Hanau Local Court, 22/02/2019, Ref.: 32 C 167/18
Pursuant to Section 174 sentence 1 BGB, a unilateral legal transaction carried out by an authorised representative vis-à-vis another person is invalid if the authorised representative does not present a power of attorney and the other person immediately rejects the legal transaction for this reason.
This applies, for example, to notices of termination of tenancy, termination of employment, etc.
In the legal dispute discussed here, the question of whether the rejection of a rent increase letter in the absence of authorisation is also covered by Section 174 BGB was discussed.
Facts of the Case:
Tenant is asked by the landlord's administrator to agree to the rent increase without presenting the power of attorney
As the landlord, the plaintiff sought the defendant tenant's consent to a rent increase. There was a residential tenancy between the parties. In a letter dated 21 December 2017, the defendant was requested to approve a rent increase of EUR 58.00 from the previous net rent of EUR 335.50 to EUR 393.50 with reference to the rent index. The request for the increase was issued by the plaintiff's administrator, V. GmbH, on behalf of the plaintiff. A power of attorney was not enclosed with the rent increase letter.
A few days later, the tenant rejects the letter due to lack of authorisation - landlady sues tenant
In a letter from its lawyer dated 3 January 2018, the defendant rejected the request for a rent increase in accordance with Section 174 sentence 1 BGB due to the lack of a power of attorney. The plaintiff then sued the defendant for consent to the rent increase, arguing that the request for the rent increase pursuant to Section 558a BGB was not subject to the provisions of Section 174 BGB as it was not a unilateral legal transaction. In any case, the defendant had already been aware of V. GmbH's authorisation to represent the tenant, as it had previously received letters from the company.
The defendant, in turn, was of the opinion that the provision of Section 174 BGB should be applied accordingly to the request for a rent increase and counterclaimed for damages for the use of its legal representative on the basis of the request for a rent increase, which in its opinion was ineffective due to the lack of an original power of attorney.
Judgement of the Hanau Local Court:
Hanau Local Court followed the tenant's opinion
Hanau District Court has now ruled that both the claim and the counterclaim are unfounded. The plaintiff had no claim against the defendant for consent to the rent increase pursuant to Section 558 (1) and (2) BGB, as the request for a rent increase (Section 558a BGB) was ineffective due to the lack of an original authorisation pursuant to Section 174 (1) sentence 1 BGB and the defendant had also rejected it immediately for this reason.
Request for rent increase is ineffective due to lack of original power of attorney
According to the wording of the provision, Section 174 BGB applies to unilateral legal transactions. These are acts with legal consequences in which the other party is not involved and therefore has no influence on their effectiveness. For this reason, by enclosing the original power of attorney, he should obtain sufficient certainty as to whether or not the legal act carried out against him has the corresponding legal consequences (cf. inter alia BGH judgement of 18.12.2002 - VIII ZR 72/02; NZM 2003, 229 [231]; Schilken in Staudinger BGB Neubearbeitung 2014 Section 174 marginal no. 1; Schubert in Münchener Kommentar zum BGB 8th edition 2018 Section 174 marginal no. 1; Henssler/Michel NJW 2015, 11 [11]; Preis/Lukes JA 2015, 900 [901]).
Whether the regulation also applies to the rent increase request in accordance with Section 558a BGB is disputed. On the one hand, this is rejected, at least in direct application, because it is not a unilateral legal transaction, but (only) a contractual offer, but affirmed in corresponding application (see, among others, OLG Hamm legal decision of 28.5.1982 - 4 ReMiet 11/81; NJW 1982, 2076 [2076]; LG Berlin, judgement of 9.10.2006 - 67 S 196/06, BeckRS 2007, 2697, GE 2007, 152; Börstinghaus in Schmidt-Futterer, Mietrecht, 13th ed. 2017, Vorb. vor § 558 BGB Rn. 44; Emmerich in Staudinger BGB Neubearbeitung 2018 § 558a Rn. 3; Schäfer in Beck'scher Online-Kommentar BGB; Hrsg: Bamberger/Roth/Hau/Poseck, 48th ed. 1 November 2018, BGB § 174 Rn. 2).
