AMunich District Court, 29.03.2018, 432 C 1222/18
In its decision of 10 June 2015, the BGH stated that the landlord may be obliged to pay damages to the tenant in accordance with Section 280 BGB in the event of a pretence of (personal) need - as is also the case in the event of a culpable (materially) unjustified termination of a continuing obligation. However, an eviction settlement concluded between the parties can interrupt the attribution link if this is intended to compensate for the assertion of damages.
Whether an eviction settlement interrupts the imputation link between the pretence of a (personal) need situation and the damage later claimed by the tenant must be assessed by interpreting the settlement and assessing the circumstances of the individual case according to whether the parties also wanted to settle the dispute as to whether the landlord's (personal) need situation existed or was only pretended by giving in to each other. Only if the settlement was also intended to settle any claims of the tenant due to a merely feigned need is the necessary connection lacking.
If the landlord undertakes to pay a substantial consideration in an eviction settlement, such as a substantial compensation payment, the tenant's consent is a significant circumstance for the existence of a willingness to waive and thus for a tacit waiver of damages by the tenant due to a feigned personal use.
In the following case before the Munich Local Court, it had to be examined whether such a tacit waiver could also be recognised in the context of a rent termination agreement. The local court stated that the principles for the termination of personal use in the case of an eviction settlement were also transferable to (out-of-court) rent cancellation agreements.
Facts of the Case:
Former tenants sue their former landlord for damages due to feigned personal use
The plaintiffs are claiming damages from the defendant for feigned personal use in connection with a rental cancellation agreement.
The plaintiffs had been tenants of a flat together with a cellar compartment and garage of the defendant since 1 June 1987 under a rental agreement dated 10 May 1987. The total rent was € 1,208.00, and the rental agreement did not provide for a statement of operating costs. The flat was offered for sale via the district savings bank in mid-2015. The defendant acquired the flat and was entered as the owner in the land register of the Munich Local Court on 15 January 2016. He entered into the existing tenancy agreement with the plaintiff.
Landlord and tenant had concluded a lease cancellation agreement with EUR 15,000 severance payment
A written tenancy termination agreement was concluded between the parties on 03/03/08/03/2016. It included an "amicable and irrevocable" termination of the tenancy on 31 December 2016 and the obligation of the plaintiffs to vacate and hand over the flat to the defendant by this date at the latest. Cosmetic repairs were not owed. The plaintiffs were granted the right to prematurely vacate and hand over the rented property on the 15th of the month or at the end of the month with a notice period of 14 days. It was agreed that the rent would be paid on the day the rented property was vacated and handed over to the defendant.
The agreement also included an agreement that the defendant would make a compensation payment of € 15,000.00 to the plaintiffs within 14 days of signing the lease cancellation agreement. In the event that the rental property was not vacated and returned to the defendant by 31 December 2016 at the latest, the amount was to be repaid to the defendant with interest.
In the event of late return of the rental property, the payment should increase to €18,000.00 if the property is returned by 30 November 2016, to €21,500.00 if it is returned by 31 October 2016 at the latest and to €24,500.00 if it is returned by 30 September 2016 at the latest. The rental deposit was to be returned within 4 weeks of vacating and handing over the flat. The agreement did not contain a provision on existing personal requirements.
Immediately after signing the agreement, the defendant paid the plaintiffs an amount of € 15,000.00. The flat was handed over on 29 November 2016. The defendant subsequently paid a further € 6,000.00 to the plaintiffs, so that they received a total of € 21,000.00.
The flat was handed over at the end of 2016 and the landlord sold it at the beginning of 2017
At the beginning of 2017, the defendant sold the flat to a third party. On 27 July 2017, the plaintiffs declared their rescission of the termination agreement. At this time, the plaintiffs were paying a monthly rent of around € 950.00 for their new flat with a garage for a further € 70.00.
The plaintiffs argued that the defendant had notified them of his own requirements after purchasing the property, as his father wanted to move back to the city. Following legal advice, they had come to terms with a rental cancellation agreement in order to avoid the risk of a termination for personal use.
On the day of the eviction and handover, the defendant then stated that they wanted to sell the flat after all. The plaintiffs were of the opinion that they were entitled to claim damages from the defendant for feigned personal use. They had been fraudulently deceived and defrauded. The flat in Munich was "close to an asset value" because a comparable flat costs €2,135.00 net cold per month, resulting in a monthly difference of €1,222.00 to the previous rent of €913.00, which was eligible for compensation. For a period of 10 years, this would mean additional costs of € 146,640.00 that could be reimbursed. After deducting the compensation payment of € 21,000.00, they are entitled to the amount claimed.
