HIDDEN EFFECTS IN REAL ESTATE PURCHASES

Hidden defects are characteristics of the property that are not usually apparent from a simple inspection. Examples include inadequate insulation, pests and damp in the masonry, but also false information about achievable rental income. The decisive factor for the seller’s liability for fraudulent misrepresentation is that they were aware of the defects or at least considered them possible and accepted that the buyer was not aware of the defects and that this influenced their decision to conclude the contract. Defects in the property are often concealed by painting over mould and damp patches or covering them with wooden panels or foil. The defects are therefore not immediately apparent during a viewing, but will become apparent after a while or when the buyer carries out renovation work.

BURDEN OF PRESENTATION AND PROOF

In principle, the burden of proof for the existence of defects subject to disclosure and the seller’s knowledge lies with the buyer. In principle, the seller must inform the buyer of any measures already taken to remedy defects in the property. Malice is excluded in the case of defect rectification carried out by a specialist company. The seller is not obliged to check the success of the defect rectification carried out by the specialist company; he may trust that the work has been carried out properly. Due to the resulting different case constellations and the general problem of the burden of proof and presentation, a decision on a case-by-case basis is often necessary, so it may be worthwhile to have the legal situation reviewed by a solicitor.

LEGAL OPTIONS

Fraudulent misrepresentation in the purchase of real estate entitles the buyer to contest the entire real estate purchase agreement in accordance with § 123 BGB . In addition, the buyer is entitled to compensation or a reduction in price due to the seller’s breach of duty. The buyer can also seek rescission of the purchase agreement and a refund of payments already made. Furthermore, the estate agent’s commission and any land transfer tax already paid are eligible for compensation, as are redemption interest payments in the case of a bank loan. The buyer does not have to give the seller the opportunity to remedy the situation, but can assert claims for damages and withdraw from the purchase agreement without setting a grace period due to the damaged relationship of trust. In practice, real estate purchase agreements often contain a declaration by the seller that they are not aware of any defects that must be disclosed. However, such a declaration does not exclude the possibility of contesting the property purchase agreement and claiming damages from the outset. According to § 444 BGBthe seller cannot invoke an exclusion of warranty in the event of a fraudulently concealed defect. Unless the buyer exercises their right of withdrawal, they are entitled to subsequent performance. In this context, the seller is obliged to repair or remedy the defect and must also bear the costs thereof. The limitation period for claims by the buyer due to defects is five years from the date of delivery in accordance with § 438 BGB . In the case of a fraudulently concealed defect, the limitation period is three years from the date of knowledge of the defect in accordance with § 438, 195 BGB.

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Due to misleading wording in many media outlets and, in some cases, misinformation, there is a widespread misconception that rent control does not apply to the letting of furnished flats. This statement is not correct across the board, as § 549 I BGB excludes the applicability of the rent cap within its scope only for certain constellations and thus only in exceptional cases. In practice, the following constellations are particularly relevant:

• Living space that is only rented for ‘temporary use’ and
• Living space that is part of the flat occupied by the landlord and which the landlord is required to furnish with most of the furnishings, provided that the living space is not let to the tenant for permanent use with his family or with persons with whom he shares a permanent household

The first case (short-term rental) is mentioned in § 549 I Nr. 1 BGB and refers to a rental for temporary use, whereby the rental parties determine in advance the period for which the rental agreement is to exist; The reasons for this must lie within the tenant’s sphere of influence. Accordingly, a rental for temporary use can be either a furnished or unfurnished flat; the only factor determining the applicability of the rent control is the actual intended rental period. Whether the flat is furnished or not is irrelevant.

The second case is regulated and covered by § 549 I Nr. 2 BGB the classic flat-share situation, in which the landlord lives in the flat himself and (therefore usually) furnishes it predominantly with his own furniture. In this case, the rent control law does not apply. If the entire living space is made available to the tenant for permanent use with his family or persons with whom he shares a permanent household, § 549 I Nr. 2 BGB does not apply, meaning that the rent control law applies. The furnishing of an apartment and the duration of the tenancy must therefore always be considered separately.

