Termination of a residential tenancy agreement due to personal use (Eigenbedarf)
Unlike commercial tenancy law, the landlord of residential property always needs a reason for an ordinary termination. This can lead to a situation in which a residential tenant who behaves in accordance with the contract is practically non-terminable, unless the landlord can invoke the reason for termination of personal use. This reason for termination has therefore become of central importance in residential tenancy law.
The grounds for termination exist if the landlord needs the apartment for his or her own residential purposes or for the residential purposes of family members or other relatives. Predominant use for the landlord’s own professional purposes is also sufficient, since these are also protected by Article 12 of the German Constitution (freedom to pursue an occupation). For the explanation of the personal requirement it is to be sufficient, if the landlord indicates reasonable reasons for his wish and these reasons are comprehensible. However, since only a natural person (apartment owner) can register personal requirements, a legal person does not have the option of terminating the lease for personal reasons. It is also not permissible to have a cancellation of the contract in reserve for personal use; the personal use must be current. Finally, the landlord cannot claim personal use if, for example, he has expressly waived this cancellation option in the rental agreement.
The notice of termination must be issued by the landlord or a person on the landlord’s side. Representation is of course possible. However, if the termination is declared by an authorised representative, it is strongly recommended to enclose an original of the letter of termination, as the tenant can immediately reject the termination due to a lack of power of attorney, thus rendering the termination ineffective.
The notice of termination must also be received by the correct tenant. If there are several tenants, the notice of termination must be addressed to all tenants. This also applies if the tenants no longer live in the rented property but at different addresses. The landlord must prove that the property is required for their own use in order for the notice of termination to be effective.
The personal requirement must be described in the letter of termination in such a specific way that it can be individually understood. This is to enable the tenant to assess his chances of success in an action against the termination of the lease. The landlord’s interest in personal use must be weighed against the tenant’s interest in maintaining his personal sphere, which the rented apartment represents. The tenant can object to the landlord’s notice of termination due to personal need and successfully demand the continuation of the tenancy if the termination of the tenancy would mean hardship for him, his family or another member of his household that cannot be justified even after considering the legitimate interests of the landlord. Such hardship also exists if suitable alternative accommodation cannot be obtained on reasonable terms.
The tenant’s objection to the termination must be declared in writing, whereby the landlord can refuse to continue the tenancy if the tenant has not declared the objection at least two months before the end of the tenancy. However, the tenant can also declare the objection in the first oral hearing of the eviction dispute if the landlord has not informed the tenant in good time before the expiry of the objection period of the possibility of the objection, its form and the deadline. The objection does not initially have to be substantiated; the tenant only has to provide information about the reasons for the objection without delay at the landlord’s request. In addition, a tenancy can be tacitly extended if the tenant continues to use the rented property after the end of the rental period. This automatic process, which comes as a surprise to many tenants, can be interrupted if the landlord declares his contrary intention within two weeks and expressly objects to the continuation of the tenancy.
The burden of proof is distributed in such a way that the landlord must provide full proof of the personal need he claims to have. The tenant, on the other hand, can dispute the alleged personal need with non-knowledge. The rules of evidence can, under certain circumstances, lead to surprising results for the court.
In view of the increasing number of cases of allegedly abusive terminations due to personal need, considerable tightening of the burden of presentation and proof is being discussed. If the findings of the criminal proceedings are to be transferred to the assessment of the information provided by the respondents regarding their own needs, and if the information provided by the landlord or the named witnesses proves to be untrue in any numerical way, then the full proof of the alleged personal need is unlikely to be successful. This is because implausibility does not lead to full judicial conviction in the sense of the civil procedural rules.
It is also important not to lose sight of the fact that, in the event of a successful eviction lawsuit, the landlord can claim the rent that is customary for comparable properties in the area from the time the termination takes effect until the actual eviction. This is then the so-called new contract rent, which, especially in tight markets, can be significantly higher than the contract rent paid by the landlord. Claims for damages may also be considered if only partially rented flats cannot be fully rented as a result of the legal dispute, causing the landlord to lose rental income.