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Termination of tenancy due to intended owner occupation

Owners of rental properties are generally happy to have reliable, long-term tenants and problem-free tenancies. Because this saves them a lot of hassle, worry and, of course, money in the end. However, for a variety of reasons, the landlord may wish to terminate a tenancy. The most common reason for this, according to statistics, is a defaulting tenant who does not pay his rent. Today we would like to deal with the second most common reason for terminating a tenancy agreement: intended owner occupation.

What could be the reasons for this? To understand the causes, we need to look no further than the famous quote from the philosopher Heraclitus, who already knew 2500 years ago: "The only constant in life is change".  Changes in life can make it desirable or necessary to live in one's own four walls. Now, even in an amicable relationship, landlord and tenant are two parties with different interests, and termination unfortunately offers the potential for disagreement.

For this reason, the law has created clear guidelines for the notice of termination of tenancy due to intended owner occupation, which offer protection for the tenant. You as the owner have a so-called "guarantee of ownership" over your rental property. Therefore, you should familiarise yourself thoroughly with the legal situation before giving notice of termination of tenancy due to intended owner occupation. For it is not uncommon for a dispute to end up in court.

 17220 Sant Feliu de Guíxols (Girona)
- A termination of tenancy due to intended owner occupation can be amicable for both sides if they reach out to each other. Learn more in the new blog post!

Prerequisites for a termination of tenancy due to intended owner occupation

First and foremost, you as the owner must be registered as a natural person in the land register. The notice of termination must be given in writing and with the correct period of notice. This depends on the duration of the tenancy agreement. If it exists for up to 5 years, a three-month period must be observed. Six months' notice applies to existing five-to-eight-year contracts and nine months' notice applies for contracts of more than eight years. A registered letter with acknowledgement of receipt is recommended for notification.

A "justified interest" in the owner-occupation of the property must be formulated clearly and unambiguously in the notice of termination. The reason given must not have existed prior to the commencement of the tenancy and must be able to withstand possible review. Fixed-term tenancy agreements can generally not be terminated in this way.

Justified interest

According to § 573 of the German Civil Code (BGB), a justified interest to the living space exists if either the landlord himself, family members or members of his household are in need of it. In the case of more distant family members, reasons must be given as to the circumstances that give rise to a special bond. Members of the household may include the long-term common-law partner and his or her children, or caregivers with close ties. What a selection of these cases shows is that there will always be special cases and special regulations. It is therefore not possible to mention them in full, and it is always advisable to seek legal advice in case of uncertainty.

Reasons for the invalidity of a termination of tenancy due to intended owner occupation - using the example of the hardship clause

It is possible that the social clause for tenant protection applies despite justified reasons. This would be due to old age or need for care, pregnancy or insufficient income, among other things. The tenant would have a legitimate right of objection. This also applies if suitable alternative accommodation could not be procured at acceptable conditions. Again, an in-depth review of the individual case is essential, because there is no blanket tenant ineligibility for termination under the law.

Find alternatives and avoid disputes

Finding an amicable solution is the best way forward for both parties. As a landlord, take a look at the situation and put yourself in the position of the person being evicted. This makes it easier to understand his presumably distraught emotional state. Living in familiar surroundings brings with it a sense of security, and this suddenly seems lost.

A helpful step can be to seek a personal conversation with the tenant before he unexpectedly finds a letter of termination in his letterbox. Explain to him how the situation on your side has changed. Explaining your reasons can be a basis for understanding and also a willingness to compromise. Offer support in finding alternative accommodation! It may also help to extend the notice period if it is foreseeable that this will be a great hardship due to difficulties in finding accommodation.

Another proposal for an amicable settlement can be a rent termination agreement. If financial constraints are a major hurdle, such a contract can help to build a bridge. It should be drafted in a tenant-friendly way and the terms should be negotiated fairly and with the full consent of the tenant.

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Engel & Völkers
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