Furthermore, there are no regulations governing ‘furnished accommodation’ under the law. The fact that certain tenants rent furnished accommodation due to private or professional commitments does not in itself lead to exclusion from the rent control provisions. The decisive factor for the applicability of the rent control according to § 556d BGB is primarily whether a case of § 549 BGB. Temporary use of the rented property in the above sense according to § 549 I Nr. 1 BGB is determined by whether the purpose of living ultimately prevails. Residential use prevails if the rented flat is the tenant’s centre of life in the sense of a social sphere, i.e. the establishment of social contacts and relationships, as well as professional and private life. The flat must therefore be the tenant’s spatial centre of life; a specific duration is not relevant in this context. The background to this is that the social sphere of tenancy is particularly worthy of protection, and therefore merely temporary use in the above sense does not require this special protection and is therefore not subject to the scope of the rent control law. Whether the parties can effectively agree on ‘temporary use’ is determined by the actual circumstances and not by the contractual agreement. It is also insufficient that a relatively short contract term was agreed. Here, too, it should be noted that furnishing the flat does not lead to a different result, as this must be considered independently.

Parallel market for furnished accommodation?

It is questionable whether the usual rent index can also be used to determine a local comparative rent. In the opinion of the Berlin Regional Court, there may be a separate submarket for furnished flats, for which a separate, local comparative rent must then be determined by expert evidence. According to the Berlin Regional Court, there may be a separate submarket for furnished flats, for which a separate, locally customary comparative rent must be determined by expert evidence. (Berlin Regional Court, judgment of 13 September 2023 – 67 S 51/22). However, this assessment is contradicted by the final report of the empirical and legal study of the furnished rental housing market commissioned by the Federal Ministry of Justice and conducted by the consulting firm Oxford Economics. The final report from June 2023, following an SSNIP test that makes it possible to identify individual submarkets from the perspective of housing demand, concludes that the furnished housing market does not constitute a separate market.

Whether the rent index can be used for furnished flats or whether a local comparative average must be determined separately is still to be decided by the highest court. Regardless of this, the rent cap still applies to furnished flats as a rule.

Furnishing surcharges

The rent cap therefore generally applies to furnished flats. A flat within the meaning of § 549 II Nr. 2 BGB is furnished if the landlord is obliged to provide the furniture in a condition that complies with the contract, i.e. has a contractual obligation to furnish the property. Such an obligation to furnish the property can be stipulated in the contract, and the parties are free to regulate the scope of this obligation. If the landlord is obliged to provide the furniture in a condition that complies with the contract, he is also responsible for any defects in the furniture. A property is only considered to be fully furnished if the landlord has furnished the flat predominantly with his own furnishings, meaning that the flat is immediately habitable. For this to be the case, it is essential that all essential furnishings are present. The presence of individual pieces of furniture alone is not sufficient for furnishing in accordance with § 549 II Nr.2 BGB. It is also irrelevant whether the furniture in question is particularly valuable or high-quality or whether it is built-in furniture. Essential furnishings are therefore required, i.e. tables and seating, living room furniture, a fully equipped kitchen in working order, lamps and a washing machine. If these conditions are not met, the property is not considered to be fully furnished and a furniture surcharge may not be levied.

According to a ruling by the Kammergericht (KG GE 1980, 863), which was confirmed by the Landgericht Berlin (LG Berlin GE 2003, 954) , the calculation must be based on the current value of the furniture provided at the time of the request for an increase. In Berlin, according to case law, 2% of this current value (the value in use for the tenant, which corresponds to the replacement value) is applied linearly over ten years per month. However, the depreciation and interest rate to be applied in individual cases is not undisputed, which means that case law on fair market value may vary from state to state, making it necessary to consider each case individually. In Hamburg, the calculation is based on the so-called Hamburg model. Here, too, the fair market value of the furniture provided at the time of the request for an increase is used as a basis, but the depreciation period is 7 years instead of 10 years and the maximum pro-rata annual interest rate may not exceed 15%. Since the furniture surcharge should adequately reflect the utility value for the tenant, any corresponding depreciation due to the passage of time, whether the furniture is new and the tenant’s use must be taken into account. In addition, depending on the residential area, certain furnishings such as a fitted kitchen may already constitute a typical feature of the property that influences the rent, in which case a furniture surcharge is not applicable. If the furniture surcharge is to be included in the basic rent, this must be clearly stated in the contract, but the amount of the furniture surcharge and the basis for calculation do not have to be disclosed in the contract. However, landlords often arbitrarily set this furniture surcharge too high or, in the case of a second occupancy of the furnished flat, use the replacement value of the furniture as the basis for calculating the furniture surcharge, thus using an incorrect basis for calculation. As a result, this can lead to an excessively high total rent. For fear of termination, many tenants pay the excessive rents without questioning them. This fear is unfounded, as the tenant has a legal right to information from the landlord regarding the composition of the rent in accordance with § 556g BGB.

