Cologne Local Court, 07.04.2017, 208 C 454/15 m
According to Section 588 (1) BGB, the landlord can demand consent to an increase in the rent up to the standard local comparative rent if the rent has remained unchanged for 15 months at the time the increase is to take effect.
In accordance with Section 558 (1) of the German Civil Code (BGB), the customary local comparative rent is calculated from the customary rents that have been agreed in the municipality or a comparable municipality for residential space of a comparable type, size, fittings, quality and location, including energy-related fittings and quality, in the last four years or, apart from increases in accordance with Section 560 BGB, have been amended.
The purpose of the standard is to secure the respective rents within the framework of the usual market-based rents. This is intended to enable the landlord to demand a reasonable rent and, on the other hand, to protect the tenant from unauthorised rent increases.
Section 558 BGB protects the tenant in two ways and thus limits the landlord in two ways. Firstly, the rent is limited by the local comparative rent and, secondly, the landlord must comply with the rent cap in Section 558 (3) BGB. This states that the rent may increase by a maximum of 20 % within 3 years or, in areas with a shortage of rental space, by only 15 % within 3 years.
However, if the requirements of Section 558 BGB are met, according to which the landlord complies with both the local comparative rent and the rent cap, the landlord has a claim against the tenant for consent to the rent increase. If the local comparative rent is not recognisable to the tenant, for example by means of a rent index, the landlord must provide sufficient justification for the rent increase request and thereby ensure that the tenant can understand the rent increase request. If the justification is insufficient, there is no entitlement to approval. However, if the rent index is clear, it is sufficient for the landlord to refer to the respective figure, number and rent range used as a basis.
The following ruling deals with the question of whether modernisation measures justify a classification in a "younger" age category under certain conditions and to what extent this must be justified in the request for a rent increase.
Facts of the Case:
Tenant does not agree to the landlord's request for a rent increase
The parties are in dispute over the approval of a rent increase request for a flat in Cologne. The plaintiff is the landlord and requested consent to a rent increase from EUR 375.00 net cold rent to EUR 431.25 from 1 August 2015 in a letter dated 27 May 2015. The defendant, as the tenant, did not give its consent. The tenancy agreement for the flat in dispute was concluded in 2014.
The plaintiff argues that the newly set rent is the customary local rent. The flat location is good and categorisation in age group 5 is justified in view of the extensive refurbishment in 2005. As a result of the modernisation, the specifications of the Energy Saving Ordinance had even been undercut by 20 %.
The request for an increase was also made in a formally correct manner. The information was sufficient, particularly in view of the fact that the defendant was once again comprehensively informed by letter dated 16 September 2015.
Landlady sues tenant for consent to rent increase
The plaintiff is now seeking an order against the defendant to agree to the rent increase with effect from 1 August 2015.
The defendant applies for the claim to be dismissed and argues that the customary local rent amounts to a maximum of EUR 375.00, as the house was built in the 1950s and can therefore only be assigned to age group 3. Furthermore, the flat is only in a medium residential area. The letter dated 16 September 2015 was unknown to her and had not been received and the request for an increase was formally invalid due to the lack of explanations.
Judgement of the Local Court of Cologne:
Cologne Local Court sees landlord's claim to rent increase
The Cologne Local Court has now ruled that the action is admissible and partially justified. The plaintiff was entitled to consent to an increase in the net rent to EUR 426.06 from 1 February 2016 in accordance with Section 558 (1) BGB.
The standard local comparative rent within the meaning of Section 558 (2) BGB is EUR 426.06. This is stated in the expert reports dated 9 August 2016 and 13 January 2017, which the court agrees with. The expert had taken into account all significant value-forming factors. He had taken into account the particularly good insulation, the shoe cupboard in the stairwell and radiators that serve as towel rails in the upgrading, furnishings and special features.
The modernisation measures carried out in the residential building justify the upgrading of the age category
For example, special modernisation measures would justify a higher age category. In contrast, the shoe cupboard and the radiators are not to be considered as increasing the value of the entire flat.
Both new and old contracts can be taken into account in the assessment by an expert, as this would also be the case with a rent index and would therefore correspond to the standard.
The form, deadline and capping limits of the German Civil Code were also complied with
Furthermore, the form, deadlines and capping limits pursuant to Sections 558 (3), 558a, 558b BGB were complied with. However, the request for an increase dated 27 May 2015 was formally ineffective, as there was no sufficient explanation of the classification in age group 5, but this was remedied by the written statement dated 27 October 2015, so that the rent increase took effect on 1 February 2016 in compliance with the three-month deadline.
The justification requirement of Section 558a BGB is intended, among other things, to give the tenant the opportunity to check its justification. For this purpose, it is necessary that the categorisation is sufficiently justified, unless this is self-evident or evident from other circumstances.
In the case of an upgrade, not only a general presentation is necessary, but rather a detailed presentation of why and when changes were made that meet modern requirements. A later submission on a higher categorisation could remedy the formal error in compliance with the three-month deadline. An ultimately incorrect categorisation, as in the present case in 5 instead of 3, only represents a material error and does not change the rent increase deadline.
In this respect, the action is admissible, but only partially justified.
Source: Cologne Local Court
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