Federal Court of Justice, 11.06.2014, Ref.: VIII ZR 349/13
To save costs, many tenants sublet all or part of their flat. However, such subletting by the tenant is subject to certain conditions.
First of all, the tenant requires the landlord's express authorisation to sublet in accordance with Section 540 BGB.
If this is not obtained beforehand, the landlord can, under certain conditions, assert a claim for injunctive relief or damages against the tenant, if necessary of course in court. It is also possible for the (main) tenant to terminate the lease.
However, if the tenant informs the landlord in advance and requests the landlord's permission, the landlord may be obliged to grant permission for subletting under certain conditions.
This is always the case if the tenant has a justified interest in subletting after the contract has been concluded. This can be based in particular on a change in the tenant's financial, personal or family circumstances. The central provision for this is § 553 BGB.
(1) If, after the tenancy agreement has been concluded, the tenant has a legitimate interest in allowing a third party to use part of the accommodation, he may request the landlord's permission to do so. This does not apply if there is an important reason in the person of the third party, if the living space would be excessively occupied or if the landlord cannot reasonably be expected to allow the use of the living space for other reasons.(2) If the landlord can only be reasonably expected to allow the tenant to use the property in return for a reasonable increase in rent, he may make permission conditional on the tenant agreeing to such an increase.(3) Any deviating agreement to the detriment of the tenant is invalid.
If the landlord refuses to give his consent when such an interest exists, the tenant can terminate the tenancy agreement for cause and, under certain conditions, claim damages from the landlord for loss of rent.
However, the landlord may refuse subletting even if the tenant has a legitimate interest if there would be an important reason in the person of the third party (for example, if the third party violates the tenancy law requirement of consideration), the living space would be excessively occupied or the landlord cannot reasonably be expected to allow the subletting for other reasons.
Under certain circumstances, the landlord can also demand a reasonable rent increase.
In the above-mentioned case, the Federal Court of Justice had to decide on the claim for damages of a tenant who was refused to sublet his flat despite the existence of a legitimate interest.
Facts of the Case:
Tenant wanted to sublet his flat for a work-related stay abroad
The plaintiffs were tenants of a three-room flat of the defendant in an apartment block in Hamburg. The net rent amounted to € 535 per month.
The second plaintiff studied at the University of Ottawa/Canada from 1 September 2008 to 31 August 2009 and took up a teaching position as a professor at the School of Nursing at the University of Ottawa on 1 January 2011.
His employment contract was limited until 30.06.2014. Plaintiff 1 had been unemployed since autumn 2010 and accompanied plaintiff 2 to Canada. Both claimants have been in Canada since 15 November 2010.
In a letter dated 19 August 2010, the plaintiffs informed the defendant's property management company of their intention to sublet the flat - with the exception of one room which they would continue to use - to Ms A. H., probably for two years from 15 November 2010, because they would be staying abroad regularly during this time for professional reasons.
At the request of the defendant's property management company, the plaintiffs sent it a copy of the future subtenant's identity card in a letter dated 13 October 2010 and informed it that they planned to let her have two of the three rooms in return for a pro rata reimbursement of the rent.
Landlord generally refuses subletting
As the defendant did not respond, the plaintiffs sent the defendant a lawyer's letter dated 3 November 2010, addressed to the property management company, setting a final deadline of 10 November 2010 to allow the subletting. The defendant then refused consent to the subletting to Ms H. or to other third parties in a lawyer's letter dated 10 November 2010.
The plaintiffs then filed an action for consent to sublet to Dr S. and later to Ms B. (in each case until 31 December 2012). According to the plaintiffs, Ms H. and subsequently also Dr S. had given up their interest in renting the property in view of the defendant's denial of consent.
Local court pronounces landlord's obligation to consent to subletting
In a final judgement of the Hamburg Local Court dated 4 October 2011, the defendant was ordered to allow the plaintiffs to sublet the two front rooms of the flat to Ms B. until 31 December 2012.
Subsequently, the plaintiffs made a claim against the defendant for payment of lost subletting in the period from 15 November 2010 to 30 October 2011 in the total amount of € 7,475 plus interest and justified their claim with the fact that the prospective tenants H. and Dr S. would have been prepared to rent the two front rooms in return for payment of € 650 per month if the defendant had agreed.
Local court and regional court consider plaintiffs' claim for damages to be valid
The action brought to assert this claim was initially upheld by the local court. The defendant's appeal against this decision was unsuccessful before the Regional Court. The Regional Court based its decision in particular on the following considerations:
The defendant had refused the plaintiffs permission to sublet in breach of duty. The plaintiffs had a legitimate interest in subletting two rooms of the rented three-room flat because they wanted to reduce the rent burden and keep the flat for the time of their return to Germany.
Furthermore, the legitimate interest in the subletting would not be precluded by the fact that the plaintiffs were predominantly in Canada for the duration of the subletting. According to supreme court rulings, in view of the "mobility and flexibility in today's society", which may make it necessary to establish an additional flat at a job located elsewhere, a claim to the granting of a subletting permit would also exist if the tenant did not have his centre of life in the flat.
Landlord had not asserted any interest contrary to subletting
In the opinion of the Chamber of Appeal, these principles should also apply to a temporary stay abroad lasting several years, especially as experience abroad is increasingly required for a professional activity in Germany. The defendant's interest in subletting was not recognisable.
The defendant's breach of duty was also culpable. The defendant had not rebutted the presumption against it under Section 280 (1) sentence 2 BGB. It could not exonerate itself with the objection that the facts of the case were legally and factually difficult and opaque. It is true that the legal situation in the present case was unclear because the question of whether an obligation to grant a subletting licence exists even if the tenant is absent for several years due to a stay abroad is assessed differently in the case law of the courts and has not yet been decided by the Federal Court of Justice.
