Tenancy Law: Immediate Termination Due to Commercial Subletting

District Court of Berlin-Mitte, Judgment from 15.03.2023, Case No. 17 C 281/22

Even if a rental agreement stipulates that several rooms of an apartment may be sublet with the landlord’s consent, this does not constitute consent to commercial subletting. If commercial subletting takes place anyway, this constitutes grounds for termination under Section 543 of the German Civil Code (BGB), and the landlord can terminate the lease without notice. Subletting to more people than permitted by the landlord also constitutes unauthorized transfer of the rental property under Section 543 (2) Sentence 2 No. 2 Alt. 2 BGB.

In dem vorliegenden Fall vermietete ein Mieter drei und zeitweilig vier Zimmer seiner 4,5 Zimmer Wohnung unter und erzielte damit erhebliche Einnahmen. Die Vermieterin hatte jedoch nur die Untervermietung von drei Zimmern und auch nur nach ihrer vorherigen Zustimmung gestattet. Daher mahnte sie den Mieter ab und kündigte das Mietverhältnis schließlich fristlos. Als der Mieter die Wohnung nicht räumte, erhob sie Klage auf Räumung und Herausgabe der Mieträume vor dem Amtsgericht Berlin-Mitte. Das Gericht gab der Klage statt.

Facts

Tenant sublet the apartment to different people and earned significant income.

The plaintiff in this case was the landlord, and the defendant was the tenant. On 09.10.2010, the parties signed a rental agreement for a 4.5-room apartment in Berlin. The agreement stipulated that subletting required the landlord’s explicit consent and could be denied for legitimate reasons. Even with permission, a maximum of three rooms could be sublet.

Starting in February 2018, three rooms were almost permanently sublet to frequently changing tenants. Initially, permission was obtained to sublet to three people, but new subtenants moved in, and the landlord was not informed of the changes.

On 18.09.2018, the plaintiff issued a warning to the defendant.

On 01.11.2018, the tenant was again granted permission to sublet four rooms. When the tenant applied for new approval for another subtenant, the landlord initially refused but later agreed to the subletting of the fourth room in exchange for an additional subletting fee.

During a smoke detector inspection, the landlord discovered new subtenants about whom she had not been informed. As a result, the landlord issued another warning to the defendant on 27.06.2022 and demanded that the subletting cease by 31.07.2022, warning that failure to comply could lead to immediate termination of the lease. After the defendant provided the names of the new subtenants, the landlord informed him on 06.07.2022 that only subletting to a maximum of three people would be allowed, and this was conditional on paying an additional fee of €50 per person per month. She again warned of possible termination for unauthorized subletting.

Landlord eventually terminated the lease without notice after several warnings

When the sublet rooms were still occupied on 03.08.2022, the plaintiff issued a notice of immediate termination on 08.08.2022 and alternatively terminated the lease with effect from 31.05.2023. The landlord demanded that the tenant vacate the premises by 24.08.2022, but the defendant did not comply.

The landlord also claimed that the apartment was currently sublet to at least five people without her permission, generating significant income for the defendant, with each subtenant paying €500 per month.

The defendant argued that the landlord was obliged to approve the subletting to the current residents. He claimed the rental agreement had always been structured for subletting multiple rooms and that permission to rent the fourth room remained valid. The rent charged to subtenants varied, with a total surplus of €2,378.76 annually. He also stated that he occupied one of the rooms when in Berlin.

District Court of Berlin-Mitte Ruling

The Berlin-Mitte District Court ruled in favor of the landlord. The plaintiff was entitled to demand the eviction and return of the rental premises under Section 546 (1,2) BGB, as the rental agreement had been effectively terminated by the letter dated 08.08.2022. The court found that the tenant’s commercial subletting of the rental property constituted a legitimate reason for termination under Section 543 (1) BGB. Such grounds for termination exist when, considering all the circumstances, the continuation of the lease becomes unreasonable for the landlord.

Court deemed the subletting to be for commercial purposes

Based on the subletting contracts, the court calculated that the defendant earned an annual surplus of €7,358.76 from subletting. This constituted subletting for commercial purposes. Even the defendant’s admitted surplus of €2,378.76 would be sufficient to qualify as commercial subletting. The rental agreement did not explicitly allow for such subletting, and the landlord had made it clear that she did not consent to commercial subletting.

The defendant’s argument that he occasionally occupied one of the rooms was irrelevant, as the subletting was still considered commercial due to the surplus generated, and the apartment was currently sublet to four people, while the landlord had only consented to three.

Subletting to four people instead of three provided grounds for termination

Subletting to four people also constituted grounds for termination under Section 543 (2) Sentence 2 No. 2 Alt. 2 BGB, as the rental premises were sublet to four rather than the three people permitted by the landlord, making the subletting to at least one person unauthorized.

The defendant had no legal claim under Section 553 (1) BGB to demand permission to sublet the fourth room, as there was no legitimate interest in doing so. Additionally, the landlord had clearly indicated that each new subletting arrangement required her approval.

The court concluded that all conditions for immediate termination had been met, including a termination notice specifying the reason and prior warnings.

Source: District Court of Berlin-Mitte

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 changes in the subject matter, liability and guarantees are excluded.Important Note: The content of this article has been prepared to the best of our knowledge. However, due to the complexity and constant changes in the legal field, we exclude liability and warranties.

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