Federal Court of Justice, 09.02.2011, Ref.: VIII ZR 155/10
Tenancy law provides landlords with various options for realising their rental property themselves for certain reasons.
According to Section 573 (1) BGB, however, the landlord can only terminate the tenancy if he has a legitimate interest in terminating the tenancy.
Excluded grounds for termination are, for example, a rent increase or the intention to sell the property before or after the conversion.
According to Section 573 (2) BGB, the landlord has a legitimate interest in terminating the tenancy in particular if
1. the tenant has culpably and not insignificantly breached his contractual obligations,
2. the landlord requires the rooms as accommodation for himself, his family members or members of his household (termination for personal use) or
3. the landlord would be prevented from making reasonable commercial use of the property by the continuation of the tenancy and would suffer considerable disadvantages as a result.
In particular, notices of termination for personal use or for realisation are often the subject of court decisions, as many tenants suffer financial or personal disadvantages as a result of the termination.
In the above-mentioned judgement, the Federal Court of Justice has now commented on the prerequisites for a termination for sale.
Facts of the Case:
The defendant had been the tenant of a council flat in Hamburg since 1995
The plaintiff, a housing association, bought the entire estate, including the flat rented to the defendant, in 1996. The plaintiff planned to build modern, publicly subsidised new-build rental flats in place of the simple residential buildings built in the 1930s.
Landlord terminated the flat due to prevention of proper utilisation
Among other things, the plaintiff therefore cancelled the rental agreement with the defendant in accordance with Section 573 (2) No. 3 BGB, citing urban planning and technical building defects in the previous housing estate.
As the defendant refused to give way, the plaintiff filed an action for eviction against the defendant with the local court, which was dismissed. Upon the plaintiff's subsequent appeal, the regional court upheld the action.
The defendant's appeal is directed against this.
Federal Court of Justice Decision
BGH ruled in favour of the landlord due to poor condition of the flat
The BGH ruled that the construction measures planned by the plaintiff constituted an appropriate economic utilisation of the property in accordance with Section 573 (2) No. 3 BGB because they were based on reasonable and comprehensible considerations.
The existing block of flats was in a poor state of repair and in many respects (including small, cramped rooms with low ceilings and poor lighting) did not meet modern living standards, whereas the planned new building would be able to provide modern rental flats in line with demand.
If the tenancy were to continue, the landlord would face considerable disadvantages
Furthermore, the continuation of the tenancy would also cause the plaintiff the considerable disadvantages required by law, because no structural condition corresponding to today's living requirements could be achieved by mere renovation measures of the old building fabric while maintaining the plaintiff's flat.
The further management of the last remaining block of flats without the complete realisation of the urban development concept pursued with the estate could therefore not be expected of the plaintiff, even taking into account the defendant's interest in the continued existence of the estate.
Source: Federal Court of Justice
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