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Content of the rent control measure

In terms of content, the rent control law stipulates that rents for new contracts may not exceed the local comparative rent by more than 10%. The respective state governments determine which areas have a tight housing market. New buildings in accordance with § 556f S.1 BGB , which were first used and rented after October 2014, as well as flats that are being rented for the first time after extensive modernisation. Extensive modernisation is deemed to have taken place if the construction measures are of such a scope that the flat is comparable to a new building and if the costs amount to at least one third of the new construction costs. § 555b BGB can be used for modernisation measures. In addition, the modernisation must result in a qualitative improvement of the flat.

Modification of the rent cap

In its judgement of 18.12.2024, VIII ZR 16/23 the Federal Court of Justice also cited the constitutionality of the rent cap, stating that in support of the constitutionality of the rent control law, that landlords must expect frequent changes in the law in the area of tenancy law in view of the current social and political situation and that there is no basis for confidence in a legal situation that favours them. Beyond the extension, a modification of the rent cap is planned, although the concept for this has yet to be developed. It remains to be seen whether and what modifications to the rent cap are planned for the future. The purpose of a modification would be to include more flats in the scope of the rent cap. This would mean that the housing market would also be more regulated and, in particular, that the pressure on large cities would be eased. Discussions have so far focused on extending the scope of the rent cap to index-linked rental agreements and amending § 556f BGB to include new-build flats in the rent cap

IMPACT ON LANDLORDS

The intensity of the impact on landlords depends on whether the rent control measure is simply extended or whether a modification is also decided upon. Currently, the extension of the rent cap until the end of 2029 means that rents in areas with tight housing markets may still not exceed the local comparative rent by 10%. This extension of the rent cap may have a long-term impact on the local comparative rent. More rents will be included in the calculation that are not based on the market rate but on the agreed statutory rent cap.

If a planned modification to the rent control law is implemented, this could mean that new buildings will be included in the scope of the rent control law in future. This, in turn, would primarily have economic consequences for landlords and investors. In particular, long-term planning security for investment projects would be impaired, and willingness to invest in housing construction projects could also decline. In order to cushion the economic disadvantages for landlords and at the same time create an incentive to rent, tax advantages are planned for landlords who rent out their residential property at low prices and thus contribute to easing the housing market. The aim is to avoid vacancies in particular. In addition, violations of the rent control law are to be punished more severely than before.

IMPACT ON TENANTS

The rent cap was primarily developed as a regulation to protect tenants and benefit them. At first glance, it appears to be a good instrument for relieving pressure on the housing market as a whole. So far, it has been applied to fixed-term tenancy agreements at least, and it also applies in cases of unlawful agreements on temporary use. In the context of exorbitantly high rents, it can also be observed that fixed-term agreements are mostly ineffective, resulting in indefinite tenancy agreements. However, the extension of the rent cap could mean a reduction in the overall supply on the housing market for tenants, as many landlords could continue to ‘sit out’ the binding effect of the rent cap, which was actually intended to be temporary, and use the flats themselves or leave them vacant.

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Regulatory content in employment contracts

When including home office agreements in employment contracts, it is important to cover the key aspects of labour law. The key aspects are regulations on the specified home office days or a corresponding agreement on their flexible arrangement. Furthermore, the permitted place of work and availability should be specified. The parties are also free to specify a certain day as a home office day or a higher number of home office days per week/per month. Provisions regarding the necessary technical equipment in the home office and, if necessary, an agreement prohibiting the use of private work equipment are also essential. Employers regularly bear the costs for this, but the parties may also agree otherwise. Furthermore, a provision on legally compliant and internal compliance with data protection regulations and technical processes is essential.