The agreement to pay a compensation payment does not constitute a waiver of damages due to feigned personal use. The plaintiffs would be entitled to damages due to the avoidance on the grounds of fraudulent misrepresentation of the agreement and the sale that took place.
Tenants sue landlord for EUR 125,640.00 in damages
The plaintiffs have requested that the defendant be ordered to pay the plaintiffs, as joint creditors, € 125,640.00 plus interest of 5 percentage points above the base interest rate since 18 August 2017 and that the defendant be ordered to pay the plaintiffs, as joint creditors, pre-trial legal costs of € 2,885.51.
The defendant has requested that the action be dismissed.
He argues that the tenancy was terminated "of their own free will" and that there was no pretence of personal use. The plaintiffs had already declared to the previous owner that they were prepared to terminate the tenancy by mutual agreement in return for payment of a compensation sum. Although there had been talk of the father wanting to move back to the city, there had never been any discussion of terminating the tenancy for personal use in the event that no agreement to terminate the tenancy was reached. The plaintiffs were not entitled to compensation.
Judgement of the Munich Local Court:
Munich Local Court saw no claim for damages due to feigned personal use
The action is admissible but unfounded. The plaintiffs have no claim against the defendant for payment of € 125,640.00 or for reimbursement of pre-trial legal fees of € 2,885.51.
A claim for damages does not arise from § 280 Para. 1 BGB in conjunction with the rental agreement or the rental cancellation agreement, nor from § 823 Para. 2 BGB in conjunction with § 263 StGB or from the point of view of contesting the rental cancellation agreement due to fraudulent misrepresentation in accordance with § 123 BGB. § Section 263 of the German Criminal Code (StGB) or from the point of view of contesting the lease cancellation agreement due to fraudulent misrepresentation in accordance with Section 123 BGB.
Firstly, claims for damages were excluded by the rental termination agreement dated 3/8 March 2016. This constituted a tacit waiver of claims for damages due to personal use on the part of the plaintiffs.
It is true that the landlord is obliged to pay damages to the tenant in accordance with Section 280 (1) BGB in the event of feigned (personal) need. However, the attribution link between the pretence of a (personal) need situation and the damage later claimed by the tenant must be assessed by interpreting the respective agreement and considering the circumstances of the individual case according to whether the parties also wanted to settle the dispute as to whether the landlord's (personal) need situation existed or was only a pretence by giving in to each other. If the tenant's claims were to be settled on the basis of feigned needs, the necessary connection would be lacking.
However, this interpretation is subject to strict requirements. The parties' intention to waive must be unambiguous under all circumstances. In order to prove such a tacit waiver of the tenant of the aforementioned claims, special circumstances are required that indicate such a waiver.
The tenants have tacitly waived their right to compensation by making a substantial compensation payment
Such could also be seen in a substantial consideration from the landlord, such as a substantial compensation payment. This is the case here.
The principles for the termination of personal use in the case of an eviction settlement are also transferable to (out-of-court) rent cancellation agreements.
It is true that there was no major concession on the part of the defendant with regard to the termination date of the tenancy, as the tenancy was generally scheduled to end on 31 December 2016. The contract was dated 3/8 March 2016, so that there was a concurrence with the ordinary notice period of 9 months in accordance with Section 573 c (1) BGB.
However, the plaintiffs had been aware of the defendant's intention to terminate the tenancy for months. They had therefore been able to prepare for the move and, in particular, look for a new flat.
The waiver of cosmetic repairs and the option to terminate the tenancy prematurely with a short notice period are also favourable to the tenant, but are not sufficient to assume a particularly high level of concession on the part of the landlord.
According to the court, such agreements are almost standard in eviction settlements.
The shortened deposit settlement period of 4 weeks is a positive aspect from the tenant's point of view because it can often alleviate the financial burdens associated with a move. However, such an agreement is also not unusual.
However, the plaintiffs' intention to waive the claim could be inferred due to the substantial compensation payment.
The landlord-friendly contract and the defendant's economic interest in terminating the tenancy as soon as possible were taken into account.
It is known that flats without a rental contract commitment are capable of achieving higher sales proceeds in the event of a sale than flats with a rental contract commitment.
