The following is about the BGH judgement of 22 June 2022 – VIII ZR 356/20 and its underlying facts on the effectiveness of the Berlin dismissal protection clause. The facts of the case have been summarised for better understanding.
FACTS
The defendant was a subtenant of a flat in an apartment block. The main tenants of the flat since 1985 were the defendant’s sister and person C. The owner of the property transferred 1/5 of her co-ownership share to B in 1990. After the owner’s death, 4/5 of her co-ownership share was transferred to the heir A. In 1996, the division of the property was declared in accordance with § 8 WEG and A and B were entered in the land register as co-owners in 1997. In the same year, B transferred 1/5 of his co-ownership share to A, and A was also entered in the land register as the sole owner of the apartment building.
After the death of A, A’s sole heir concluded a supplementary agreement to the tenancy agreement of 20 December 1985 with the defendant, her sister and C in 2014. According to this agreement, C left the tenancy agreement and the defendant entered into the tenancy as the main tenant. In 2015, the defendant’s sister died and her husband P became her sole heir. The residential property was transferred to O- GmbH in 2015 and a land register entry was also made in the same year. In 2018, the plaintiffs then acquired the residential property in the disputed flat, and in December 2018 they gave notice of termination for personal use. In the appeal proceedings, the plaintiffs are seeking to have the judgement of the local court, which had initially upheld the plaintiffs’ action for eviction, reinstated.
RESTRICTION ON TERMINATION IN THE EVENT OF FLAT CONVERSION
The central provision of the judgement is Section 577a BGB. This standard contains a restriction on cancellation following the conversion of a rented flat into a condominium. After the conversion, a blocking period of 3 years applies to the assertion of justified interests of the purchaser. Such a legitimate interest may result from a termination for personal use or (under strict conditions) also from a termination for realisation. The lock-up period can be extended from 3 to 10 years in regions with a tight housing market. The main reason for extending the lock-up period is to ensure that the population is adequately supplied with rental accommodation on reasonable terms and to protect them from losing their homes. Already tight housing markets should be relieved as far as possible or at least not put under further strain. Berlin has had a tight housing market for some time and therefore made use of this regulation in 2013. The extension of the lock-up period is not limited to districts, but applies consistently throughout Berlin.
WHEN DOES THE LOCK-UP PERIOD START?
The BGH bases this on the time of the first acquisition of the residential property. Pursuant to Section 577a I BGB, the lock-up period begins with the first sale of the previously formed residential property to the purchaser. This first sale took place here for the first time with the acquisition of ownership by M-GmbH and its entry in the land register in 2015. Although the transfer of B’s co-ownership share to A constitutes a legal sale of a property share, this is not a sale to the purchaser within the meaning of Section 577a I BGB. The court justified this with the lack of a change of landlord. The purpose of the standard is to protect the tenant from terminations for personal use, which are to be feared due to a change of ownership and the (regular) associated change of landlord. However, the tenant’s risk of termination (for personal use) has not increased significantly due to the acquisition of the co-ownership share in this case, which is why this point in time should not be taken as the first acquisition.