Terminations for personal use - What rules apply?
21/03/2024 · Autor: Marius Grumbt
The topic of owner-occupancy termination is the subject of intense debate, and the perspectives on it differ as you would expect. Landlords see their freedom of ownership restricted if they cannot use their property as they wish. Some feel that the protection rules are too generous, which makes termination for personal use a risk that is difficult to calculate, both legally and financially.
On the other hand, tenants often feel at the mercy of terminations for personal use. They must always expect to be forced out of their usual home and familiar surroundings and then possibly have to find new accommodation at a higher cost. The suspicion quickly arises that the personal use could be faked in order to re-let the apartment at a higher price.
A recent ruling by the Berlin Regional Court caused quite a stir: Although a termination for personal use was accepted, the tenants were given the right to continue the tenancy agreement for two years due to the impossibility of finding a suitable replacement apartment on reasonable terms (67 S 264/22). As compensation for the landlord, the court merely ordered that the previous rent be increased to the standard market level for the remaining period.
It's time for a fact check. What rules apply to terminations for personal use? How do courts rule in such cases? And what should tenants and landlords pay attention to in order to avoid conflicts and legal disputes in connection with owner-occupation?
Generally, a number of rules are intended to protect tenants in Germany. Residential tenancy agreements are usually open-ended. The landlord may not terminate the contract for a limited period or suddenly without a valid reason. A permissible reason for termination can be, for example, a breach of duty by the tenant, such as a delay in payment of at least two months' rent. Another reason for termination could be the landlord's own requirements.
In order for a termination for personal use to be effective, landlords must observe a few points. They must be able to plausibly and verifiably demonstrate that they need the apartment either for themselves or for close relatives. In certain situations, the need for external persons, such as a full-time carer, may also be sufficient grounds for termination. In this case, the landlord would have to be able to prove the corresponding need for care.
The move-in of a caregiver could be considered a 'legitimate interest' for termination. However, it should be noted that a special rule applies to purely granny apartments - i.e. small, rented apartments in otherwise owner-occupied detached houses. Landlords can terminate such apartments even without a legitimate interest, but with a notice period that is three months longer than in other cases.
If a landlord needs the apartment for himself, the need must be plausible. An example would be if the landlord intends to move into the previously rented apartment in order to live closer to his workplace. Similarly, if the landlord's family is growing and the current apartment is no longer sufficient to accommodate all family members. Own use could also be justified if the terminated apartment is barrier-free and the landlord has to move in for age-related reasons.
If the owner owns several rented apartments, he must justify why the terminated apartment is needed for himself or his relatives. In the case of a termination for personal use, the relationship between personal needs and the size of the apartment should be appropriate. For example, it would be unreasonable to terminate a large four-room apartment for a family of five in order to accommodate a student daughter.
The notice period can be up to 9 months
The notice period for a termination for personal use is at least three months, while the landlord must notify the tenant in writing. The notice period is extended depending on the length of the tenancy: to six months for a tenancy of five to eight years and up to nine months for a tenancy of more than eight years. The tenant has the right to object within two months of receiving the termination letter. In this case, the landlord can file an action for eviction, while the tenant may remain in the apartment until the case is resolved.
The letter of termination must comply with all the necessary formalities. This includes, among other things, listing the names of the persons for whom personal use is declared and, if applicable, their degree of relationship. The landlord must clearly explain the reason for the personal use and inform the tenant of their right to object.
If an apartment building is converted into condominiums, blocking periods apply for a personal use termination. The duration of these blocking periods varies depending on the federal state and municipality and can be up to ten years. Prospective buyers who wish to purchase from an owner who has previously converted a rental property into separate apartments should find out in advance about possible blocking periods.
There are also cases in which a termination for personal use is generally not possible. Some tenancy agreements exclude such a termination, and some tenants have a lifelong right of residence that also excludes a termination for personal use. However, a clause in the tenancy agreement that allows a termination for personal use according to less strict rules than those provided for by law would be invalid.
Termination due to personal use: What options do tenants have to defend themselves
If tenants want to take action against a termination for personal use, they should carefully check whether the legal requirements have been met. For example, the landlord must clearly state for whom the apartment is required. However, it is not clearly defined what degree of relationship is required to justify a termination for personal use. As a rule, however, this applies to persons for whom the landlord would have a right to refuse to give evidence under procedural law. This includes spouses, fiancés, direct relatives (children, parents, grandparents), siblings, nephews and nieces. More distant relatives such as aunts, uncles, children-in-law, parents-in-law, brothers-in-law and sisters-in-law may also be considered (Berlin-Mitte District Court, 25 C 183/22). A close personal relationship is generally not considered necessary, but can be helpful depending on the situation.
