The BGH said that second-hand cigarette smoke from a neighbouring balcony is a "substantial nuisance" and could be regulated by local authorities.
The decision made set no specific restrictions, but instead the ruling makes allowances for limitations set on a case-by-case basis in favour of those who complain about too much cigarette smoke coming from neighbours.
Now the court of origin in Potsdam has to rule further. There, local authorities will decide how to regulate smoking times in the region in the first court decision of its kind
A pair of pensioners from Premnitz in Brandenburg took their downstairs neighbours to court when they said the second-hand smoke wafting from their balcony was excessive and disturbing.
"We only want some consideration," said the 82-year-old man who brought the suit forward after the local court's first ruling.
He and his wife live above a smoking couple and had previously brought them before courts in Potsdam. When local authorities ruled in favour of the smokers, the couple decided to appeal the decision to the higher authorities.
Following the BGH's decision, the Potsdam district court has to decide how bad the problem really is and what limits to place on the smokers.