Community of heirs with a let property — was nun?
Your mother has passed away and, together with your siblings, you inherit a let flat or an apartment building. The tenancy continues — but now you are 2-5 people with shared obligations. We show what you must do immediately and how to keep the bookkeeping clean.
The tenancy continues automatically
German Civil Code stipulates: on the death of the landlord, the heir enters into the tenancy agreement — tenant, contract and terms remain unchanged. In the case of a Erbengemeinschaft ALL heirs jointly become the landlord (joint ownership). Every decision about the flat (rent increase, termination, major renovation) requires unanimity.
What you must do in the first 30 days
- Inform tenants in writing: "Death of the landlord, the community of heirs is the new landlord, please pay the rent from next month into the following account..."
- Open a joint account (e.g. an escrow account) — rent payments should arrive centrally
- Who is the contact person? One of the heirs should be authorised (power of attorney from the other heirs in text form)
- Apply for a certificate of inheritance at the probate court — required for correcting the land register
- Correct land register: register community of heirs (costs approx. 0.5% of the property value)
Who bears what?
Under German Civil Code, ALL heirs jointly bear:
- Rental income (belongs to the estate, proportionate to each heir's share)
- Operating costs (pro-rata advance payments + any back payments)
- Reparaturkosten + Instandhaltung
- Versicherungen, Grundsteuer, sonstige Lasten
- Tax: each heir is taxed on their SHARE of the rental income through their own income tax (letting)
Tax particulars
Income tax (letting): Each heir enters their share of the income + deductible expenses — according to their inheritance quota (e.g. 1/3 with 3 heirs). Important: the uniform determination — the tax office requires a "Uniform and separate determination of income" (form ESt 1B), which the heirs file jointly.
Inheritance tax: Only due when the inheritance occurs (not on an ongoing basis!). Spouses have a €500,000 allowance, children €400,000 each per parent.
Speculation period (§23 EStG): If the property is sold within 10 years of acquisition by the deceased, speculation tax is payable on the increase in value — the deceased's period carries over.
Conflicts between heirs — what to do?
Common points of contention:
- Sell vs. continue letting? (a majority decision is not enough — any co-heir can apply for a partition auction, §180 ZVG)
- Who does the administrative work? (agree a clear power of attorney + an expense allowance in writing if applicable)
- A tenant moves out — who takes care of it? (settle this in advance, otherwise standstill)
- Investments: new heating, refurbishment (unanimity required for major measures)
Tip: A Erbenvereinbarung put in writing — governs the management power of attorney, distributions, investment thresholds, intention to sell. Massively reduces the risk of disputes. A notary is recommended (~€200–400).
When is dissolution worthwhile?
If you cannot reach agreement, you can dissolve the community of heirs:
- Physical partition: one heir takes over the property and buys out the others (with a valuation)
- Sale on the open market: the proceeds are divided according to the shares
- Partition auction: a court-enforced sale (often with a ~20 % discount to value)
How Rentprime helps you
Rentprime has its own Multi-Owner-Modul for communities of heirs: you set up all co-heirs with their shares, and the system automatically calculates the distribution of income, costs and cash flow by inheritance quota. For each heir there is a separate Tax export for your tax return — pre-filled with the correct share. Saves discussions + tax-adviser costs.