In some cases, Section 174 BGB is applied directly to the request for a rent increase (Elzer in Prütting/Wegen/Weinreich 13th ed. 2018 Section 558a marginal no. 5; Lützenkirchen in Lützenkirchen Mietrecht-Kommentar 2nd ed. 2015, Section 558a marginal no. 20; Scheff in Klein-Blenkers/Heinemann/Ring Miete WEG Nachbarschaft 1st ed. 2016 Section 558a marginal no. 7; probably also Theesfeld in BeckOK Mietrecht/Schultz. 20; Scheff in Klein-Blenkers/Heinemann/Ring Miete WEG Nachbarschaft, 1st ed. 2016 Section 558a marginal no. 7; probably also Theesfeld in BeckOK Mietrecht, Schach/Schultz/Schüller 14th edition as of 1 December 2018 Section 558a marginal no. 16; Preis/Lukes JA 2015, 900 [902]).
§ Section 174 BGB is either directly or at least analogously applicable to the rent increase request
The BGH had obviously decided against a direct application of Section 174 BGB, since, without discussing this in more detail, it had in any case left aside a corresponding application of the standard for lack of relevance to the decision (BGH, judgement of 18 December 2002 - VIII ZR 72/02, NZM 2003, 229 [231]), as well as a corresponding application of Sections 180, 182 (3), 111 BGB (BGH, judgement of 19 March 2014 - VIII ZR 203/13, NZM 2014, 385 [386]).
In the opinion of the court, the provision of Section 174 BGB is directly applicable to the rent increase request pursuant to Section 558a BGB, or at least by analogy.
The fact that the request for a rent increase is initially (also) a contractual offer within the meaning of Section 145 BGB, which the tenant accepts by giving consent in accordance with Section 147 BGB and thereby brings about the contractual amendment (see, among others, Artz in Münchener Kommentar zum BGB 7th ed. 2016 Section 558a para. 5; Börstinghaus in Blank/Börstinghaus, Miete 5th edition 2017 Section 558a para. 2; Sternel, Mietrecht aktuell, 4th edition 2009, IV para. 78; Zehelein NZM 2015, 31 [38]), would not preclude the simultaneous assessment as a unilateral legal transaction (requiring receipt).
This is because the receipt of a request for an increase that fulfils the formal requirements of Section 558a BGB also triggers the legal consequences of Section 558b BGB, namely, on the one hand, the expiry of the approval period and, subsequently, the possibility of legal action (Section 558b (2) sentence 1 BGB). These consequences would occur "automatically" (Börstinghaus in Blank/Börstinghaus, Miete 5. Auflage 2017 § 558a Rn. 1; see also Artz in Münchener Kommentar zum BGB 7. Aufl. 2016 § 558b Rn. 11) by law, regardless of whether the letter was (also) a contractual offer (on the question of the validity of the contractual offer in the event of formal defects, see Artz in Münchener Kommentar zum BGB 7. Aufl. 2016 § 557 Rn. 40).
In addition, the landlord's request for consent already establishes the extraordinary right of termination under Section 561 BGB, according to the prevailing opinion, even if the letter of increase is not effective (LG Berlin judgement of 20.6.1997 - 64 S 527/96, BeckRS 1997, 30995086, GE 1998, 43; LG Braunschweig, judgement of 29.1.1985 - 6 S 224/84, WuM 1986, 323 - on Section 9 MHG; Artz in Münchener Kommentar zum BGB 7th ed. 2016 Section 561 marginal no. 4 with reference to the explanatory memorandum to the 2001 tenancy law reform BR-Drs. 14/4553 p. 59; Böringhaus in Bl. 59; Börstinghaus in Blank/Börstinghaus, Miete 5th edition 2017 § 561 marginal no. 4; restrictive in the case of obvious ineffectiveness: AG Münsingen, judgement of 30 July 1997 - 2 C 243/97, NJW-RR 1998, 228).
