Last updated: March 2026 | Legal basis: Section 573 (2) No. 3 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. This article is intended as a general guide and does not replace individual legal advice. Whether a realisation notice is effective in your specific case depends on the details. Seek advice from a specialist lawyer before you act.
Your landlord wants to renovate the building and has therefore given you notice. Or you are a landlord planning a major renovation and are wondering whether you are allowed to give your tenants notice. In both cases, it is a question of what is known as termination for use in accordance with Section 573 (2) No. 3 BGB - one of the most controversial forms of termination in tenancy law.
This issue is sensitive for both sides. Tenants may lose their home. Landlords are faced with the question of whether their plans can even overcome the high legal hurdles. This article explains when such a cancellation is effective, when it is not - and what rights both sides are entitled to.
What is a realisation notice?
A realisation termination is a ordinary cancellation of the residential tenancy agreement by the landlord. It applies if the landlord is unable to fulfil an appropriate tenancy agreement due to the existing tenancy. economic utilisation of his property and suffers considerable disadvantages as a result (Section 573 (2) No. 3 BGB).
Put simply: The landlord may terminate the lease if he intends to do something commercially viable with the property - such as a sale, fundamental renovation, remodelling or demolition with new construction - and the existing tenancy prevents this plan. That sounds broad at first. However, courts actually interpret the conditions very narrowly in order to prevent property speculation.
Four requirements must be met simultaneously
A notice of cancellation is only effective if all four conditions are met cumulatively. If only one is missing, the cancellation is invalid:
- Intention to utilise elsewhere. The landlord must have a concrete intention to utilise the property in a different way - for example by selling it, renovating the core, demolishing it with a new building or repurposing it for commercial purposes. Mere considerations are not sufficient. The intention must be demonstrable, e.g. through building plans, estate agent contracts or building specifications.
- The realisation is appropriate. Reasonable means: based on reasonable, comprehensible economic considerations - not purely speculative (BGH, judgement of 28 January 2009, case no. VIII ZR 8/08). Courts examine the overall circumstances here: motive for utilisation, purpose of utilisation and proportionality.
- The tenancy prevents realisation. The existing tenancy agreement must actually prevent the planned utilisation. In the case of refurbishment measures, this is only the case if the work cannot technically be carried out while the tenancy is still in force - for example, because the flat will be removed as part of the refurbishment or the Refurbishment of the flat uninhabitable.
- The landlord suffers considerable disadvantages. Not every disadvantage is sufficient - it must be significant. In the case of a planned sale, courts are guided by the difference in value between the rented and unrented property. Dachau District Court has used a threshold value of 15-20 % as the materiality limit.
Cancellation due to renovation: What landlords need to know
This is the most common misunderstanding: refurbishment or modernisation alone does not entitle the tenant to terminate the lease. This is because maintenance and modernisation are part of the landlord's obligations (Sections 555a-555f BGB), and tenants must tolerate such measures in many cases.
One Realisation termination due to restructuring can only be considered if:
- the flat is not habitable during the work and the refurbishment is so extensive that it goes beyond normal modernisation (core refurbishment, fundamental conversion)
- the previous flat is removed as a result of the conversion - for example because several small flats are combined to form larger ones (see LG Hannover, 29.01.2014, Ref. 4 S 98/13)
- temporary accommodation of the tenant during the work is not possible or not reasonable (LG Lübeck, 26.06.2024, Ref. 14 S 38/24)
- the landlord was not responsible for the renovation backlog by neglecting his maintenance obligations for years (LG Frankfurt, 14 February 1995, ref. 2-11 S 365/94)
Important: The mere intention to achieve a higher rent after refurbishment is not a recognised reason for termination. Termination for the purpose of increasing rent is expressly excluded under Section 573 (1) sentence 2 BGB.
When is the cancellation effective - when is it not?
The following overview shows typical constellations that have been decided by the courts:
| Situation | Cancellation effective? | Reason / Reference |
| Flat no longer available due to conversion; tenant offered alternative accommodation | Yes | Regional Court Frankfurt/Main, 17 January 2011, Ref. 2-11 S 7/11 |
| Building from the 1930s, dilapidated structure, demolition and new construction planned | Yes | BGH, 09.02.2011, Ref. VIII ZR 155/10 |
| Sale in rented condition leads to over 20 % reduction in value | Yes | AG Dachau (threshold value 15-20 %) |
| Landlord has neglected maintenance obligations for years and is now citing a need for renovation | No | Regional Court Frankfurt/Main, 14 February 1995, Ref. 2-11 S 365/94 |
| Work only requires leaving the home temporarily, no permanent absence | No | LG Koblenz, WuM 1990, 211; LG Lübeck, 26.06.2024, 14 S 38/24 |
| Demolition without new construction | No | BGH, 24 March 2004, Ref. VIII ZR 188/03 |
| Cancellation is only aimed at higher rent after renovation | No | § Section 573 (1) sentence 2 BGB (statutory prohibition) |
Practical example: Regional Court Frankfurt am Main, 17 January 2011 (Ref. 2-11 S 7/11)
A specific example from the case law shows how courts weigh up the options when cancelling a sale.
The facts of the case
The landlord owned a flat that had not been renovated for more than 20 years. The other rooms on the floor had already been remodelled. Another tenant on the same floor planned to take over the defendant's flat after renovation at a significantly higher rent. The previous tenant could no longer afford the future rent after refurbishment.
