Ordinary cancellation for residential tenancy: Warning letter required?

Itzehoe Regional Court, 15 March 2024, Ref.: 9 S 28/23

Residential tenancies often give rise to legal disputes, especially when it comes to terminations. A recent judgement by the Itzehoe Regional Court (judgement dated 15.03.2024, ref. 9 S 28/23) sheds new light on ordinary behavioural termination and the requirements for this. This article explains the most important aspects of the judgement and what tenants and landlords can learn from it.

Background of the Case

The parties were bound by a residential tenancy agreement that began on 1 October 2020. A rental deposit of EUR 2,000 was agreed, which the landlord was to deposit in an insolvency-proof account. The tenants did not pay the deposit, although they were asked to pay it three times in writing. The landlord then terminated the tenancy without notice and filed an action for eviction. The tenants did not pay the deposit until two months after the action was filed.

The local court ruled in favour of the tenants on the grounds that the deposit was not due due to a right of retention. However, the regional court overturned this judgement and ruled in favour of the landlord.

2. legal judgement by the regional court

The Itzehoe Regional Court clarified that the tenancy was terminated by the ordinary termination notice issued in the alternative. The landlord's required interest in terminating the tenancy is based on the tenant's culpable, albeit not significant, breach of duty in accordance with Section 573 (2) No. 1 BGB.

According to case law, a not insignificant breach of contract is sufficient for an ordinary behavioural termination. In this case, it was the non-payment of the deposit up to the time of termination.

3. importance of the warning in the event of termination

A particularly interesting point of the judgement is the question of the warning. The Regional Court found that a warning is not mandatory in order to issue an ordinary termination for conduct-related reasons. However, under certain circumstances, the absence of a warning may mean that a breach of contract does not carry the necessary weight for termination.

This means that although landlords are not obliged to issue a warning, it can be useful to substantiate their grounds for termination.

4. the tenant's right of retention

According to Section 551 (3) sentence 3 BGB, tenants have the right to withhold the deposit as long as it has not been invested separately from the landlord's assets. However, the court emphasised that this right of retention must be asserted prior to termination. Otherwise, the landlord cannot utilise his right of avoidance.

5 Important lessons for tenants and landlords

Several practical findings can be derived from this judgement:

• For tenants: A right of retention must be asserted actively and in good time. Delayed invocation can have legal consequences.
• For landlords: Ordinary termination can be enforced even without a significant breach of duty, as long as the offences are not insignificant. However, compliance with all formalities remains crucial.

6 Conclusion: Legal certainty and recommendations for action

The judgement of the Itzehoe Regional Court makes it clear that tenants and landlords must be fully aware of their rights and obligations. For landlords, it confirms that they do not necessarily have to issue a warning in the event of breaches of duty before giving ordinary notice of termination. Tenants should be aware of the importance of asserting rights of retention correctly and in good time in order to avoid negative consequences.

Landlords are well advised to take legal action at an early stage in the event of payment delays, while tenants should rely on transparent communication to avoid disputes.