception: Whoever moves out voluntarily loses their claims. That is wrong. Compensation for use in case of voluntary move-out is just as possible as after a court order assigning the home. The only decisive factor is that one spouse left the apartment to the other, who now uses it alone.

However, the claim does not arise automatically: It must be explicitly asserted, ideally in writing and provably. Only from this point forward does the payment obligation run—a retroactive claim for the time before is generally excluded.

Amount during the separation year and thereafter

According to established case law, a special rule applies to the amount of compensation for use during the year of separation: In the first year of separation, the full market rent is usually not applied, but only the so-called appropriate living value (angemessener Wohnwert).

This is the amount the remaining spouse would have to pay for a smaller apartment appropriate to their circumstances. Background: In the year of separation, no one should be forced to move out immediately or sell the house; the separation should be financially cushioned.

After the end of the year of separation—at the latest upon service of the divorce petition—the valuation shifts: Then, as a rule, the full objective rental value is decisive, i.e., the rent achievable on the market if the house were let (pro-rata according to ownership shares).

Example calculation: Calculating compensation for use upon separation

Spouses each own half of a house with an objective rental value of €1,600 cold rent. The wife moves out; the husband remains. An appropriate apartment for him alone would cost €800.

• In the separation year: Decisive is the appropriate living value of €800. Since the wife owns half of the house, she can mathematically demand €800 × ½ = €400 monthly (depending on the individual case and balancing of equity).
• After the separation year: Decisive is the full rental value of €1,600. The wife’s claim increases to €1,600 × ½ = €800 monthly.

Housing advantage (Wohnvorteil) or compensation for use?

Compensation for use and housing advantage both capture the same economic benefit of living rent-free, but they must not be double-counted.

If a housing advantage is already attributed to the partner remaining in the house as imputed income during separation or spousal maintenance, there is generally no room for a separate compensation for use—and vice versa.

In practice, this issue is therefore usually resolved within the context of maintenance calculation; independent compensation for use comes into consideration primarily when no maintenance is owed or can be paid.

Mortgage, charges, and offsetting

Frequently, the partner remaining in the house services the joint property mortgage alone. This is taken into account when calculating compensation for use for a house with a mortgage: Interest and, if applicable, principal payments made by the occupant toward a joint loan can be offset against the rental value.

For example, if the remaining spouse pays €900 monthly toward the joint loan and half of the rental value is €800, no payment claim usually remains in the end—on the contrary, the paying party may demand joint debtor compensation. This offsetting is one of the most common points of dispute and should be factored in from the outset of any calculation.

Unmarried couples and new partners

§ 1361b BGB does not apply to compensation for use in the case of a house owned by unmarried couples—it requires a marriage. If both partners are co-owners, § 745 para. 2 BGB applies instead: The co-owner who moved out can demand a reorganization of use and a payment as compensation.

If the property belongs to only one partner, the other generally has no claim after moving out; conversely, the sole owner can demand surrender from the remaining ex-partner and, if necessary, compensation pursuant to §§ 987 et seq. BGB.

If a new partner moves into the house with the remaining spouse, this does not alter the underlying claim—however, it can influence the balancing of equity: Someone living rent-free with a new partner in the joint house can hardly claim financial leniency. In such cases, courts apply the full rental value more quickly, sometimes even during the separation year.

After the divorce

§ 1361b BGB no longer applies to compensation for use after the divorce decree becomes final. If the house remains in joint ownership, the claim is now governed by § 745 para. 2 BGB, as with any other co-ownership community; for the former marital home, § 1568a BGB may additionally play a role.

Practically, little changes regarding the amount: The objective rental value remains decisive, distributed according to ownership shares. Here, too: Compensation for use after divorce must be explicitly demanded and only takes effect from the request onward. The same principles apply to a jointly owned apartment after separation.

Community of heirs: One heir lives in the house—Compensation for use for the others

The classic scenario in inheritance law: The parents pass away, three siblings inherit the parental home in equal shares, but only one lives in it—often already for years. When one heir lives in the house within a community of heirs, the question of compensation for use arises for the remaining co-heirs.

The answer: Yes, a claim exists—but only under certain conditions, and the timing of assertion is critical.

Legal basis: § 745 para. 2 BGB

The community of heirs is a community within the meaning of §§ 741 et seq. BGB (via § 2038 para. 2 BGB). According to § 745 para. 2 BGB, each participant can demand administration and use that corresponds to the interest of all participants according to reasonable discretion.

If one co-heir uses the property alone, the others can demand a reorganization of the use—and as part of this reorganization, a monthly payment, namely compensation for use in the community of heirs.

No claim without demand for reorganization—and not retroactively

The most important point, which is most frequently overlooked in practice: The claim does not arise automatically with the opening of the succession, but only when the remaining co-heirs explicitly demand a reorganization of use. Sole use alone does not trigger a payment obligation.

Anyone who remains silent for five years and then demands retroactive compensation for use in the community of heirs for the entire period will generally come up empty-handed: Without a prior demand, there is fundamentally nothing for the past.

