Rent Increase without 3 Month Notification?

Is a landlord allowed to raise the rent even though he did not inform his tenant beforehand of planned construction work on the premises? The BGH published its opinion dated September 19, 2007 (re VIII ZR 6/07).

Viludril informed his tenant Tuludrul that an elevator was to be attached to the house. After construction, the rent would then be raised to approx. € 108.80. Tuludrul responded by stating that he would only accept the installation of a lift if the rent would not be increased. Viludril had the elevator built in and subsequently raised the rent by €107.06 according to precise legal calculations. Tuludrul refused to pay the higher rent. He referred to §554 III 1 BGB to support his argument. This rule gives the tenant the right to decline the renovations and vacate the premises. Tuludrul argued that he should have been given three months advance notice of the planned renovations, effects of the construction, approximate duration of the installation work and the estimated rent increase in written text form.

The Federal Civil Court of Justice held that a belated notification in accordance with §559 BGB did not exclude raising the rent. Even if a rent increase with no advance warning is frowned upon according to the reading of the above referenced statute, only as a last resort of equity will this rent increase not be deemed justifiable. The three month period is given to allow the tenant sufficient consideration time to decide whether if he will or will not tolerate the construction with the associated raise in the rent. For this reason, the lawmaker grants the tenant a special right of terminating the contract following §554 III 2 BGB. Therefore, this limitation period does not prevent the landlord from raising the rent with a belated notice of planned modernizations.

This judgment is pretty spectacular, as only rarely have the proprietor’s rights been given precedent over the tenant’s rights and freedoms. Normally, courts tend to favor the tenant.

Published on the old CMS: 2008/7/1
Read on the old CMS till November 2008: 2,119 reads