Hi,
We (all tenants of the building I live in) have been issued at notice that the landlord would like to renovate. This was formally communicated last week.
The renovations are to take place in a phased manner beginning with the larger apartments around end January 2013. Other apartments from early March 2013.
Post-renovations i.e. from May 2013, the rents will increase from 15%-30%.
The owners offer 3-months zero rent Feb-April along with temporary accommodation for the 4 weeks of renovation of their apartment. Tenants will have to bear the cost and effort of the move-out and move back in + any other inconvenience.
However, they require a decision (signed) before 9th January. For many of us the pace is too fast and the timing (winter) a real irritation. Of course, there are tenants who've been here 20+ years who might not be able to take a large rental increase.
In my specific case, I moved in Oct 2013 and have barely settled in. So they offered 2 extra months of zero rent until the new contract (if one signs) it takes effect. I am already aware of the MV (Mieter-verband) although I'm not sure what they can do to assist. If any of you has had experience in such situations and is familiar with the laws please let me know.

Around here, usually the group of tenants hires a lawyer to represent them and make sure things are done in accord with the relevant laws. This is also helpful in perhaps negotiating a delay, more benefits etc.. Not sure what is in your contract as per notice period, but January seems awfully short. Contacting the MV is also a good idea.