The situation is different only in exceptional cases, such as when the occupying co-heir deliberately excluded the others from use—then claims under § 2038 in conjunction with § 743 BGB or based on unjust enrichment come into consideration.

Practical consequence: Co-heirs who want compensation should make a written, provable demand for payment as early as possible (registered mail, email with read receipt, lawyer’s letter). From this moment, the claim runs—money is lost for every further month of hesitation.

Calculating compensation for use in a community of heirs

The amount is based on the objective rental value of the property, i.e., the customary local market rent. The occupying co-heir owes the others their share in accordance with their inheritance quotas. An example calculation for three siblings:

• Market rent of the parental home: €1,500 cold rent monthly
• Inheritance share per sibling: 1/3
• The brother living in the house owes each sister: €1,500 × 1/3 = €500 monthly
• Total burden on the occupying co-heir: €1,000 monthly (he “pays” his own third to himself)

Consumption-dependent utility costs (electricity, heating, water) are borne by the occupant anyway. Property charges such as property tax, building insurance, or necessary maintenance are borne proportionally by all co-heirs—if the resident pays them alone, he can offset them.

If the occupying heir also covers mortgage installments for a loan on the house belonging to the community of heirs, this must also be offset.

Agreement or template for the community of heirs

A written usage agreement makes sense: Instead of arguing for years, the co-heirs enter into a short contract on compensation for use in the community of heirs.

A usable template contains at least: the description of the property and co-heirs with quotas, the monthly amount and its derivation (rental value), due date and payment method, the distribution of utility costs and charges, an adjustment clause (e.g., review of rental value every two years), and a provision on termination (moving out, sale, dissolution).

Such an agreement can be informal; for evidentiary reasons, it should be fixed in writing and signed by everyone.

Statute of limitations in the community of heirs

The regular limitation period of three years applies to the limitation of compensation for use in the community of heirs (§ 195 BGB), starting at the end of the year in which the respective monthly claim arose.

Anyone asserting claims in 2026 that arose following a demand in 2022 may have already lost the months from 2022. The limitation period is suspended by filing a lawsuit or court payment order—not by simple warning letters.

Co-owners outside of marriage and inheritance

The principles of § 745 BGB regarding compensation for use apply to any fractional community (Bruchteilsgemeinschaft)—meaning also when two friends, siblings, or an unmarried couple bought a house together and only one still lives in it.

The non-occupying co-owner of the house can demand compensation for use as soon as they request a reorganization of use. Amount: Market rent × co-ownership share, minus offsettable payments made by the occupant toward joint charges and loans. If no agreement is reached, the last resort remains the dissolution of the community, if necessary via partition auction.

Reversal of a house purchase: Compensation for use after withdrawal from the purchase agreement

A completely different case: A real estate purchase is reversed, for example due to fraudulently concealed defects. If the buyer withdraws from the purchase agreement, they receive the purchase price back—but under § 346 para. 1 BGB, they must surrender the benefits drawn.

For the period they lived in the house, they owe the seller compensation for use after the house purchase. Conversely, the seller must pay interest on the received purchase price.

How high is compensation for use upon withdrawal from a purchase agreement?

For real estate, the amount is usually calculated via pro-rata linear depreciation, not via market rent. The standard formula:

Compensation for use = Building value (excluding land) × actual duration of use ÷ remaining useful life of the building

Example calculation: The purchase price is €500,000, of which €400,000 accounts for the building. The remaining useful life is assumed to be 80 years. The buyer lived in the house for 3 years.

• Annual usage value: €400,000 ÷ 80 years = €5,000 per year
• Compensation for use for 3 years: 3 × €5,000 = €15,000

Alternatively, courts sometimes use local customary rent; the linear method is usually more favorable for buyers. The land portion is excluded because land does not depreciate. Anyone withdrawing or facing a withdrawal should calculate both ways—the difference can be five figures.

Incidentally, the same logic applies to co-sold inventory: A pro-rata compensation for use may also apply to a co-purchased fitted kitchen upon reversal, calculated according to its (significantly shorter) useful life.

Calculating compensation for use: How to determine the amount

The amount of compensation for use depends on the case group—the common thread, however, is almost always the objective rental value of the property. Anyone wishing to calculate compensation for use for a house proceeds in four steps:

1. Determine objective rental value: customary local base rent per m² × living space. Indications are provided by the local rent index (accessible online in many municipalities, e.g. via the website of your city), reports by the local expert committee, or comparable listings. For detached houses without a rent index value, often only an expert report can help.
2. Apply share: In the case of co-ownership or a community of heirs, you are only entitled to your share (rental value × ownership or inheritance share). In the year of separation, the lower appropriate living value replaces the rental value.
3. Deduct opposing items: Payments by the occupant toward joint loans, property tax, insurance, and maintenance are offset.
4. Calculate from the correct point in time: for § 546a BGB from the end of the contract; for separation and community only from the provable payment demand.

