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Tenancy Law


Section 535 Contents and primary duties of the lease agreement

(1) A lease agreement imposes on the lessor a duty to grant the lessee use of the leased property for the lease period. The lessor must surrender the leased property to the lessee in a condition suitable for use in conformity with the contract and maintain it in this condition for the lease period. He must bear all costs to which the leased property is subject.

(2) The lessee is obliged to pay the lessor the agreed rent.

Section 145 Binding effect of an offer

Any person who offers to another to enter into a contract is bound by the offer, unless he has excluded being bound by it.

§ 305 BGB Incorporation of standard business terms into the contract

(1) (1) Standard business terms are all contract terms pre@formulated for more than two contracts which one party to the contract (the user) presents to the other party upon the entering into of the contract. It is irrelevant whether the provisions take the form of a physically separate part of a contract or are made part of the contractual document itself, what their volume is, what typeface or font is used for them and what form the contract takes. Contract terms do not become standard business terms to the extent that they have been negotiated in detail between the parties.

(2) Standard business terms only become a part of a contract if the user, when entering into the contract,

1. refers the other party to the contract to them explicitly or, where explicit reference, due to the way in which the contract is entered into, is possible only with disproportionate difficulty, by posting a clearly visible notice at the place where the contract is entered into, and

2. gives the other party to the contract, in an acceptable manner, which also takes into reasonable account any physical handicap of the other party to the contract that is discernible to the user, the opportunity to take notice of their contents, and if the other party to the contract agrees to their applying.

(3) The parties to the contract may, while complying with the requirements set out in subsection (2) above, agree in advance that specific standard business terms are to govern a specific type of legal transaction.

Tenant, subtenant, landlord

§ 540 BGB Permitting use by third parties

(1) Without the permission of the lessor, the lessee is not entitled to permit a third party to use the leased property, in particular not to sublet it. If the lessor refuses permission, then the lessee may terminate the lease for cause with the statutory notice period unless the person of the third party constitutes cause.

(2) If the lessee permits a third party to use the property, then he is responsible for the culpability in the use of the property attributable to that third party even if the lessor has given permission for this.

Matters of form

§ 550 BGB Form of the lease agreement

If a lease agreement for a longer period of time than one year is not entered into in written form, then it applies for an indefinite period of time. However, termination is only allowed at the earliest at the end of one year after use of the residential space has been permitted.


§ 551 BGB Restriction and investment of rent security deposits

(1) If the lessee must give the lessor a security deposit for the performance of his duties, then this security deposit, subject to subsection (3) sentence 4, may amount at most to three times the rent for one month, exclusive of the operating costs shown as a lump sum or as an advance payment.

(2) If security is to be provided in the form of a sum of money, then the lessee is entitled to pay in three equal monthly instalments. The first instalment is due upon commencement of the lease. The further instalments are due together with the immediately ensuing rent payments.

(3) The lessor must invest a sum of money transferred to him as a deposit with a banking institution at the usual rate of interest for savings deposits with withdrawal notice of three months. The parties to the contract may agree on another form of investment. In either case the investment must be made separately from the assets of the lessor and the lessee is entitled to the income. It accrues to the security deposit. For residential space in a student hostel or a hostel for young people, there is no duty for the lessor to pay interest on the security deposit.

(4) A deviating agreement to the disadvantage of the lessee is ineffective.


§ 536 BGB Rent reduction for material and legal defects

(1) If the leased property at the time of surrender to the lessee has a defect which removes its suitability for the contractually agreed use, or if such a defect arises during the lease period, then the lessee is exempted for the period when suitability is removed from paying the rent. For the period of time when suitability is reduced, he need only pay reasonably reduced rent. A trivial reduction of suitability is not taken into account.

(1a) A reduction of suitability will not be considered for the duration of three months insofar as this takes place because of a measure which serves the purpose of energy efficiency modernisation in accordance with section 555b no. 1.

(2) Subsection (1) sentences 1 and 2 also apply if a warranted characteristic is lacking or later ceases.

(3) If the lessee is fully or partially deprived by a third@party right of use of the leased property, then subsections (1) and (2) apply with the necessary modifications. (4) With regard to a lease for residential space, a deviating agreement to the disadvantage of the lessee is ineffective.