However, this uncertainty was within the defendant's sphere of risk. It could reasonably be expected to grant a subletting licence because it was not threatened with any damage as a result.
Federal Court of Justice ruling:
The BGH also sees compensation for the tenant due to the prevented subletting
The Federal Court of Justice followed this assessment in its decision and ruled that the Court of Appeal had not erred in law in affirming a claim by the plaintiff pursuant to Section 280 (1) BGB for compensation for the loss of rent in the amount of € 7,475 incurred in the period from 15 November 2010 to 30 October 2011.
The plaintiffs were entitled to permission to sublet the two front rooms of the rented flat to Mrs H. in accordance with Section 553 (1) BGB. By refusing to give its consent to the subletting, the defendant had culpably breached a contractual obligation and was therefore obliged to pay compensation for the resulting loss (loss of rent).
According to Section 553 (1) sentence 1 BGB, the tenant can demand permission from the landlord to allow a third party to use part of the living space if the tenant has a justified interest in doing so after the tenancy agreement has been concluded.
According to sentence 2 of the provision, this does not apply if there is an important reason in the person of the third party, if the living space would be excessively occupied or if the landlord could not reasonably be expected to allow the subletting for other reasons. On this basis, the Court of Appeal would have found that the plaintiffs were entitled to permission to sublet two rooms of the three-room flat to Mrs H. without error of law.
The stay abroad represented a legitimate interest of the tenants
In particular, the Court of Appeal did not err in law in finding that the plaintiffs had a legitimate interest in establishing their centre of life in Ottawa/Canada for several years from 15 November 2010.
A tenant's interest within the meaning of Section 553 (1) sentence 1 BGB could always be assumed if he had reasonable grounds for wanting to transfer part of the flat to a third party.
Any interest of the tenant of not insignificant weight that is in accordance with the applicable legal system is to be regarded as justified.
The right to be granted permission to sublet under Section 553 (1) sentence 1 BGB is not limited to cases in which the tenant's centre of life is in the flat - especially in today's society, which is characterised by mobility and flexibility.
This would run counter to the purpose of Section 553 (1) sentence 1 BGB, which is to maintain the tenant's flat even if he wishes to sublet part of it, and the tenant's decision to organise his private life "within his own four walls" according to his own ideas, which is to be recognised in principle.
Therefore, the desire of a tenant who has rented another flat at the location of his place of work in another city while retaining his previous flat to be relieved of work-related travel and housing costs must be recognised as a legitimate interest in subletting part of the flat. This also applies - as the Court of Appeal correctly assumed and which the appeal would not seriously question - to taking up (temporary) employment abroad.
Contrary to the opinion of the BGH, the scope of the subletting would not prevent authorisation in the present case.
§ Section 553 (1) of the German Civil Code (BGB) would contain neither quantitative requirements regarding the proportion of the living space remaining with the tenant nor qualitative requirements regarding its further use by the tenant.
The voices in the case law of the courts of lower instances and in the literature, which, in various forms, only want to grant the tenant a claim to permission to sublet if he would retain a substantial part of the flat for his own use (for residential purposes), would apply criteria in the interpretation of Section 553 (1) BGB which are not supported by the law and which would run counter to the regulatory purpose of the aforementioned provision.
Any conflicting interests of the landlord in subletting are taken into account by the supplementary provisions of Section 553 (1) sentence 2, (2) BGB. According to Section 553 (1) sentence 2 BGB, a claim to the granting of a subletting licence is excluded if there would be an important reason in the person of the third party, if the living space would be excessively occupied or if the landlord could not reasonably be expected to allow the subletting for other reasons.
In cases in which the landlord can only be expected to permit the transfer of use to third parties in return for a reasonable increase in rent, Section 553 (2) BGB stipulates that the landlord can make the permission dependent on a corresponding declaration of consent from the tenant.
§ Section 553 (1) and (2) BGB thus takes into account the different interests of the parties to the tenancy agreement when subletting by means of a graduated assessment of interests and reasonableness. On the other hand, Section 553 (1) BGB does not impose additional unwritten obligations on the tenant, which he should not be able to evade in order to protect the landlord by subletting.
This would be contradicted by the fact that Section 553 (1) BGB would conclusively define the interests to be taken into account. The landlord would not have an interest worthy of protection in only allowing the tenant to sublet the property if the landlord would essentially use the property himself or at least exercise control over the property.
This is because the landlord is sufficiently protected by the fact that the subtenant is the tenant's vicarious agent with regard to the care of the rented property and the tenant is therefore liable to the landlord for breaches of the duty of care in accordance with Section 278 BGB.
The Court of Appeal also erred in law in denying the existence of grounds that could prevent a claim for permission to sublet in accordance with Section 553 (1) sentence 2 BGB.
The landlord had culpably refused the subletting
The defendant had also culpably refused permission to sublet. Pursuant to Section 280 (1) sentence 2 BGB, the defendant is presumed to be at fault. The Court of Appeal did not err in law in refuting this presumption.
The defendant was also not at fault because, due to an unclear legal situation, it could have assumed that it was not obliged to authorise the subletting.
It is true that the question of whether a tenant is entitled to permission to sublet if he is going to spend several years abroad, during which he will only use the remaining part of the living space sporadically for residential purposes, has not yet been the subject of a supreme court decision and is judged inconsistently in the case law of the courts of lower instances and in the literature.
However, this would not exonerate the defendant from its legal misjudgement.
Source: Federal Court of Justice
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