Between the termination of a lease and the return of the rental property by the tenant, a considerable amount of time can sometimes pass, especially if there are prolonged legal disputes between the tenant and landlord. However, once the lease agreement between the tenant and landlord is terminated, either through a termination notice or in the case of a fixed-term lease by the expiry of the lease period, the tenant is obligated to return the rental property. At this point, the tenant no longer has the right to use the property.
If the tenant is late in handing over the flat, compensation can be claimed. Such cases are frequent in practice and lead to considerable disadvantages for both parties.
However, it occasionally happens that the tenant does not fulfil this obligation to surrender the property in accordance with Section 546 (1) BGB and continues to use the rented property - for example, by simply not moving out of the flat. Once a tenancy has ended, the landlord can no longer legally demand rent. If the tenant does not vacate the flat on time, the landlord often incurs additional costs and delays. In such cases, however, the landlord is entitled to compensation for use in the amount of the agreed rent in accordance with Section 546a (1) of the German Civil Code (BGB) for the period during which the rented property is withheld.
Additionally, the landlord may also claim damages pursuant to Section 546a(2) BGB. The background to this provision is that the tenant should not be in a better position after the end of the lease than during the lease term. In this context, „compensation for use“ means nothing other than the rent that the tenant must continue to pay to the landlord.
The landlord, however, can demand compensation equal to the local customary rent for comparable premises instead of the previous rent. Therefore, the landlord can independently choose between the previously agreed rent and the local customary rent and does not need to justify this choice in the letter to the tenant (BGH ruling of July 14, 1999 – XII ZR 215/97). The regulations on rent levels set out in Sections 557 et seq. BGB do not apply here. The rent cap is also not relevant in such situations.
Requirements for Compensation for Use:
To claim compensation for use, the tenant must withhold the rental property from the landlord despite the effective termination of the lease. In simpler terms: despite the obligation to return the property, the tenant does not return the rental property to the landlord and intentionally acts against the landlord’s will (BGH ruling of January 7, 2004 – VIII ZR 103/03).
An example of such a case is when the tenant fails to completely vacate the rental property by leaving behind installations, fixtures, or alterations (OLG Brandenburg ruling of March 26, 1997 – 3 U 159/96). Another example is when the rental property is sublet by the main tenant, and the subtenant refuses to move out (BGH February 15, 1984 – VIII ZR 213/82). In such cases, it does not matter whether the tenant is at fault; even if the return is subjectively impossible due to the subtenant, it constitutes unlawful retention. Both examples only apply if the lease agreement between the landlord and (main) tenant has been successfully terminated.
Unlawful retention also occurs if the rental property is only partially returned or if the rental premises are returned without the keys (KG ruling of August 15, 2005 – 12 U 121/04).
When Is There No Unlawful Retention?
There is no unlawful retention if the tenant is prevented from returning the property due to objective impossibility—such as the complete destruction of the rental premises due to a fire. In such a case, the landlord may possibly claim damages against the tenant.
Additionally, there is no unlawful retention if the rental property is returned in a defective condition. A defective condition may exist, for example, if the tenant fails to carry out the obligatory or agreed cosmetic repairs on the rental property (OLG Düsseldorf ruling of March 27, 2003 – 10 U 64/02). In such cases, however, the landlord has separate claims against the former tenant.
Furthermore, there is no unlawful retention by the tenant if the rental property is returned unvacated because the landlord asserts a landlord’s lien (cf. Kammergericht Berlin, judgment of December 6, 2012, 8 U 220/12, para. 4).
Who Has the Burden of Proof?
The landlord has the burden of proof to demonstrate that the lease agreement was actually terminated (by termination notice or possibly by the expiration of the lease term). Otherwise, the landlord would not be entitled to claim compensation for use. Additionally, the landlord must prove the amount of the claimed compensation, i.e., the extent of the damage and the compensation for use. The landlord must be able to detail and prove that the current situation has caused them financial harm.
How Do Eviction Proceedings and Compensation for Use Work in Practice?
First, the landlord should obtain a court eviction order (judgment). In this order, the tenant is granted an eviction deadline in accordance with Section 721 of the German Code of Civil Procedure (ZPO). During this eviction period, there is no unlawful retention of the rental property within the meaning of Section 546a(1) BGB. This is because, legally, the lease is not properly terminated until the expiration of such an eviction period. During this phase, the tenant owes the landlord the agreed rent but not yet compensation for use. The right to compensation for use arises only after the expiration of the eviction period, if the tenant does not return the rental property to the landlord by the deadline. From this point on, the landlord has the right to claim compensation for use equivalent to the agreed rent or even the local customary rent for comparable premises. Therefore, the landlord has two methods for calculating compensation for use. To secure the right to future compensation for use in the event of a delayed return of the rental property after the eviction deadline, the landlord can include this claim at the same time as the eviction lawsuit and assert it accordingly (BGH November 20, 2002 – VIII ZB 66/02).
To summarise, there are considerable disadvantages for the tenant if they continue to use the rented property after the tenancy has ended. A lack of opportunity to rent a new flat does not excuse the delayed move-out or eviction. In such cases, the tenant must pay compensation for use in the amount of at least the previous rent. The obligation to pay compensation for rent applies to the tenant regardless of personal circumstances such as the lack of a replacement flat. In most cases, the landlord will demand the standard local rent for comparable rooms. In addition, the landlord may suffer damages if he is able to let the rented premises that have not been vacated at a higher rent. In such situations, the loss is calculated as the difference between the previous rent and the rent that could have been achieved if the property had been vacated in good time. What is important with compensation for loss of use is that the tenant is acting against the will of the landlord. Accordingly, for example, there is no loss of use pursuant to Section 546a (1) BGB if the tenant retains possession of the otherwise already vacated rental property in order to carry out defect rectification work at the landlord's request (see BGH, judgement of 13 July 2010, VIII ZR 326/09, para. 2). In such cases, the landlord's contributory negligence must always be taken into account in accordance with Section 254 BGB.
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 contribution has been created to the best of our knowledge and understanding. However, the complexity and constant changes of the subject matter require us to exclude liability and warranty.
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One Response
My son has slightly burnt the frame of a window that leads out to the garden with a lighter. There are other windows to the left and right of this window. I have already received a favourable offer from a window fitter to replace the broken window and the one next to it, as these two windows are in the same frame. However, the installer has rejected this offer. Instead, he wants to commission the manufacturer of the window, who only wants to replace all the windows (5 in total), although it would be possible to replace only one or at most two windows.
However, my liability insurance only pays for the damage to the broken window and not all the other windows that are still intact.
Can I sue the landlord if he demands excessive and unjust compensation, i.e. if he takes advantage of the insurance and can even commit insurance fraud?
And what happens if the landlord then threatens to give me notice because I take legal action against him?
Yours sincerely
Lena Guhl-Mwangala