Higher Regional Court of Frankfurt am Main, 13 December 2013, Ref.: 2 U 222/12
The landlord must provide the tenant with the rented property in a condition suitable for use in accordance with the contract, i.e. free from material and legal defects. If a reduction in the suitability of the rented property occurs as a result of a defect, only an appropriately reduced rent shall be payable.
The reduction occurs without the tenant having to invoke it. The amount of the reduction then depends on the individual case and is based on the ratio of the contractual use to the possibilities of actual use. There are numerous court rulings on determining the amount of the reduction, which can serve as an initial guide.
In the above-mentioned judgement, the Higher Regional Court of Frankfurt am Main had to decide, among other things, on the appropriate amount of the rent reduction as part of the appeal.
Facts of the Case The plaintiff was the landlord of a plot of land that it had previously acquired from the defendant on the condition that the riding centre in question would be built on it and subsequently rented to the defendant. A dispute subsequently arose over the defectiveness of the facility.
In their lawsuit, the plaintiffs demanded payment of rent arrears from the defendant for the equestrian centre A as well as the costs of maintaining the outdoor facilities of the property and out-of-court costs. The defendant sought reimbursement of the overpaid rent, payment of the costs of remedying defects and a declaration of the existence of warranty rights due to the condition of the leased property.
The regional court initially appealed to dismissed the claim as unfounded. The defendant was only obliged to pay the agreed rent from the date of completion. In the period from November 2006 to April 2007, the rent was reduced by 25 % due to significant defects in the rental property. For the period from January to March inclusive, a reduction of 60 % was appropriate as a result of the defects. The counterclaim was justified. The plaintiffs continued to pursue their claim on appeal to the Higher Regional Court of Frankfurt am Main.
Higher Regional Court Frankfurt am Main: The Frankfurt Higher Regional Court ruled in favour of the plaintiffs, at least in part.
In the opinion of the court, the plaintiffs were no longer entitled to further rent payments from the defendant for the period from January 2005 up to and including September 2007.
For the years 2009 to 2012, however, the plaintiffs could demand further rent payments of € 11,237.48 from the defendants. The claims from 2008 were time-barred. Contrary to the opinion of the regional court, the rent owed under the rental agreement in the period from 1 January 2009 to 30 November 2011 was not to be reduced by 60 %, but only by 40 %. From 1 December 2011, the rent was reduced by only % 30 due to the rectification of the defects relating to the floor drainage of the indoor riding arena.
The rental property has significant defects in the jumping arena, dressage arena and indoor riding arena. The dressage arena had different thicknesses of footing, so that stones from the base and separation layers could shift to the surface under load. There were defects in the riding arena in the form of structural defects in the roof of the arena and its floor drainage. The floor of the jumping arena contains foreign bodies that could lead to significant injuries to the horses.
The elimination of these defects was the responsibility of the plaintiffs. According to the rental agreement, the defendant is obliged to repair and maintain the rented property to the extent that these measures are caused by the use of the rented property.
However, damage to the roof of the riding hall was not caused by the rental use. Even if the defendant, as the former owner of the facility, had sold the riding hall to the plaintiffs in the condition known to him, the material risk had been transferred to the buyers with the purchase.
The defects mentioned were to be valued at a total of 40 % for the period from January 2009 to 30 November 2011. The extent of the impairment of the usability of the rental property in relation to the contractual use as a whole is decisive for the assessment of the reduction. The stables, the other buildings and the outdoor facilities, with the exception of the riding arenas, could be used without impairment. The jumping arena was not usable. The dressage arena was basically usable, but its use was impaired by the unevenness of the ground.
Depending on the weather conditions, the indoor riding arena can only be used to a limited extent. This is aggravated by the fact that the indoor riding arena needs to be used when it is raining, but the impairment due to water ingress occurs precisely because of the rain.
The impairments were to be assessed in their entirety. In this context, particular consideration should be given to the fact that the defendant had rented the riding centre precisely for the purpose of boarding horses. The condition of the facility as a whole is decisive for the attractiveness of a riding centre for customers. The condition of the riding arenas, the indoor riding arena and, if applicable, the jumping arena are of decisive importance.
Even the best riding centre is unattractive for riders if it does not offer sufficiently available arenas and, in particular, an indoor riding arena that is functional in the rain. For this reason, the deficiencies in the jumping arena, the indoor riding arena and the dressage arena, which may be considered minor in themselves, are to be classified as more serious in their entirety. They would result in a considerably lower utilisation value of the riding facility as a whole.
From 1 December 2011, the use of the indoor riding arena was only impaired due to the water ingress caused by the leaking roof, while the floor drainage defects had been rectified.
A reduction was not excluded by the rental agreement, as these claims related solely to warranty rights resulting from the construction of the building projects or from these themselves.
Contrary to the opinion of the court of first instance, the counterclaim regarding the overpaid rent was only partially justified. The defendant could invoke the reduction that had occurred.
The payments made by the defendant with knowledge of the defects do not contradict this. This is because he had declared a sufficiently clear and therefore effective reservation in each of his rent payments made by bank transfer.
Source: OLG Frankfurt am Main
Important Note: The content of this article has been prepared to the best of our knowledge and belief. However, due to the complexity and constant evolution of the subject matter, we must exclude liability and warranty. Important Notice: The content of this article has been created to the best of our knowledge and understanding. However, due to the complexity and constant changes in the subject matter, we must exclude any liability and warranty.
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