The landlord is not necessarily obliged to state the name of the person for whom personal use is claimed. However, if a name is given, it must be correct (Landgericht Berlin, 67 S 5/23). If no name is given, the person must be clearly identifiable (Landgericht Berlin, 67 S 288/22). A general statement such as 'for one of my children' is not sufficient. It is also not necessary to name all the people moving in - there only needs to be sufficient information about the person in question to whom the personal use relates.
If the tenant suspects that the notice of personal use is actually a tactic, they can take action against it under certain circumstances. For example, the Berlin Regional Court overturned a termination for personal use because a person close to the landlord had previously lived in a comparable apartment owned by the landlord and had only moved out in order to facilitate the sale of this apartment. The judges deemed the termination of the other apartment to enable the related party to move in to be an abuse of law (66 S 170/22).
If it turns out that a termination for personal use was fictitious, the tenant who moved out can demand compensation. This can include relocation costs, double rent payments and the difference between the old and new rent over several years (Coesfeld Local Court, 4 C 156/19).
If the landlord owns several apartments, he must also explain why exactly the apartment in question is needed for his own use. If he cannot explain this convincingly, the termination could be invalid under certain circumstances. If several apartments are suitable, the landlord can, for example, choose the one with the lowest rent. He is not obliged to make a social selection in advance (Landgericht Berlin, 64 S 91/18). Social criteria would only play a role in a possible hardship test.
In addition, there must be a specific need for personal use; purely precautionary terminations of personal use are not permitted. According to the Regional Court of Munich I, for example, eight months' notice would be too long (14 S 14047/22).
If the termination for personal use is likely to be effective, tenants only have one other way of defending themselves: they can invoke unreasonable hardship that cannot be justified by the landlord's interests. To do so, tenants must lodge an objection at least two months before the notice period expires.
In particular in cities with highly competitive rental markets, it is relevant to know that it is also considered undue hardship if the tenant cannot find suitable alternative accommodation on reasonable terms. However, the tenant must make serious efforts to find such replacement accommodation. Furthermore, especially in tight housing markets, the tenant should be prepared to make compromises, for example with regard to location, furnishings and rent (Schöneberg District Court, 105 C 191/22).
Health reasons can also lead to a case of hardship. In extreme cases, the landlord may even be obliged to continue the tenancy agreement indefinitely, for example if the tenant is considered to be at acute risk of suicide when forced to move out of the apartment (Federal Court of Justice, VIII ZR 390/21).
A financial solution can prevent a legal dispute
All this makes it clear to landlords: In many cases, the tenant who has been given notice to quit due to personal use will not leave the apartment voluntarily. In such situations, the landlord can take two approaches. The first option is to negotiate with the tenant. The landlord could offer the tenant financial incentives to move out. However, such a move-out premium is not tax-deductible, unlike, for example, a modernization of the apartment.
Alternatively, the landlord could offer the tenant an alternative apartment, if they have one. However, this assumes that the relationship between the tenant and landlord is intact.
If an amicable solution is not possible, the last option is to file an action for eviction. However, the landlord should be prepared for the fact that the apartment will not be evicted immediately if the tenant puts up legal resistance.
Before taking this route, the landlord should check whether the tenant may be able to successfully claim a case of hardship. This could be the case if the tenant is in poor health or frail due to age. Cases of hardship also include the social roots of a long-standing tenant in their environment or a change of school for their children.
Whether the case of hardship claimed by the tenant prevents a termination depends on the individual case. Tenants must prove the reason for hardship beyond doubt. This can sometimes be difficult, even in the case of health problems. For example, the Federal Court of Justice ruled in two cases in 2019 that an expert appointed by the court must review the tenants' medical certificates (VIII ZR 180/18, VIII ZR 167/17). This means that certificates alone cannot automatically prevent a termination for personal use.
Even if the tenant has prevented a termination for personal use, the landlord can still take measures. Last year, the Berlin Regional Court ruled that the landlord could only be expected to continue such a tenancy if he was allowed to raise the rent to a new letting level in line with the market (67 S 20/23). However, the increased rent must continue to be socially acceptable and remain affordable for the tenant.
If the landlord was successful with his termination for personal use, he can re-let the apartment after a reasonable period of use. However, the legal definition of a reasonable period of use is not specified. However, the landlord must be able to prove that he did not feign personal use. Otherwise, he would be liable to pay damages to the terminated tenant, as described above.
Source: WiWo online