For home offices, it can also be stipulated that employees are free to organise their working hours throughout the day, as long as the agreed work is completed and core working hours are adhered to. This model is known as trust-based working. However, with working time models such as this, it is particularly important to ensure strict compliance with working time legislation, as this also applies outside the workplace. In addition, employees must ensure that they observe the agreed break times and record them for the employer’s accountability. In the long term, a lack of regulations and disagreements between the employer and employee can lead to a shift in liability risks and labour law disputes. In the interests of both parties, this should be avoided in advance if possible. It is therefore worthwhile for employers to seek legal advice when drawing up employment contracts. It is also advisable for employees to seek advice and have the employment contract they are about to sign reviewed in advance.

Occupational safety in the home office

An important point to note is that statutory accident and insurance cover is not limited to the company premises but can also continue to apply in the home office. This means that employers must take occupational safety measures to minimise the risk of accidents for employees working from home. The design and implementation of occupational safety measures proves difficult due to the physical distance involved. In principle, the employer can be granted access to the employee’s home office, or the employee can be required to provide photographic documentation for remote assessment as part of their duty to cooperate. Accident protection in the home office only applies to work-related activities, i.e. those that primarily serve a work-related purpose. Whereas earlier decisions, such as that of the SG Munich, in its ruling of 4. Juli 2019, Aktenzeichen S 40 U 227/18 did not consider going to the toilet and eating meals to be work-related activities and rejected them as occupational accidents, a change in the law in 2021 extended occupational safety in the home office, thus taking social developments into account.

According to recent decisions by the LSG Lower Saxony-Bremen in its ruling of 16. März 2023 – Az: L 14 U 29/22 und des LSG Lower Saxony-Bremen in its ruling of 15.01.2024 – L 3 U 168/23 even an accident involving an employee who is on their way back from purchasing a lunch meal outside their home office for immediate consumption at home may constitute an accident at work. The prerequisite for this is that the accident occurs during the lunch break integrated into the company’s operational processes; the fact that this break may be taken at any time does not preclude this. However, accident protection is not unlimited. According to the established case law of the Bundessozialgerichtes in seinem Urteil v. 06.12.1989, B 2 RU 5/89 relieving oneself is not a work-related activity and is therefore not covered by accident insurance. The LSG Baden-Württemberg, judgement of 30.04.2020, L 10 U 2537/18 states that accident insurance cover ends at the toilet door. According to this ruling, even an accident that occurs while in the toilet without relieving oneself (e.g. for the purpose of washing one’s hands) is not a work-related activity, meaning that this would not constitute an accident at work.

Employer’s recall option

In its judgment of 26 August 2021 – 3 SaGa 13/21, the Munich Regional Labour Court ruled that employers generally have the option of ordering employees to return from working from home at any time. However, the employer must exercise reasonable discretion when deciding on a new place of work. Whether this is the case usually requires consideration on a case-by-case basis. However, the following indicators may be relevant:

• Operational events that require a return from working from home
• Compliance with data protection regulations and technical procedures in accordance with the law and internal company policy can no longer be guaranteed
• The equipment in the home office does not meet the standards of the company premises
• A lack of contractual home office regulations combined with only short periods of working from home, so that it cannot be assumed that this is a major exercise

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THE AWARD PROCESS

The evaluation takes into account recommendations from colleagues and legal experts in particular. In addition, testimonials and reviews from clients were compiled and evaluated. Within this framework, various aspects that are of central importance to clients when selecting a solicitor were taken into account. Online reviews from clients, in particular the recommendation and satisfaction rates, as well as business aspects such as availability, competence and cost transparency, which are important for efficient and smooth client management, are included in the evaluation. Probably the most important factor is the lawyer’s proven professional competence through a corresponding specialist lawyer qualification, i.e. in-depth specialisation in a field of law, which is used as the basis for evaluation. In addition to professional competence, the social component should not be neglected when looking for a lawyer. For the client, aspects such as friendliness, empathy and advisory competence play a fundamental role and form the basis for a relationship of trust and a subsequent client relationship.