Consequently, it is obvious that due to the housing shortage in Munich, there is an increased willingness to make distance payments in order to persuade a tenant to move out by mutual agreement. Particularly in areas with a tight housing market, distance payments should be interpreted as an indication of a waiver of claims for damages.
The tenancy could undoubtedly be described as long-term and the longer the tenancy had lasted, the higher the tenant's justified expectations with regard to the amount of any compensation payment/removal cost allowance.
The staggering of the compensation payment up to € 24,500.00 also had to be taken into account, but this was also associated with a shortening of the deadline for vacating and handing over the flat.
There was also a certain risk that the compensation payment could have been cancelled in full if the latest eviction and handover date of 31 December 2016 had not been met. However, an amount of € 15,000.00 was to be paid to the tenants just 14 days after the rent cancellation agreement was concluded. This represented a considerable advance payment by the landlord.
In relation to the rent totalling € 1,208.00, the amount of € 15,000.00 can also be described as quite reasonable. The amount paid of € 21,000.00 or the maximum agreed amount of € 24,500.00 represents more than 17 or more than 20 months' rent, which is why it is clearly notable.
An overall view of all the concessions made by the landlord suggests a willingness to waive. Therefore, a claim for damages is ruled out for legal reasons.
Tenants have also not sufficiently proven the landlord's intention to use the property for their own use
In addition, the plaintiff was unable to provide evidence regarding the allegation of feigned personal use. The plaintiff had the full burden of proof. The landlord had no secondary burden of proof. It is true that the BGH imposed a secondary burden of proof on the landlord, who did not realise the need on which the termination was based after the tenant moved out, regarding the subsequent elimination of the alleged need.
However, these principles of the burden of presentation and proof in the case of feigned personal use cannot be applied to the present case. In the present case, it is not a matter of a notice of termination given under false pretences due to the landlord's operational or personal requirements.
It is true that the conclusion of a rental cancellation agreement or a fixed term included in a rental agreement under false pretences in accordance with Section 575 BGB could also constitute a sufficient element of deception.
However, this would require a specific act by the landlord, which indisputably expressed that there was a need that caused him to terminate the tenancy.
In the present case, however, it was disputed whether "own use" had been declared at all. The assertion that the landlord had asserted an intention to use the property for his own use or for the use of others was disputed between the parties. The rental cancellation agreement offered no evidence of this. The burden of proof for such an intention of third-party use is on the tenant who claims damages from the (former) landlord.
A mere general, vague suggestion of a possible need arising at a later date was not sufficient evidence. Even if it had been hinted at in the conversation that the plaintiff's father might want to return to Munich at some point and possibly move into the flat, this was harmless.
The plaintiffs were therefore unable to provide evidence. After a detailed hearing of the two plaintiffs on the one hand and the defendant on the other, the court assumed a non liquet, which was to the detriment of the party with the burden of proof.
Although the plaintiffs had credibly stated that they had sought legal advice, no witness was present during the discussions with the defendant. None of the witnesses heard were able to explain from their own perception what had been agreed between the parties. The examination of witnesses in this regard would have had the character of a fact-finding exercise and could at best have provided insufficient evidence.
The tenants have also not sufficiently explained and quantified the damage items
Moreover, the claim for damages at issue in the proceedings already fails due to reimbursable damage items.
According to the case law of the BGH, in particular relocation costs, any rent differential damage between the previous/former rent and the current rent (after relocation) as well as the legal costs of a previous eviction process are recoverable. However, the plaintiffs do not claim such damages. Furthermore, the rent for the new flat is not higher than that for the rental property in dispute.
The fact of living in Munich does not come close to an asset value in terms of damage law. A comparison of the two rental obligations for equivalent rental properties does not provide a basis for the assumption of damages in accordance with §§ 249 et seq. of the German Civil Code. No recognisable damage in the sense of an outflow of assets was realised on the part of the tenant.
There is no need to decide whether a period of 10 years should be used as a basis for calculating damages, especially as this is still largely unresolved in case law.
Contesting the lease cancellation agreement would not change the result. If one assumes an implied intention on the part of the tenant to waive claims for damages due to feigned personal use due to the specific contractual form, a contestability of the rent cancellation agreement pursuant to Section 123 BGB is out of the question from the outset. This was precisely to cover the risk that the landlord had actually been deceptive.
Due to the effective waiver of claims for damages, contestability due to fraudulent misrepresentation was also excluded. Furthermore, the requirements of § 123 BGB had not been proven by the plaintiff. In view of all this, the action had to be dismissed.
Source: District Court of Munich
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