A rent increase declaration does not require a breakdown according to trades, as the VIII. Civil Senate of the Federal Court of Justice in Karlsruhe decided in its judgement of 20.07.2022 – VIII ZR 337/21; VIII ZR 339/21; VIII ZR 361/21.
Facts of the case
The landlord of several rental flats in Bremen increased the monthly rent to be paid for the rental flats concerned as a result of modernisation measures. He sent a rent increase letter to the tenants of the affected flats, to which a cost summary and calculation of the rent increase was attached. In this cost summary, the total modernisation costs, the individual modernisation measures, the apportionable modernisation cost share and the resulting rent increase were broken down. Three plaintiffs of rented flats in Bremen then sued, as they considered the rent increase to be invalid for formal reasons. They also demanded repayment of the already overpaid rent.
FORMAL REQUIREMENTS FOR A RENT INCREASE DECLARATION
As a general rule, rent increases are subject to formal requirements, such as compliance with the text form, an explanation, as well as a statement of cost accounting. The purpose of this is to distinguish between modernisation measures that can be apportioned according to § 555b BGB and maintenance measures that cannot be apportioned according to § 555a BGB. In addition, the tenant is to be granted the possibility of being able to check on a qualified basis whether a claim by the landlord is justified.
This also leads to the tenant being able to understand the rent increase and provides the tenant with a basis for further control if necessary. However, problems can arise here, as it has not been conclusively clarified to what extent the modernisation measures must be itemised and how high the hurdles must be for such a rent increase.
DECISION OF THE FEDERAL SUPREME COURT
The Court of Appeal upheld the tenants’ claims on the grounds that, in the case of comprehensive modernisation measures covering several buildings or carried out outside the tenant’s flat, a more detailed breakdown of costs according to “trades” must be provided pursuant to § 559b I 1 BGB. These are cost items that list the exact individual work steps.
The VIII. A rent increase declaration does not require a breakdown according to trades. The argument for this is, on the one hand, that excessively high formal requirements for rent increases deprive landlords of the incentive to undertake modernisation measures at all. However, these are desired by the legislator and, in the long run, are probably also in the interest of current and future tenants. According to the Federal Supreme Court, even a precise breakdown of the costs is not necessary, the disclosure of the total amount and the maintenance costs is sufficient to make the rent increase plausible for the tenant. On the other hand, it should be noted that even in the absence of a breakdown according to trades, the tenant was always entitled to a comprehensive right to evidence and information. Whether the rent increase was justified in the specific case or whether the tenants were entitled to a repayment claim due to overpaid rent was not to be examined by the BGH, this is now the task of the Regional Court of Bremen.