Rent reduction and forfeiture are two key terms in residential tenancy law that landlords should be familiar with. Rent reduction means that a tenant with significant Housing defects may reduce the rent appropriately, for example if odour nuisance or defects reduce the quality of living. Forfeiture on the other hand, refers to the loss of rights due to the inaction of time and the creation of a situation of trust - in simple terms: if you do not assert your rights for too long, you may no longer be allowed to assert them. This is particularly relevant for landlords if rent arrears are tolerated over a long period of time. A current Judgement in tenancy law of the Wiesbaden Regional Court of 4 September 2024 (case no. 3 S 13/24) sheds light on these issues and provides important insights for landlords. In this article, we analyse the ruling, explain the background to rent reduction and forfeiture and give landlords practical tips on how to deal with rent reductions and avoid forfeiting their claims.
Case Facts
The case before the Wiesbaden Regional Court concerned a classic rent reduction dispute: A landlord (in this case a landlady) had given notice to his tenant and Court representation in landlord/tenant disputes because the tenant had withheld part of the rent for months. The tenant justified the refusal to pay with various reasons Defects in the rented flat and the house. Specifically, he asserted the following problems:
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Strong urine odour in the stairwell and in the flat: In the hallway and even in his flat there was an unbearable odour. Odour nuisance was perceptible due to urine. The tenant claimed that this odour came from a defective ventilation or sewage system or from the inner courtyard, whereby the contractual use of the flat was impaired. He described how it was sometimes only possible to cross the stairwell with his hand held out.
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Non-lockable front door: The Front door of the apartment block could not be closed or locked properly for a long time. A defective front door poses a security risk, as unauthorised persons can easily gain access to the building. The tenant considered this to be a significant defect that reduced his rent payment.
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Overfilled rubbish bins and rubbish problems: The property was constantly overflowing with Waste binswhich led to strong odours and hygiene problems. Rubbish was piling up and, according to the tenant, the odour penetrated into the courtyard and hallway. The tenant also saw this as a reason to reduce the rent.
The landlord strongly disputed these alleged defects. She pointed out that no other tenants in the house had expressed similar complaints. In particular, she doubted that there was a permanent urine odour and claimed that these were exaggerations or temporary conditions. She also argued that she had taken remedial action - for example, the front door had been repaired and if a defect occurred again, the tenant should have reported it.
To clarify the facts of the case, the Wiesbaden district court (first instance) took evidence, including an on-site visit and witness hearings. Following the decision at first instance, which largely ruled in favour of the landlord, the tenant lodged an appeal. Appeal to the Wiesbaden Regional Court. He argued that the local court had incorrectly assessed the defects and their impact. Among other things, he demanded a higher rent reduction - according to his calculation, a total of 28% less rent - and claimed that part of the rent receivables were forfeited (because the landlord had waited a long time before claiming the rent arrears). The appeal ultimately led to a ruling by the Wiesbaden Regional Court on 4 September 2024.
Court Decision
In its judgement of 4 September 2024, the Wiesbaden Regional Court confirmed the decision of the lower court and thus the Effectiveness of the cancellation and the landlord's claim for eviction. The tenant's appeal was rejected because, in the opinion of the judges, the conditions for a significant rent reduction had not been proven to the extent claimed by the tenant. In detail, the court stated:
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Odour nuisance not proven: A continuous, substantial Urine odour in the courtyard, stairwell or even in the tenant's flat. During the on-site visit, the judges even gained their own impression of the (odour) condition of the house and could not detect any penetrating urine smell. The witnesses named by the tenant also confirmed that there was no persistent odour in the stairwell. The court therefore recognised No reason for reduction due to odour nuisance - For this alleged defect there was therefore 0% Rent reduction.
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Defective front door as a defect with minor reduction: The regional court recognised that the temporary Lack of lockability of the front door constitutes a rental defect. Unlocked front doors can impair security, which in principle justifies a rent reduction. However, the judges considered a reduction rate of 5% of the rent for this defect. (Note: In the meantime, the landlord had arranged for the door to be repaired; the problem reappeared later. The court emphasised that the tenant should have informed the landlord of the recurring defect in the front door. immediately to be allowed to reduce further).
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Waste problem as a defect with minor reduction: The overfilled rubbish bins and the resulting odour and hygiene problems were deemed by the court to be a rental defect. For this, it set a rent reduction of 5% up to a maximum of 7% on. Apparently, the impairment caused by waste deposits was stronger at times (up to 7% reduction at peak times) and otherwise moderate (more like 5%).