The very emergence of the right of termination pursuant to Section 561 BGB and the associated requirement of sufficient certainty for the tenant as to whether he is entitled to such a right on the one hand and whether he should exercise it on the other because he is threatened with a rent increase, requires the application of Section 174 BGB. It should be noted that the standard is not limited to legal transactions that are detrimental to the opposing party, i.e. the reverse of the disposition under Section 182 BGB, which alone requires a legal impairment of the person making the disposition. This is not apparent either from the wording or the purpose of the law, especially as unilateral legal transactions can be dispositions, but do not have to be (Bub in Beck'scher Online-Kommentar BGB; ed: Bamberger/Roth/Hau/Poseck, 48th ed. 1 November 2018, BGB Section 185 marginal no. 2 with further references). In fact, the motion to restrict Section 122 BGB aF (now Section 174 BGB) only to onerous legal transactions was not adopted in the legislative process (Motion No. 3 "...onerous declaration of intent...", see Mugdan, Die gesamten Materialien zum Bürgerlichen Gesetzbuch für das Deutsche Reich, Volume I on Section 122 p. 748). Accordingly, according to the explanatory memorandum to the law, the provision was intended to prevent the opponent of the declaration ("party involved") "having no certainty as to whether the legal transaction was made by a genuine authorised representative and the represented party having to accept it against or for himself" (Mugdan, Die gesamten Materialien zum Bürgerlichen Gesetzbuch für das Deutsche Reich, Volume I § 122 p. 485). The only decisive factor is whether the opponent of the declaration, in this case the tenant, can form a sufficient picture of whether and what change in his legal position is associated with this on the basis of the declaration received by him from a representative of the landlord who is materially authorised to make the declaration. The existence of a right of extraordinary termination is included here, as is the threat of a rent increase, which could be the motivation for exercising it.
The legal consequences of Section 558b (2) BGB lead to categorisation as a unilateral legal transaction
However, the legal consequences of Section 558b (2) BGB, i.e. the start of the approval period and, in particular, the possibility of legal action linked to its expiry, also led to the request for an increase in rent pursuant to Section 558a BGB being categorised as a unilateral legal transaction.
Upon receipt of the formally effective request for a rent increase, the landlord is given the opportunity, albeit subject to a time delay, to take legal action against the tenant. This only becomes admissible as a special procedural requirement (Artz in Münchener Kommentar zum BGB 7th ed. 2016 Section 558b marginal no. 11; Börstinghaus Schmidt-Futterer Mietrecht, 13th ed. 2017, Section 558b marginal no. 84 in each case with further references). Thus, the request for a rent increase results in a change of law on both sides due to the possible establishment of a legal relationship after the expiry of the deadline. The tenant must also have sufficient certainty about this, namely from receipt of the letter, in order to be able to base his further behaviour on this. Furthermore, neither the wording nor the purpose of Section 174 of the German Civil Code (BGB) imposes a restriction to the effect that the consequences of the legal transaction must take effect immediately. Rather, this would also include legal changes occurring in the foreseeable future, as long as these are only conditional on the effectiveness of the letter and are also certain.