The award process is designed to cover all important aspects and provide an overall impression of what potential clients can expect from the law firm and help them find the right solicitor for them. To this end, the data mentioned above was collected as part of the process and evaluated accordingly by AI. More information and a detailed breakdown of the evaluation criteria can be found in the corresponding issue of the FAZ: https://topanwalt.faz.net/250910_TOP%20Anwalt_Privat.pdf

PROFESSIONAL COMPETENCE

The list of top lawyers is intended to provide an overview of the top tier of legal professionals and to highlight their existing professional expertise, such as in the field of tenancy and residential property law. Lawyer Julian Urban has been a specialist lawyer for tenancy and residential property law since 2020 and has since advised countless clients on their legal problems, developed appropriate strategies and worked out solutions. Not only his daily practice, but also his regular participation in specialist lawyer training courses ensure that his legal assessments are up to date and thus take account of changing times.

We are delighted that Julian Urban has been recognised by the F.A.Z. Institute and its recommendation, and see this as proof of our professional expertise and the satisfaction of our clients.

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PREREQUISITES

A termination for personal use is the possibility of cancelling or terminating residential tenancy agreements. It is irrelevant whether the tenancy in question is a residential tenancy agreement, a usage agreement for a co-operative or commercial tenancy, a sub-tenancy agreement or a publicly subsidised flat. The only decisive factor is the contractual purpose agreed by the parties as living space.

The fact that the tenancy agreement was concluded for an indefinite period or that the tenants are only using the property as a holiday home does not prevent the termination for personal use from being effective. In terms of content, the termination for personal use must fulfil certain requirements to be effective.

JUSTIFIED INTEREST

In order for a termination for personal use to be effective, there must first be a legitimate interest in terminating the tenancy. A legitimate interest in this sense exists if the authorised party wishes to use the rented premises in question for themselves, a family member or a member of their household.

In principle, the authorised party in this sense is the landlord, which is why the landlord must also give notice of termination for personal use in order for it to be effective.In principle, the authorised party can also be represented, in this case in accordance with the rules of representation pursuant to Sections 164 ff. BGB. A legitimate interest in accordance with Section 574 II BGB requires that the landlord seriously needs the rented premises in question for himself, a family member or a member of his household.

The mere desire to live in the rented premises is not sufficient for a legitimate interest; rather, there must be comprehensible reasons on which the termination for personal use is based. From the landlord’s subjective point of view, the property in dispute must be more suitable for his residential purposes than the previous living space. The landlord’s subjective view alone determines what is considered more suitable and appropriate. The courts will then only carry out an overall assessment of all circumstances in the individual case.

DIVERGENCE OF LANDLORD AND OWNER STATUS

In practice, it is not uncommon for the owner and landlord positions to diverge. In such cases, it should be noted that the circumstances justifying the termination for personal use must nevertheless lie in the person of the landlord and not in that of the owner.

In cases of transfer of title, for example after the acquisition of a property or through inheritance, the entry in the land register is decisive. The legal successor takes the place of the original landlord after entry in the land register, in accordance with Section 566 (1) BGB. A personal use cancellation that takes place before this entry in the land register is therefore generally invalid.

However, it should be noted that in some cases the legal successor may be able to exercise certain organisational rights, such as a termination, even before entry in the land register. In such a case, however, the circumstances justifying termination in the form of a legitimate interest must also lie in the person of the current landlord – which is likely to be quite rare in the case of flat purchases, for ex

Early termination

A purely precautionary termination is an abuse of rights and therefore inadmissible. The termination for personal use must be closely related to the landlord’s legitimate interest and may not be issued purely as a precautionary measure.

There is no provisional termination if the justified interest is presented in a serious and concrete manner and this is to be realised at least in a foreseeable period of time. The current life plans of the entitled person or intended modernisation measures for the property after the termination are considered sufficient as a foreseeable period

The landlord must intend to use the property as living space; commercial or other use does not constitute a legitimate interest. However, the fact that the premises are only to be used temporarily for residential purposes, as will regularly be the case for the duration of a relative’s studies, does not prevent the landlord from terminating the tenancy for personal use.