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Rejected total reduction of 28%: The rent demanded by the tenant Total rent reduction of 28% - by adding up all deficiencies - was considered translated and Rejected. Even if there are several defects, this does not automatically lead to such a drastic reduction in the rent. As a result, the court considered a total reduction of around 10-12% (5% + 5-7% for the confirmed defects), significantly less than the tenant had demanded. Over time, this difference had led to considerable Rent arrears accumulated.
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No forfeiture of rent claims: An important point of the judgement concerns the Forfeiture of the rent payment claims. The tenant had argued that the landlord had accepted the outstanding amounts for a long time without consistently sending reminders or taking legal action, so that he could assume that these would no longer be claimed - in other words, that the claims had been forfeited. However, the regional court denied that the rent arrears had been forfeited. The reasoning: The landlady had, through her behaviour No basis for trust that she would waive the rent claims. In concrete terms, this means that although there were delays (the termination and action were only brought after several months of arrears had accumulated), there was no behaviour on the part of the landlord that the tenant could understand as tacit acquiescence or abandonment of the claim for payment. The landlord was therefore entitled to demand the outstanding rent despite the period of default and to base the termination on rent arrears.
In summary, the Wiesbaden Regional Court confirmed the Court representation in landlord/tenant disputes of the landlord. The tenant was given a final Eviction period to hand over the flat by 30 November 2024 in order to enable the tenant to move out in a socially acceptable manner. The tenant was ordered to pay the costs of the proceedings, as his appeal was unsuccessful. The judgement is provisionally enforceablewhich means that the landlord can proceed with the eviction even if the tenant is considering legal action.
Legal assessment from the landlord's perspective
The judgement of the Wiesbaden Regional Court offers landlords several important Guiding principles and learning effects in relation to rent reduction and forfeiture in residential tenancy law:
1. high requirements for rent reductions: The decision shows that courts tend to be cautious in assessing rent reductions and require the tenant to pay the rent. strict proof of the defects. In the present case, some defects (above all the alleged urine odour) could not be sufficiently proven - the principle of "Anyone claiming defects must prove them" has been consistently applied. Any doubts are borne by the tenant. This means for landlords: If a tenant claims reasons for a rent reduction, it is worth scrutinising these critically and requesting evidence. Courts only accept rent reductions if significant impairments the rented property and even then mostly in moderate height. The reduction quotas set in the judgement (only 5-7% for the defects identified) make it clear that even several simultaneous defects do not automatically justify a drastic reduction. This is reassuring for landlords: unjustified or excessive reduction claims by tenants have little chance of success in court as long as the landlord reacts appropriately.
2. tenant's obligations in the event of defects (obligation to report and co-operate): Another positive aspect from the landlord's point of view is the confirmation that tenants Duties if they claim defects. This includes in particular Notification of defects (§ 536c BGB) - the tenant must inform the landlord of defects immediately. In the case in question, the tenant was accused of failing to notify the landlord of the new defect after the front door had been repaired. not reported again has. As a result, he may have jeopardised his right to a rent reduction for this period himself. For landlords, this means that if you rectify a reported defect (or have it rectified) and the tenant later claims that the problem has returned, you can argue that the tenant did not report this. Tenants may not simply reduce the rent without giving the landlord the opportunity to rectify the situation. This obligation to co-operate and report serves to protect landlords against unexpected rent reductions and gives them the opportunity to rectify problems promptly.
3. forfeiture of claims - landlords should not remain inactive: The topic Forfeiture plays an important role in this judgement. Forfeiture is linked to two conditions: the Moment of time (a right is not asserted for a longer period of time) and the Moment of circumstance (the authorised party behaves in such a way that the obligated party can trust that it will no longer be collected). In tenancy law, for example, forfeiture can mean that a landlord can no longer collect rent arrears after tolerating them for a very long time because the tenant has become accustomed to them. Case law generally only recognises forfeiture of rent claims after many months - a period of around 8-9 months of inactivity is often considered sufficient for the time element. In this case, the tenant argued precisely this and referred to rent arrears from 2020/2021, which were allegedly forfeited due to long toleration. However, the Wiesbaden Regional Court denied the forfeiture, as No moment of circumstance The landlord waited for some time, but never signalled that she would waive the payments. The lesson for landlords is this: If tenants do not pay the full rent for months, landlords should not wait and see. Otherwise, you could run the risk of a court assuming a forfeiture at some point. It is important in the event of rent arrears to react promptly - e.g. through reminders, clear written reservations for instalments (i.e. informing the tenant that accepting an instalment is not a waiver of the remaining amount) and, if necessary, legal action such as termination or legal action. In this way, you do not create a basis of trust that the loss of rent will be tolerated. In the Wiesbaden judgement, the landlord had ultimately acted in time to prevent forfeiture despite the long duration. Nevertheless, the case shows that landlords are well advised, to consistently pursue their claimsso as not to come close to forfeiture in the first place.