After the tenant did not vacate the flat following the notice of termination, the landlord sued for possession. He had previously offered the tenant 13 replacement flats in the same building or in the immediate vicinity as well as a lump sum of 1,000 euros for moving costs.
The decision
The Regional Court of Frankfurt am Main upheld the decision of the court of first instance and granted the Court representation in landlord/tenant disputes in favour. The court justified this as follows:
- The landlord had a legitimate interest in an appropriate economic utilisation in accordance with Section 573 (2) No. 3 BGB because the complete renovation of the floor was not possible without the tenant moving out.
- Due to the existing tenancy, the landlord was prevented from realising the property and suffered considerable economic disadvantages as a result.
- There was no abuse of rights because the tenant 13 Replacement flats and a relocation allowance had been offered.
This case shows: If a comprehensive refurbishment actually makes the flat obsolete, replacement offers are made and the economic necessity is proven, the cancellation of the sale can stand up in court.
What can tenants do? Your rights in the event of a realisation notice
If you as a tenant receive a notice to quit, you are not defenceless. The law gives you several options:
1. check cancellation for effectiveness
Check whether all four requirements are actually met. The letter of termination must state the specific reasons (Section 573 (3) BGB). If the reasons are missing or are only stated in general terms, the termination is formally invalid. The BGH confirmed in 2023 that the statement of reasons is a prerequisite for effectiveness and must provide the tenant with clarity about their legal position (BGH, 25.10.2023, Ref. VIII ZR 147/22).
2. hardship objection according to § 574 BGB
Even if the cancellation is effective, you can object to it if the move is a disadvantage for you or your family. Unreasonable hardship would represent. Typical reasons for hardship are: old age, illness, pregnancy, school-age children, being rooted in the social environment or simply the lack of suitable alternative accommodation. The objection must be received by the landlord in writing at least two months before the end of the notice period (Section 574b BGB).
3. observe notice periods
The notice periods depend on the rental period and are regulated in Section 573c BGB:
| Rental period | Cancellation period of the landlord |
| Up to 5 years | 3 months |
| 5 to 8 years | 6 months |
| Over 8 years | 9 months |
The longer the tenancy exists, the longer the notice period - and the more strictly the courts scrutinise the legality of the termination.
Common mistakes in realisation notices
In practice, realisation terminations often fail due to errors that could have been avoided. The following are particularly common:
- Insufficient justification in the letter of cancellation. General references to „necessary refurbishment“ are not sufficient. The landlord must explain specifically why the existing building fabric is not worth preserving and what measures he is planning.
- Self-inflicted refurbishment backlog. Anyone who neglects their maintenance obligations for years cannot invoke the resulting need for renovation to justify a cancellation.
- No offer of replacement living space. Courts consider it a significant point in favour of the landlord if he offers alternative accommodation - and against him if he fails to do so.
- Confusion between modernisation and termination for use. Measures that the tenant must tolerate according to §§ 555a-555f BGB (e.g. window replacement, heating renewal) do not justify termination. Only if the measures are so far-reaching that the flat is no longer available or becomes uninhabitable is a cancellation of the lease possible.
- Lack of verification of temporary eviction. Recent case law requires landlords to check whether the tenant can be temporarily accommodated for the duration of the work before giving notice (LG Lübeck, 26.06.2024, Ref. 14 S 38/24).
Current developments in case law
The legal situation relating to the cancellation of a sale is constantly evolving. Three recent decisions are particularly relevant:
BGH, 25 October 2023 (Ref. VIII ZR 147/22): The BGH has specified the formal requirements for the letter of cancellation. The statement of reasons is a prerequisite for effectiveness. Subsequent grounds for termination cannot „cure“ a termination that was invalid from the outset.
LG Lübeck, 26 June 2024 (Ref. 14 S 38/24): In the case of refurbishment and modernisation measures, it must be checked whether temporary accommodation of the tenant can be considered as a milder measure before a termination is issued.
BGH, 24.09.2025 (Ref. VIII ZR 289/23): The BGH has clarified that a termination for personal use does not become a termination for sale simply because the landlord is simultaneously pursuing conversion or sale intentions. The decisive factor remains whether the landlord's intention to utilise the property for his own use is serious and comprehensible.
What should you do now?
As a tenant: Don't react too quickly, but don't react too late either. Check the letter of cancellation carefully - or have it checked. If there are reasons for hardship, object in good time. The hardship objection in accordance with Section 574 BGB is the most important instrument for tenants in this situation.
As a landlord: Prepare the cancellation thoroughly. An inadequately justified notice of termination will fail in court. Document the economic necessity, offer alternative living space and check whether a temporary eviction can be considered as a milder measure.
Termination for use is caught between the landlord's right of ownership (Art. 14 GG) and the tenant's constitutionally protected right of possession. Courts take this balancing very seriously. Anyone - regardless of which side - who acts without consulting a lawyer risks considerable disadvantages.
If you have received or would like to give notice of cancellation, lawyer Tieben in Cologne will advise you personally. Give us a call at 0221 - 80187670 or write to info@mth-partner.de.
Legal notice: The content of this article has been compiled to the best of our knowledge. However, the complexity and constant changes in the legal situation make it necessary to exclude liability and warranty. This article does not replace individual legal advice.
Lawyers in Cologne provide advice and representation in tenancy law.
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I have to move out because I want to renovate the house and get the notice to quit