If the landlord has several properties to choose from, he has the right to choose which tenancy he wishes to terminate for personal use. The courts do not weigh up whether the choice of another tenancy would have been more appropriate, as it is solely the landlord’s subjective view that matters.

defence options

For tenants who receive a notice of termination for personal use, this often results in an unexpectedly high financial and personal burden. Due to the increase in rents, it is usually difficult to find a comparable, affordable flat in the neighbourhood, meaning that tenants have to leave their previous social environment.

In the case of tenancies listed in Section 549 II BGB, the tenant is not protected against termination. If the flat in question is located in a building with only 2 flats, one of which is occupied by the landlord himself, there is at least limited protection against termination in accordance with Section 573a BGB.

In principle, it is possible for the tenant to lodge an objection to the termination for personal use and to base this on a case of hardship in accordance with Sections 574, 574a BGB. According to this, the tenant can leave the contractual relationship if the termination of the tenancy is unreasonable for him, his family or a member of his household. This determination is made on the basis of an overall assessment, taking into account the legitimate interests of the landlord in each individual case. The objection is mandatory for the defence of a termination of personal use, as otherwise the tenant’s interests cannot be reviewed.

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Definition des Vermieterpfandrechts

The landlord’s lien deals with the securing of claims that the landlord has against the tenant and is regulated in §§ 562-563d BGB. It only exists for claims arising from the contractual relationship between the tenant and the landlord. These claims can arise, for example, from missing rent or ancillary cost payments or from claims for damages. It is also possible to secure claims for payment of compensation for use following late return of the rented property in accordance with Section 546a BGB. The landlord’s lien applies to both residential and commercial property.

Voraussetzungen für das Entstehen des Vermieterpfandrechts

Die erste Voraussetzung stellt ein Mietverhältnis dar. Dieses muss zu dem Zeitpunkt bestehen (§ 562 Abs. 1 S. 1 BGB) und ein wirksamer Mietvertrag zwischen dem Vermieter und Mieter geschlossen worden sein. Zusätzlich muss der Mieter sich im Zahlungsverzug befinden. Hierbei ist es irrelevant, ob sich der Zahlungsverzug auf die Miete oder Nebenkosten bezieht.

Nur Sachen, die körperliche Gegenstände im Sinne des § 90 BGB darstellen, können durch das Vermieterpfandrecht verpfändet werden. Die Gegenstände müssen das Eigentum des Mieters sein und sich im Mietobjekt befinden. Wenn dies nicht der Fall ist, ist eine Anwendung des Vermieterpfandrechts ausgeschlossen. Ebenfalls sind Sachen des Untervermieters nicht pfändbar, da sie nicht im alleinigen Eigentum des Hauptmieters stehen. Aus diesen Gründen ist eine Verpfändung von Sachen des Untermieters grundsätzlich  ausgeschlossen. Allerdings ist es für den Vermieter möglich, Informationen über das Eigentum des Mieters zu fordern.

Nichtsdestotrotz besteht eine zeitliche Beschränkung hinsichtlich der Entschädigungsforderungen. Um die Interessen des Mieters zu schützen ist gemäß § 562 Abs. 2 BGB eine Geltendmachung des Vermieterpfandrechts für eventuell zukünftige Entschädigungsforderungen nicht möglich. Es sind demnach nur Mieten aus dem laufendem und das darauffolgenden Mietjahr vom Vermieterpfandrecht umfasst. Insofern ist der Zeitpunkt entscheidend, ab wann die Forderungen entstanden sind.

Was kann gepfändet werden?