4. consequences for landlords - act prudently: The judgement underlines the fact that excessive rent reductions on the part of the tenant are a Cancellation risk for the tenant represent. Conversely, this means for landlords: If a tenant has unjustifiably withheld a large part of the rent, you can give notice of termination (possibly without notice in accordance with Section 543 BGB if there are sufficient arrears) under the legal requirements. The courts will scrutinise whether the rent reduction was reasonable. In the Wiesbaden case, the difference between the permitted and actual rent reduction resulted in more than two months' rent in arrears - enough for termination without notice due to late payment. However, landlords should always proceed prudently: Firstly Dialogue with the tenant point out the possible lack of justification for the reduction and request subsequent payment. If the tenant refuses to comply and the arrears persist, it is advisable to go to a court. Lawyer for tenancy law advisable to carefully weigh up the next steps (cancellation, legal action). Also the Deadlines must be observed: An alternative ordinary termination can be useful if the termination without notice becomes ineffective, e.g. due to subsequent payment (keyword: grace period payment). The judgement shows that well-prepared landlord rights are valid in court - especially if landlords fulfil their obligations (rectification of defects upon notification) and actively pursue their rights (payment claims).
Practical tips for landlords
In view of this judgement, many landlords are asking themselves the question: What to do if the tenant reduces the rent? And How can you minimise the risk of forfeiture of claims? Here are some tried-and-tested tips for landlords:
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Take defects seriously and react quickly: If a tenant reports defects or reduces the rent, you should react immediately. Take every notification of defects seriously. Check the alleged defect on site and document the condition. If necessary, organise repairs or remedial action as quickly as possible. In this way, you show that you Landlord obligations and remove the basis for excessive rent reductions. You also reduce the time during which the tenant is entitled to pay less.
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Collect documentation and evidence: Lead Protocol about all complaints and measures. Have the tenant report any defects in writing. Create Photos, reports or witness records of the alleged defect - especially if you have the impression that the tenant is exaggerating. In an emergency (court proceedings), it helps landlords enormously to be able to present their own evidence to refute the tenant's claims. In the Wiesbaden case, for example, the landlady was able to point out that no one other than the tenant had confirmed the strong odour.
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Communication with tenants: Seek a dialogue. Politely but firmly point out to the tenant if you believe that a Rent reduction unjustified or too high fails. If necessary, explain the legal situation to him (e.g. that he must prove the defect and that you would call in an expert if in doubt). Sometimes an amicable agreement can be reached in this way or the tenant pays the withheld amounts as soon as he realises that the landlord has been informed and is prepared to defend himself.
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No silent tolerance of rent arrears: Do not become passive if the rent is reduced or not paid at all. Send reminders for overdue rent promptly. Accept instalments or reduced payments not without comment. It is best to confirm receipt of an instalment to the tenant in writing "without recognition of a legal obligation" and stating that the remaining rent amount remains owed. This will make it clear that you are not giving up your money. This clarification prevents the tenant from relying on Forfeiture as no basis of trust is created.
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Take legal action in good time: If the tenant does not pay the full rent over a longer period of time despite requests to do so, you Consequences. At the latest when two months' rent is in arrears, landlords should consider a Legal advice on tenancy bonds and rent increases think about it. Ideally, you should get Legal advice for landlords in order to avoid formal errors. A warning may be useful in advance, but is not mandatory in the event of late payment if the conditions for termination without notice in accordance with Section 543 BGB are met. A Court representation in landlord/tenant disputes requires good preparation - with legal support, you can ensure that all claims (outstanding rent, compensation for use, damages, etc.) are correctly quantified and enforced.
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Seek professional help: The matter is particularly complicated in complex cases with several defects or long periods of time. Lawyers for tenancy law are familiar with current case law and can assess which reduction rate is appropriate and how to respond strategically to rent reductions. They will help you to fully utilise your rights as a landlord - be it by drafting legally compliant correspondence with the tenant, calculating arrears or representing you in court. Don't be afraid to contact a Lawyer in tenancy law before the situation escalates.
By taking these tips to heart, landlords can significantly reduce the risks associated with rent reductions and possible legal disadvantages such as forfeiture. Every case is individual, but proactive and informed action pays off - in the truest sense of the word.