The application of Section 174 BGB would also not be precluded in the present case by the fact that the request for a rent increase is sometimes described as a transaction-like act and therefore a corresponding application of the standard would be necessary (see above references). This is because, unlike the reminder pursuant to section 286 BGB, which itself does not constitute a declaration of intent but only an "expression of intent" and is therefore classified as similar to a transaction pursuant to section 174 BGB (BGH NJW 1976, 1800, [1802]; however, this was viewed differently in the legislative process because the wording of the law expressly naming the reminder pursuant to motion no. 2 was not adopted precisely because an enumeration would make the scope of application of Section 122 BGB aF too narrow, Mugdan, Die gesamten Materialien zum Bürgerlichen Gesetzbuch für das Deutsche Reich, Volume I on Section 122 p. 747/748, which is why it is also mentioned as an example in the explanatory memorandum to the law, ibid. 485), the request for a rent increase already constitutes a declaration of intent and thus a valid legal transaction within the meaning of Section 174 BGB due to its status as a contractual offer within the meaning of Section 145 BGB. Whether this declaration would now have to be split up, i.e. with regard to its contractual character as an offer in accordance with Section 145 BGB as a legal transaction and with regard to its character as a declaration of intent and thus a transaction-like act aimed at the occurrence of the legal consequences of Sections 558b (2), 561 BGB, could be left open. In any case, the relevant transaction-like part of the request for an increase would be so closely linked to the legal transaction character due to the legal consequences described and the interests to be protected on the tenant's side that an analogous application of Section 174 BGB would then be required.
The situation would only be different if it were not the landlord's representative acting on his behalf, but the purchaser of the property before entering into the tenancy in accordance with Section 566 BGB on the basis of an authorisation from the seller and (still) landlord in his own name (on admissibility: BGH, judgement of 19.3.2014 - VIII ZR 203/13, NZM 2014, 385). This is because the BGH assumes here (unconvincingly, see Zehelein NZM 2015, 31 [32 ff]; also Bayreuther in Münchener Kommentar zum BGB 8th ed. 2018 Section 185 marginal no. 7) that the request for a rent increase falls under the concept of disposition in Section 185 BGB and does not apply the regulations on representation to this. However, this is not the case here.
The tenant had also not been informed of the power of representation in advance
The defendant had also not been informed in advance of the power of representation of V. GmbH (Section 174 sentence 2 BGB). If the plaintiff argues in this respect that the latter had already sent several letters to the defendant, this overlooks the fact that, according to the statutory provision, the recipient of the declaration must be informed by the represented party, i.e. the principal, and not by the representative. However, the plaintiff itself only submits that V. GmbH has already drafted letters for the plaintiff and sent them to the defendant (written submissions of 3 August 2018, p. 39 of the file and of 24 September 2018, p. 66 of the file). The letters contained in the attached annexes also all originated from V. GmbH, which could not justify the notification pursuant to Section 174 sentence 2 BGB.
The letter of 23 January 2018 (Annex K1, p. 41 of the file) subsequently submitted to the defendant's authorised representative) subsequently submitted to the defendant's authorised representative with reference to the previous rejection could no longer establish or approve the effectiveness of the legal transaction that remained ineffective due to the rejection; there was no case of pending ineffectiveness (Schäfer in Beck'scher Online-Kommentar BGB; ed: Bamberger/Roth/Hau/Poseck, 48th ed. 1.11.2018, BGB Section 174 marginal no. 10 with further references).
There were no indications that the defendant could not invoke invalidity due to breach of trust (see Schubert in Münchener Kommentar zum BGB 8th ed. 2018 Section 174 para. 31 with further references). The plaintiff had not argued that the defendant had previously recognised the power of representation of V. GmbH in the context of other acts relating to the tenancy. Even the payment of the additional claims from previous operating cost statements or, in the present case, the acceptance of the credit note from the credit balances from the statements submitted would not be sufficient for this, as these actions are not generally of any legal explanatory value (BGH, judgement of 12 January 2011 - VIII Z. 1. 12. 1. 2011 - VIII ZR 296/09; NZM 2011, 843 [843/844]; BGH, judgement v. 9 JULY 2014 - VIII ZR 36/14; NZM 2014, 748). If this does not apply to the correctness of the settlement, an acknowledgement of the power of representation for unilateral legal transactions within the meaning of Section 174 BGB can certainly not be assumed.
Source: Hanau Local Court
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