Der Vermieter kann Sammlerstücke, Schmuck, Kunstwerke oder elektronische Geräte, die nicht der Ausübung einer Erwerbstätigkeit dienen pfänden. Der Vermieter kann von seinem Pfandrecht bei unpfändbaren Sachen gemäß § 562 Abs. 1 S. 2 BGB nicht in Gebrauch nehmen. Einige der unpfändbaren Sachen werden in § 811 Abs. 1 Nr. 1-8 ZPO aufgezählt. Zu den unpfändbaren Sachen zählen:

• Geräte, Materialien oder Mittel, die zum Arbeiten benötigt werden
• Persönliche Dokumente
• Kleidung
• Tiere
• Personenkraftwagen
• Gegenstände die keinen Wert besitzen
• Gegenstände des alltäglichen Lebens

Erlöschen des Vermieterpfandrechts

562a BGB regelt das Erlöschen des Vermieterpfandrechts und stellt hierbei Rahmenbedingungen auf. Wenn Gegenstände aus dem Mietobjekt entfernt werden, erlischt infolgedessen das Vermieterpfandrecht. Erfolgt die Entfernung des Gegenstandes ohne Wissen oder Einwilligung des Vermieters, erlischt das Vermieterpfandrecht nicht. Erlangt der Vermieter Kenntnis über das Entfernen der Gegenstände innerhalb des Mietobjekts, muss dieser gemäß § 562b Abs. 2 BGB den Anspruch gerichtlich geltend machen. Geschieht dies nicht innerhalb eines Monats, erlischt das Vermieterpfandrecht. Des Weiteren bleibt das Pfandrecht bestehen, bis die gepfändeten Gegenstände im Rahmen der Zwangsvollstreckung verkauft werden. Der Erlös aus diesem Verkauf dient weiterhin als Sicherheit für die Forderungen des Vermieters.“ Wird das Mietverhältnis zwischen beiden Parteien beendet, kann sich kein Vermieterpfandrecht daraus ergeben.

Weitere Gründe für die Erlöschung des Vermieterpfandrechts können sein:

• Aufhebungsvertrag
• Forderungen aus dem Mietverhältnis sind erloschen
• Vermieter wird durch Erwerb Eigentümer des Gegenstandes

Rechtsfolgen

Der Vermieter kann gemäß §§ 1228, 1257 BGB die Gegenstände des Mieters weiterverkaufen und aus dem Erlös seine Ansprüche tilgen. Ist der Anspruch des Vermieters fällig, kann dieser die Aushändigung des Gegenstandes durch den Mieter verlangen.

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Facts of the case

The defendants rented the new-build flat in dispute from the plaintiff when they first moved in. In addition to a rent increase at the end of 2 years, a diplomatic clause was also agreed. In this diplomatic clause, the defendant was granted a special right of cancellation with a notice period of 3 months in the event of a transfer, termination of the employment relationship or the severance of diplomatic relations between the sending state and Germany. In January 2023, the defendants reduced the rent by 100% on an ongoing basis on the grounds that the flat had been uninhabitable since September 2022 due to vermin infestation. They argued that the flat had in fact already been defective since moving in. Initially, the plaintiff offered to remedy the defect without recognising any legal obligation, although the rented flat had previously been unoccupied and pest-free when the tenant moved in. The consultation of an expert revealed that in this specific case, the pests were developing in dry plants or certain textiles. According to the expert opinion, the development of the pests could be prevented by sufficient ventilation and regular checks. The plaintiff then refused to pay for any additional hotel costs incurred. In March 2023, the plaintiff terminated the tenancy agreement without notice, or alternatively with due notice due to late payment. Since then, it has been disputed whether the defendants are responsible for the rental defect. However, the Regional Court and the Local Court are of the opinion that the inadmissibility of the action would already prevent clarification of the facts.

LEGAL ASSESSMENT

As a result of the full rent reduction for the period January to March 2023, the defendant tenants are in default of payment. Based on the tenancy agreement, the tenant is obliged to pay rent in accordance with Section 535 (2) BGB; if he does not fulfil this payment obligation, this may justify termination. The defendants should not have been entitled to a rent reduction for this. According to the findings of the expert opinion, the development of the pests could have been avoided by taking appropriate measures, which the defendants negligently failed to do, so that the rent reduction was not justified. After termination of the tenancy, for example by cancellation, the tenant is obliged to return the rented property in accordance with Section 546 BGB. Accordingly, in the underlying case, the owner of the rented property would also have a claim in rem against the tenant for restitution under Sections 546 (1) and 985 BGB.

