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Tenancy law: Colour selection clause in standard tenancy agreement invalid

Federal Court of Justice, 14.12.2010, Ref.: VIII ZR 198/10

No area of tenancy law is as controversial as the distribution of renovation obligations between tenant and landlord and the scope of these obligations.

In principle, it is the landlord's responsibility to keep the flat in a proper condition and to carry out the necessary cosmetic repairs. However, as this is regularly associated with high costs, landlords repeatedly try to pass this obligation on to the tenant.

This is also permissible in principle, but certain rules must be observed by the landlord.

In particular, pre-formulated tenancy agreements, which are provided to many landlords by their landlord associations, for example, often used to contain clauses that are considered to be unreasonably disadvantageous for the tenant in accordance with Section 307 BGB.

For example, the following clause was judged by the BGH to be a rigid deadline regulation and therefore invalid:

"In particular, the tenant is obliged to carry out the cosmetic repairs (...) in the rented rooms at his own expense, if necessary, but at least in the following time sequence. The time sequence is: for kitchen, bathroom and toilet - 2 years, for all other rooms - 5 years."

In its decisive judgement of 23 June 2004 (case reference: VIII ZR 361/03), the Federal Court of Justice ruled that the rigid deadline schedule would oblige the tenant to renovate in good time regardless of the actual need for renovation and that the clause was therefore invalid due to the breach of good faith it contained.

A further judgement of the BGH of 5 April 2006 (AZ.: VIII ZR 178/05) finally determined the scope of the invalidity of such clauses, in which the following clause was also judged by the BGH to be rigid and therefore invalid:

"During the rental period, the tenant must carry out the cosmetic repairs properly and professionally at his own expense, namely: in the kitchen, bathroom and WC every three years, in the other rooms every five years."

The difference to the clause mentioned above was that the obligation to renovate did not include the words "at the latest" or "at least".

Nevertheless, the BGH ruled that the clause could only be assumed to be valid if the renovation plan was clearly flexible with formulations such as "as a rule", "in general" or other phrases.

According to the case law of the BGH (BGH VIII ZR 152/05 and BGH VIII ZR 109/05), a reference to a rigid deadline regulation is also inadmissible in this respect:

"During the rental period, the tenant must carry out the cosmetic repairs properly and professionally at his own expense; reference is made to the usual periods in this respect (e.g. kitchen, bathrooms: 3 years, living rooms and bedrooms: 4 to 5 years, windows/doors/radiators: 6 years)."

However, it should be mentioned once again that this case law only concerns pre-formulated rental agreements, so that other regulations may well apply to individually negotiated agreements.

This means, for example, that an individually agreed final renovation agreement (e.g. in the handover protocol) can also be valid if an invalid deadline regulation was agreed in the associated pre-formulated rental agreement. (BGH judgement from 14.01.2009, ref.: VIII ZR 71/08).

Irrespective of the time limit schedule, the following clauses in pre-formulated tenancy agreements are also invalid in principle:

Wallpaper clauseThe tenant's obligation to remove all wallpaper when moving out is invalid according to BGH case law (VIII ZR 152/05, VIII ZR 109/05):

Specialist tradesman clauseObligation of the tenant to have all cosmetic repairs carried out by a specialised contractor is invalid according to BGH case law (BGH VII ZR 308/02).

In a new decision, the BGH has now dealt with a so-called "Colour selection clause" to deal with:

Case Facts

The underlying case concerned a provision in the rental agreement that obliged the tenant to return the rented flat in the colour "white" at the end of the rental period. During the rental period, the tenant was free to choose the colour of the walls and could design them according to his taste. The contractual restriction therefore only concerned the time of return.

2. Decision of the Federal Court of Justice (BGH)

The Federal Court of Justice (BGH) ruled that the clause obliging the tenant to return the flat in the wall colour "white" constitutes an unreasonable disadvantage for the tenant. This restriction curtails the tenant's freedom of choice in an inadmissible manner, as it is not justified by the landlord's legitimate interests.

Interests of the landlord

According to the BGH, the landlord's legitimate interest is to keep the flat in a neutral state of decoration that is attractive to a broad target group of potential new tenants. A neutral design facilitates re-letting as it meets the tastes of many prospective tenants. However, the BGH ruled that this interest does not mean that the tenant must necessarily be restricted to the colour "white".

Conclusion of the Ruling

The court emphasised that returning the flat in other subtle colours does not hinder a quick re-letting. A blanket stipulation of "white" was therefore superfluous and constituted an inadmissible restriction of the tenant's rights. The BGH thus declared the contractual clause invalid, as it unreasonably disadvantaged the tenant and did not correspond to the landlord's legitimate interests.

Source: Federal Court of Justice

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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