Have you found a new attractive job but in a different city or a nicer and cheaper flat? So you want to move out of your current rented flat or house and ideally as quickly as possible? The tenancy agreement concluded between the landlord and tenant is usually for an indefinite period. If you wish to give notice to the tenant, you must comply with the statutory or agreed notice periods when giving notice if there is no reason to terminate the contract without notice. Occasionally, not only the landlord but also the tenant may find themselves in situations in which the tenancy cannot be terminated, or at least not within the desired period, by means of a normal notice of termination. The reason for this is often external factors in individual cases. In such circumstances, the contracting parties are not directly forced to accept this situation and wait and see. An alternative solution is the cancellation agreement, which is made possible by the freedom of contract. In this case, the two contracting parties agree on an earlier date for the tenant to move out. You can find out more about this in the following article, as there are a few things to consider in addition to the required agreement if you want to avoid a legal dispute.
What is a lease cancellation agreement?
Termination is a unilateral cancellation of the contract, as either the landlord or the tenant terminates the tenancy agreement, although the other party does not have to agree to this. The situation is different with the quicker variant of the cancellation agreement in tenancy law. As the name of the tenancy termination agreement suggests, both parties must agree that the existing tenancy agreement should be terminated - by offer and acceptance. Such an amicable lease cancellation agreement is always possible in most cases, even without adhering to certain deadlines. However, it must be made expressly and in most cases in writing to the other party. A verbal lease cancellation agreement is only permitted under strict conditions but is not recommended.
Rent cancellation agreement as a better alternative
When a lease cancellation agreement is more worthwhile than a normal termination depends on the individual case. The reasons are often related to the time factor. In most cases, there is an open-ended tenancy agreement, which means that the three-month notice period is often too long for an ordinary termination.
However, there are also cases where the landlord does not have a justified reason for the termination and would like to renovate the flat or sell it empty, for example. However, the landlord can only terminate the tenancy if he has a justified reason to do so. Examples of this are breach of contract by the tenant, personal use or economic reasons. If none of these reasons can be shown, the landlord can still resort to a lease cancellation agreement. In such cases, it is not uncommon for landlords to offer tenants financial incentives (e.g. a lump sum for moving costs) to make the situation more palatable.
The topic of termination for personal use is also frequently discussed in connection with termination agreements. If the landlord wants to give notice to the tenant because he wants to move into the flat himself, he must observe the cancellation blocking period. If this is the case, it is not possible for the tenant to move out promptly, as the statutory lock-up period of at least three years, which protects tenants, applies. In areas where the housing market is particularly tight, as is often the case now, the lock-in period can even be extended to 10 years. Landlords are often unwilling and unable to accept such a long period, so that the tenant is offered financial incentives in connection with the cancellation agreement.
However, a lease cancellation agreement can also have advantages for tenants. If you have given notice on your own rental property and are lucky enough to find a new home so that you can move in earlier than planned. You can offer the landlord the option of concluding a lease cancellation agreement so that you can leave your old rental property behind as quickly and easily as possible. In a successful case, this can save you paying double the rent. To make this offer more attractive to the landlord, you can suggest a new tenant. Whether such an offer is successful is ultimately up to the landlord, as there is no obligation or duty to accept such an offer. After all, life is life and unplanned events and changes often occur over which you often have little influence. Separation/divorce, a new job in another city, serious illness in a family living far away. All these circumstances can make it necessary to move and therefore also to give notice. In such individual cases, it is possible for the tenant to avoid the difficult financial situation of double rent payments and unpleasant situations with a rental cancellation agreement. In the event of the death of a tenant, it would be a successful solution for their descendants.
However, the cancellation agreement in tenancy law is also often associated with the topic of cohabitation and shared flats. In such agreed communities, all residents of the shared property often act as the main tenants in the concluded tenancy agreement. Accordingly, this tenancy agreement can only be terminated by all tenants together. In such situations, it is not uncommon for differences of opinion to arise. If, for example, there is a relationship crisis between the couple or if a flatmate has to move out of the shared flat, for example due to a change of university, the situation can easily be resolved with a tenancy termination agreement.
Cancellation agreements are common for temporary rental agreements, i.e. in situations where rental agreements are concluded for a certain period of time. In these cases, the tenant does not need to terminate the rental property, as a fixed-term tenancy agreement automatically expires at the end of the contractually agreed period. However, if you want to move out earlier than planned and agreed, i.e. leave the tenancy prematurely, a cancellation of the tenancy agreement can also be concluded here.
Requirements for a lease cancellation agreement
First of all, you should check whether it is really necessary and advantageous to conclude a rental termination agreement or whether a termination with notice is completely out of the question for you. This is because the other party to a termination agreement often wants something in return - so check what is more favourable for you. As a tenant, you should also check whether the waiver of cancellation entered in the contract is actually legally valid. Before signing a rental cancellation agreement, you should bear in mind that by signing it you are waiving your statutory protection against dismissal.
Such an agreement on the cancellation of the rent can be concluded verbally, as the written form is not mandatory. Nevertheless, it is advisable to formulate it in writing in order to avoid unpleasant cases and for evidentiary purposes. Both contracting parties should each receive a copy, which must also be signed by both parties. Although the content of the lease termination agreement is basically up to the contracting parties, you should take a closer look at the following points, as these should not be missing from a lease termination agreement if you want to avoid disputes and misunderstandings:
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- Both contracting parties must be identical to those in this rental agreement
- The rental property must be clearly stated in the cancellation agreement
- Precise details of the rental property, the date of moving out and the associated rental agreement must not be forgotten
- Dates agreed between the two contracting parties for moving out and handover
- In addition, any agreed details of the cosmetic repairs must be specified
- The financial claims of both contracting parties and their settlement should be listed in as much detail as possible
- The payment term as well as possible settlements must be listed
- In some cases, certain furnishings remain in the rented property; detailed information on this must be provided
- There should also be a provision on the utility bill, its payment or settlement and the provision on the repayment of the rental deposit paid
- It is also essential to point out that the tenant has no right of objection
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A tenancy agreement obligation to cancel the concluded tenancy agreement is inadmissible, i.e. ineffective. This is a clause that provides for an obligation for the tenant to cancel the rental agreement under certain circumstances. In addition, an agreement in the tenancy agreement that the tenant must pay a lump sum for damages or costs in the event of premature cancellation of the agreement is invalid.
Right to early release from the tenancy agreement
In principle, the tenant has no right to premature cancellation of the existing tenancy agreement. Only in exceptional cases, if the tenant has a justified interest in the cancellation and provides the landlord with a suitable new tenant, can such a claim arise. Such exceptions do not apply if the tenant has found a more suitable rental property. More precisely, the tenant's interest must clearly outweigh the landlord's interest in the continuation of the contract. In the following cases, courts have affirmed such a legitimate interest on the part of the tenant:
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- Serious illness of the tenant
- Urgent relocation of the tenant to a retirement home
- Mandatory professional relocation of the tenant
- Significant expansion of the tenant's family
- Unhappy marriage between the tenants, whereby the rental property is too large and too expensive for a single tenant
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You do not need to fear that the lease cancellation agreement will be contested, as this is generally not possible due to the mutual consent of both parties to the cancellation. Similarly, unilateral cancellation is not possible. However, there are exceptions if the tenant can prove fraudulent misrepresentation to the landlord - or vice versa. Such fraudulent misrepresentation is based, for example, on false information that can be found in the mutual agreement of the rental cancellation contract.
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.