JUDGEMENT – INADMISSIBILITY OF THE ACTION

According to § 18 GVG in conjunction with Art. 31 WÜD, diplomats are not subject to German jurisdiction without restriction. Exceptions apply to actions in rem relating to private immovable property, private probate matters, actions arising from private commercial or professional activities. The AG argued that the plaintiff could not invoke one of the exceptional cases, as nothing was brought forward in the court proceedings regarding his ownership status and he could not credibly demonstrate a lack of knowledge of the defendant’s diplomatic status with reference to the contractually agreed diplomatic clause. In any case, the defendants did not enter an appearance in the lawsuit. However, the plaintiff’s claim for restitution under Sections 546 (1), 985 BGB is also a claim in rem, as it concerns the transaction of disposal, so that the flat would be private immovable property and thus an exceptional case under Art. 31 WÜD. The Regional Court stated that actions in rem in relation to private immovable property of the sending state are only exempt under Art 31(1)(2)(a) WÜD if the diplomat is in possession of it for the purposes of the mission. Accordingly, the defendant is subject to functional official immunity, although it is in fact a private residence.

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Der Beitrag Judgement discussion – Conclusion of contract with diplomats erschien zuerst auf JUR LAW.

PRINCIPLE OF DIPLOMATIC AND CONSULAR IMMUNITY

Diplomats are part of a so-called ‘privileged group of persons’ within the meaning of Art. 14 WÜD, which is protected by diplomatic immunity in accordance with Art. 31 para. 1 sentence 1 WÜD in conjunction with Art. 37 I WÜD. Diplomatic immunity comprises a fundamental exemption from measures of civil and administrative jurisdiction, as well as an absolute exemption from measures of criminal prosecution by the receiving state. The purpose of immunity is to ensure the effective exercise of diplomatic or consular functions. According to Article 29 sentence 1 WÜD, this immunity guarantees both the inviolability of the person and the inviolability of the private home. This ‘privileged group of persons’ includes members of missions established in Germany, diplomatic staff, their family members belonging to the household and also their private domestic servants. While comprehensive immunity applies to diplomats on secondment, this is limited to official immunity for resident diplomats of the receiving state. Official immunity only protects the official, but not the private actions of persons. However, Art. 31 para. 1 WÜD provides exceptions to this principle: it does not apply to legal disputes in probate matters or disputes concerning immovable property (including, for example, land). A distinction must therefore first always be made as to whether the state has acted under private law or in the exercise of its state authority. A state or consulates, embassies and diplomats as representatives of the state can no longer invoke their immunity when acting under private law. One such classic act under private law is, for example, the conclusion of a (residential) tenancy agreement.

EFFECTS, PREVENTION AND LEGAL OPTIONS FOR ACTION

The state representatives can therefore be subject to German jurisdiction, but if enforcement measures are to be carried out, considerable problems arise in the enforcement of claims. Such problems can arise either as early as the discovery proceedings or at the latest in the enforcement proceedings. Classic examples are eviction proceedings, notice periods and rent. Preventive measures should therefore be taken at the contract drafting stage in order to avoid any problems that may arise later. As early as the contract initiation stage, information should be requested from the diplomats as to which group of persons they fall under within the meaning of the Vienna Convention on Diplomatic Relations.

A preventative measure would be to agree a diplomatic clause that declares the explicit waiver of immunity. It should be noted here that a separate waiver of immunity is required for the enforcement of judgements. Ideally, cancellation modalities such as a notice period and a possible special right of cancellation should also be clarified in advance. If the appeal process has been exhausted or declared inadmissible and the claim is therefore not enforceable, there is nevertheless no hopeless situation. In principle, there is the possibility of mediation between the two parties via the Federal Foreign Office. In the ideal case of mediation, the landlord receives compensation from the state of the expatriate, even though there is no legally enforceable claim. This mediation option can also be utilised if legal proceedings do not promise success from the outset due to the immunity of diplomats.

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Der Beitrag LETTING TO DIPLOMATS AND OFFICES erschien zuerst auf JUR LAW.