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Tenancy law: Cancellation due to late and insufficient rent payments

Schöneberg Local Court, 19/04/2017, Ref.: 7 C 186/16

According to Section 546 BGB, the tenant is obliged to return the rented property at the end of the tenancy. The tenancy can be terminated by the expiry of a notice period or by ordinary or extraordinary termination.

According to Section 573 of the German Civil Code (BGB), the landlord can only terminate the tenancy with notice if he has a justified interest in terminating the tenancy. The landlord has a legitimate interest in terminating the tenancy in particular if the tenant has culpably breached his contractual obligations to a not inconsiderable extent, the landlord needs the rooms as accommodation for himself, his family members or members of his household or the landlord would be prevented from making appropriate commercial use of the property by continuing the tenancy and would suffer considerable disadvantages as a result; the possibility of achieving a higher rent by letting the property elsewhere as living space is not taken into account; the landlord may also not invoke the fact that he intends to sell the rented premises in connection with the intended creation of residential property or after the tenancy has been transferred to the tenant. On the other hand, a warning is not to be assumed when issuing a termination notice within the meaning of Section 573 (2) BGB due to the wording. This means that the landlord can terminate the tenant's tenancy if a culpable, not insignificant breach of duty by the tenant predominates or exists when weighing up interests.

In the following case, the parties are in dispute over the surrender and eviction of the flat in dispute following several warnings and notices of termination.

Facts of the Case:

Landlord had cancelled graduated rental agreement due to permanently unpunctual rent payments

The parties are in dispute about the eviction and surrender of the flat in dispute. The parties concluded a tenancy agreement on 11 December 2008 in which they agreed a graduated rent, which was to be paid in advance on the 3rd working day of each month. The warm rent has been EUR 737 since 1 February 2016 and EUR 683 since 1 February 2013. In addition, the defendant had to ensure the annual maintenance of the heating boiler at his own expense.

With the plaintiff's consent, the defendant sublet a room in his flat from 15 March 2015 to 31 March 2016, paying a subletting supplement of EUR 40 per month. He continued the subletting at least until 30 June 2016.

The defendant paid some of the rents late and not in full. In particular, the rents for May to October 2013, the rents for February and March 2014 and the rents from December 2015 to September 2016 were all paid late. In the months of February, March, April, May and June 2016, only EUR 775 was paid instead of the EUR 777 owed. In July and August 2016, only EUR 717 was paid.

Landlord had cancelled several times without notice and in due time

As a result, the tenancy was terminated several times by the plaintiff. On 17 March 2014 without notice and alternatively with due notice for late payment, on 30 June 2016 and on 30 November 2016, and finally again on 6 September 2016 without notice and alternatively with due notice for late payment, as well as for subletting beyond the agreed period and for failure to provide proof of boiler maintenance.

Furthermore, the plaintiff sent the defendant several warnings, for example on 5 September 2013, 10 April 2014 and 14 July 2016.

The plaintiff is now seeking eviction and the surrender of the flat in dispute.

The defendant argues that the late payments do not constitute grounds for termination. In particular, as these were only minor delays and it was sufficient if a transfer order had been issued by the 3rd working day of a month. Furthermore, he had paid on time since July 2014, the termination of 18 August 2016 was therefore invalid and the late rent payments mentioned in the warning of 14 July 2016 were not so significant overall as to justify termination. The warning is therefore irrelevant.

In addition, the JobCentre would now take over the payments so that no further delays were to be feared.

The defendant also claims that he has been suffering from depression since the beginning of 2016 and is therefore only able to take care of his affairs to a limited extent. He is therefore of the opinion that his culpability is at most minimal and therefore invokes particular hardship.

He also does not consider the extended subletting to be a reason for termination, as the plaintiff had been awarded the contract and his behaviour was therefore contradictory if he now invoked his lack of consent.

Finally, the defendant disputes the failure to maintain the spa and the legality of this obligation.

Judgement of the Schöneberg Local Court

Court saw landlord's claim to eviction and surrender

The action is admissible and well-founded. The plaintiff has a claim against the defendant for eviction and surrender of the flat pursuant to Section 546 BGB.

The competent court already considers the ordinary termination of 18 August 2016 to be effective. The termination was preceded by the warning of 14 July 2016 due to previous delays and reduced payments. It was clear from this warning that a further delay would result in termination, yet the August rent was also paid late.

Insofar as the defendant argues that the warning was not in his documents, this does not change the legal situation, as the termination of 6 September 2016 as ordinary termination in accordance with Section 573 (2) sentence 1 no. 1 BGB was effective and terminated the tenancy in due time on 31 March 2017 at the latest.

It is true that at this point in time there were no payment arrears that would have authorised termination without notice in accordance with Section 543 (2) sentence 1 no. 3a and b BGB. This was because the plaintiff had mistakenly assumed when giving notice of termination that the October 2013 rent was still unpaid. However, the alternative notice of ordinary termination was still valid. It was based on sufficient grounds for termination, which were also stated in detail in the letter of termination.

At the time of the termination, the defendant was in default of payment of the September 2016 rent of EUR 737, as the payment was only received by the plaintiff on 12 September 2016. The case law of the Federal Court of Justice (BGH VIII ZR 222/15), which considers the timely order to be sufficient, does not change this.

Furthermore, the defendant did not pay the rent for February to August 2016 in full.

The underpayment and delay is an insignificant breach of duty that justifies cancellation.

The materiality of the breach of duty must be clarified as part of a comprehensive assessment of all circumstances of the individual case. This would include, above all, the complaint-free duration of the previous tenancy, the weight and detrimental effects of the breach of contract, a possible risk of repetition and the degree of fault to be attributed to the tenant (LG Berlin, 67 S 329/16).

In the present case, although the delays were only minor in each case and the reduced payments were also only minor in themselves, the breach of duty was so serious that the defendant did not change his misconduct despite numerous warnings and notices of termination. The defendant had shown through this behaviour that he was not prepared to behave in accordance with the contract. This impression would be reinforced by the further subletting despite the expiry of the licence. Especially as this was continued despite a warning relating to this. The defendant had also not complied with his statement regarding the maintenance of the spa despite the warning. Simply denying this would not be sufficient.

In the opinion of the court, the aforementioned breaches of duty do not in themselves justify termination, but they do lend additional weight to the breaches of duty relevant to termination in the context of the overall assessment. There is no apparent reason why the plaintiff should be able to assume that the defendant will behave in accordance with the contract in the future. In particular, since neither warnings nor terminations had led to contractually compliant behaviour in the past. Therefore, if the plaintiff does not wish to accept the defendant's behaviour any longer, he has no other option than to terminate the contract and enforce the termination.

Nor did the depression presented lead to a different assessment in the context of the balancing of interests. It was not apparent that the defendant was so impaired that he would not have been able to set up a standing order to ensure timely and sufficient payment. Among other things, also in view of the fact that he was perfectly capable of concluding a subletting agreement. Furthermore, it was not recognisable that, from a legal perspective, he was not in a position to move out of the flat in dispute due to his depression. Moreover, the certificate submitted by the defendant also assumed a temporary illness, so that the illness could be taken into account by granting a generous eviction period (Section 721 ZPO).

The action was therefore admissible and well-founded.

Source: Cologne Local Court

Important Note: The content of this article has been prepared to the best of our knowledge and belief. However, due to the complexity and constant evolution of the subject matter, we must exclude liability and warranty. Important Notice: The content of this article has been created to the best of our knowledge and understanding. However, due to the complexity and constant changes in the subject matter, we must exclude any liability and warranty.

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Lawyers in Cologne provide advice and representation in tenancy law.

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