§ 539 BGB Reimbursement of other expenses and right of removal of the lessee

(1) The lessee may, under the provisions on agency without specific authorisation, demand reimbursement from the lessor for outlays on the leased property that the lessor need not compensate him for under section 536a (2).

(2) The lessee is entitled to remove an installation that he has provided the leased property with.

§ 242 BGB Performance in good faith

An obligor has a duty to perform according to the requirements of good faith, taking customary practice into consideration.


§ 536a BGB Claim of lessee for damages and reimbursement of expenses due to a defect

(1) If a defect within the meaning of section 536 exists when the lease agreement is entered into, or if such a defect arises subsequently due to a circumstance that the lessor is responsible for, or if the lessor is in default in remedying a defect, then the lessee may, notwithstanding the rights under section 536, demand damages.

(2) The lessee may remedy the defect himself and demand reimbursement of the necessary expenses if

1. the lessor is in default in remedying the defect, or

2. immediate remedy of the defect is necessary to preserve or restore the state of the leased property.


§ 543 Termination for cause without notice for a compelling reason

(1) Each party to the contract may terminate the lease for cause without notice for a compelling reason. A compelling reason is deemed to obtain if the party giving notice, with all circumstances of the individual case taken into account, including without limitation fault of the parties to the contract, and after weighing the interests of the parties, cannot be reasonably expected to continue the lease until the end of the notice period or until the lease ends in another way.

(2) A compelling reason is deemed to obtain in cases including without limitation where
1. the lessee is not permitted the use of the leased property in conformity with contract, in whole or in part, in good time, or is deprived of this use,
2. the lessee violates the rights of the lessor to a substantial degree by substantially endangering the leased property by neglecting to exercise the care incumbent upon him or by allowing a third party to use it without authorisation, or
3. the lessee
a) is in default, on two successive dates, of payment of the rent or of a portion of the rent that is not insignificant, or
b) in a period of time spanning more than two dates is in default of payment of the rent in an amount that is as much as the amount of rent for two months. In the case of sentence 1 no. 3, termination is excluded if the lessor has by then obtained satisfaction. It becomes ineffective if the lessee has succeeded in discharging his debt by set@off and declares set@off without undue delay after notice of termination is given.

(3) If the compelling reason consists in the violation of an obligation under the lease, then the notice of termination is only permitted after the expiry without result of a reasonable period specified for the purpose of obtaining relief or after an unheeded warning notice. This does not apply if
a notice period or a warning notice obviously shows no chance of succeeding, immediate termination for special reasons is justified, weighing the interests of both parties, or
the lessee is in default of payment of rent within the meaning of subsection (2) no. 3.


Sections 536b and 536d are to be applied with the necessary modifications to the right to notice of termination to which the lessee is entitled under subsection (2) no. 1. If it is in dispute whether the lessor granted use of the leased property in good time or provided relief prior to expiry of the period specified for this purpose, then he bears the burden of proof.

§ 536b BGB Lessee knows of the defect upon entering into the agreement or upon acceptance

If the lessee knows of the defect when entering into the agreement, then he does not have the rights under sections 536 and 536a. If he remains unaware of the defect due to gross negligence, then he has these rights only if the lessor fraudulently concealed the defect. If the lessee accepts a defective thing although he is aware of the defect, then he may only assert the rights under sections 536 and 536a if he reserved his rights at the time of acceptance.

§ 573 Notice of termination by the lessor

(1) The lessor may only give notice if he has a justified interest in the termination of the lease. Notice of termination for the purpose of increasing the rent is excluded.

(2) A justified interest of the lessor in the termination of the lease exists, without limitation, in cases where
1. the lessee has culpably and non@trivially violated his contractual duties,
2. the lessor needs the premises as a dwelling for himself, members of his family or members of his household, or
3. the lessor, by continuing the lease, would be prevented from making appropriate commercial use of the plot of land and would as a result suffer substantial disadvantages; the possibility of attaining a higher rent by leasing the residential space to others is disregarded; the lessor may likewise not invoke the fact that he wishes to dispose of the residential premises in connection with an intention to create apartment ownership, or in connection with a creation of apartment ownership that took place after use of the residential space was granted to the lessee.

(3) The reasons for a justified interest of the lessor must be indicated in the notice of termination. Other reasons are taken into account only to the extent that they arose subsequently.

(4) A deviating agreement to the disadvantage of the lessee is ineffective.