Calculators and rules of thumb

A generic online calculator for property compensation for use can only provide rough guidance because equity balancing, offset items, and shares are individual. A good rule of thumb for your own rough calculation is:

Monthly claim = customary local base rent × own share − eligible payments by the occupant

Taxes: Is compensation for use taxable?

Whether compensation for use must be taxed depends on the legal cause of payment. The main cases at a glance:

VAT does not regularly apply to residential space usage: Letting of residential space is tax-exempt under § 4 No. 12 UStG, and this applies accordingly to compensation for use. The situation may differ for commercially used areas with a VAT option.

And for the payer: Compensation for use for a self-occupied house is generally not tax-deductible—private living expenses. It may be deductible if the property is used professionally or for income generation. Binding information is provided by the competent tax office; general information is available from the Federal Ministry of Finance.

Retroactive claims and statute of limitations

Whether you can claim compensation for use retroactively depends on the legal basis:

• § 546a BGB (tenancy law): Yes. The claim arises by law from the first day of withholding and can be asserted for the past—limited by the three-year statute of limitations.
• § 1361b BGB (separation): Generally no. The claim takes effect only from the serious payment demand; for the time before, there is regularly nothing.
• § 745 para. 2 BGB (community of heirs, co-ownership): Generally no. Without a demand for reorganization, no retroactive compensation for use for the house—exceptions only in cases of intentional exclusion of other entitled parties.

For all case groups, the regular statute of limitations of three years applies to compensation for use from the end of the year in which it arose (§§ 195, 199 BGB). Anyone with claims should quantify them promptly and, if necessary, take steps to suspend the limitation period.

Enforcing claims: Asserting, sample letter, lawsuit

You assert a claim for compensation for use in three stages:

1. Written payment request: A sample letter for compensation for use does not require a lawyer. It should contain: property, legal position (landlord, co-owner, co-heir with share, separated spouse), legal basis (§ 546a, § 745 para. 2, or § 1361b BGB), demanded monthly amount with brief derivation via rental value, start of payment obligation, and a two-week deadline. Send provably via registered mail. This basic structure works as a template for all scenarios—from a house in a community of heirs to separation.
2. Negotiation and agreement: Often a written usage agreement can be achieved—especially in families, the fastest and cheapest solution.
3. Court proceedings: If compensation for use is not paid, filing a lawsuit remains. For spouses, the Family Court (family matter) has jurisdiction, otherwise, depending on the value in dispute, the Local or Regional Court. Information on jurisdictions and procedures is available at the Justice Portal of the Federal State and the Länder.

Regarding the value in dispute: If ongoing, including future, compensation for use is sued for, the value in dispute for recurring payments is regularly assessed according to the annual amount (up to 3.5 times the annual value pursuant to § 9 ZPO or § 51 FamGKG in family matters) plus due arrears.

At €600 per month, the value in dispute for future compensation for use quickly reaches €7,200 and more—relevant for court costs, lawyer fees, and jurisdiction. Anyone wishing to sue for compensation for use should have costs and prospects of success reviewed by a lawyer in advance; in case of low income, legal aid (Verfahrenskostenhilfe) may be considered.

Special cases: Right of way, transformer station, right of residence

Right of way

Anyone granting a neighbor a right of way across their land can agree on an ongoing payment or a one-off payment for it. The amount of compensation for use for a right of way is based on the land value of the burdened area and the intensity of use.

Annual amounts in the range of a few percent of the proportional land value or a capitalized lump-sum payment upon creation of an easement are customary. Standard land values are provided by expert committees, centrally accessible via BORIS-D.

Transformer station and line rights

If a grid operator’s transformer station is located on your property or utility lines run through it, the operator usually pays compensation for use for the transformer station or line right—mostly as a one-time compensation upon registration of a restricted personal easement, measured by area, land value, and reduction in value of the property.

Right of residence and death

A registered right of residence (Wohnrecht) expires upon the death of the entitled person (§ 1090 in conjunction with § 1061 BGB)—heirs of the holder cannot continue it and owe compensation themselves in case of further use. Conversely: If the surviving partner continues to live in the heirs’ property without a registered right, the heirs can demand payment according to the principles outlined above.

Frequently Asked Questions

What does compensation for use mean?

A statutorily owed fee for using a property without a (continuing) lease agreement—economically rent, legally an independent claim.

How is compensation for use calculated?

Basic formula: local customary base rent × own ownership or inheritance share, minus offsettable payments by the occupant (mortgage, charges). In the separation year, the lower appropriate living value applies instead; upon reversal of a purchase, pro-rata linear depreciation.

When must payment be made?

In tenancy law, from the end of the tenancy. In separation, co-ownership, and communities of heirs, only from the explicit, provable demand for payment—therefore: demand early and in writing.

Does the claim expire under the statute of limitations?

Yes, regularly after three years at the end of the year. Only a lawsuit or court payment order suspends the limitation period, simple reminders do not.