Rental arrears: Reason for termination without notice
According to paragraphs 543 and 569 of the Civil Code, the rent arrears must be substantial so that a landlord may terminate the contract without notice. For example, two rents not paid in succession can lead to rental arrears.
Access to security deposit only allowed on eviction notice
The landlord must not rely on the deposited rent deposit to compensate for the backlog. The recourse to this money may be made only in the context of an eviction action, if the landlord receives a title for enforcement.
Reasons for withholding the rent
As a landlord you have the option to retain part of the rent in case of rent defects. However, you should take into account that you may be in arrears by the arbitrary reduction of the rent, which can lead to a termination without notice.
Therefore, you always have to announce a rent reduction to your landlord and can justify it. It is advisable to cover the portion of the retained rent in case of a rent reduction. In the event of termination without notice, you can immediately settle the outstanding rent and make the termination ineffective.
What happens with rent arrears
If you are in a significant rent arrears, your landlord can terminate without notice. For this, a reason for termination must be mentioned. Further formalities for termination without notice can be found later in this guide.
It is important that a landlord does not have to send a reminder before canceling without notice. It is enough that the tenant is defaulting. As soon as the rent has not been received by the landlord in due time, the tenant is in default.
What to do if I’m in arrears?
If you as a tenant are in arrears with the rent, you can use various options:
- Looking for a personal conversation with the landlord
The landlord is not obliged to cancel the rent arrears. If you have established a personal relationship and know each other, then he may be able to be accommodating if you can provide him with valid reasons for not paying the rent. It is always advisable to stay with rent arrears in conversation with the landlord.
- Advice by Mietvereine
One of the tasks of tenants’ associations is to advise their members also in case of problems with the rent payment. Prerequisite for a consultation is usually the membership. Note any waiting times for a new membership.
- lend money
You can also offset your rental debt if you borrow money. Often, friends or relatives can help out in the short term. Such a loan from private is usually interest-free and unbureaucratic. Of course you can also take out a loan from a bank to pay your rental debt. However, you usually have rental debt because you can not or could not afford the rent. In this case, the chances of a loan are rather bad.
- Rental debt takeover by the Jobcenter
If you receive unemployment benefits, the Jobcenter can pay your rent. Thus, the state wants to avoid that you become homeless by a termination without notice. It is important that you contact the job center at an early stage because of the assumption of your rental debt and do not wait for an eviction action. The form of assistance may take the form of a loan or non-repayable assistance.
- Rental debt assumption by the social welfare office
The Social Welfare Office can assist you in taking on rent arrears. This applies, for example, if you receive ALG II and can no longer pay your rent or are in arrears. Again, the sooner you turn to the help desk, the better.
- Apply for housing benefit
To compensate for a rent arrears, you can also apply for housing allowance. The application can be submitted to the responsible district office.
- Advice from social media
In every city or community there are social bearers of churches like the Caritas or Free Carriers like the International Federation. These provide assistance with rental debt and help you to resolve the financial difficulties.
Termination may become retroactive ineffective
A termination without notice for rent arrears can become retroactively ineffective, if the tenant compensates the arrears immediately after receipt of the notice. The same applies if there is an eviction notice and the tenant pays his arrears within two months. The termination is also ineffective if a public authority assumes the rental debt. The termination remains for the time being, it is only ineffective.
So you can respond as a landlord
As a landlord you can always deal with defaulting tenants. Here’s how to handle it.
- One time rent arrears
If a tenant is once with the rent payment in arrears, there is basically no reminder. Because the lack of rent at the contractually agreed date, the renter automatically defaulted. It is recommended, however, to make the tenant directly aware of the delay, for example in a telephone call. It usually tells you quickly why the backlog and theoretically can immediately clarify whether you remain accommodating or not.
- Frequent rent arrears
If a tenant often pays his rent late, you should send him a corresponding warning. Because if you do not comment on the irregular payments, that equals a quiet tolerance. In the warning, you can refer to the lease and reserve the right to terminate the contract without notice in case of further irregular payment.
That should include a reminder
Indicate in the reminder that you have noticed the irregular payments. Other important contents of the reminder:
- Concrete dates for the receipt of the rent
- Reference to the lease with the payment period for the monthly rent.
- Note that you will no longer tolerate the delay in payment.
- Request for punctual rental payment.
- Reference that in case of future irregular rent payment a termination without notice takes place.
- Date and signature
It is recommended that you send the reminder by registered letter to your tenant or hand it over to him personally. So make sure he gets it too.
This is a termination without notice
To be able to terminate your tenant without notice, there must be several conditions:
- The rent was not paid for two consecutive payment dates.
- The tenant is in arrears with a not inconsiderable portion of the rent and has not paid the rent for at least two consecutive months or only incompletely.
- The tenant is in total more than one rental fee in arrears, if the period extends to more than two payment dates. Example: The tenant has only paid the full rent once within four months and three times only proportionally so that he is in arrears with a full rent.
Not all outstanding payments count
Paid payments of utility bills or deposits must not be taken into account.
Formalities for termination without notice
In order for a termination without notice to be valid as such, you as a landlord must comply with certain formal requirements:
- The termination without notice must be in writing. An oral termination is not enough.
- You must personally sign your termination. If written by a property manager or lawyer, he must have power of attorney. This should then be settled the termination.
- If your rental property is occupied by several tenants, the notice must be delivered to each tenant or explicitly addressed to all tenants.
- In case of termination without notice landlords can set the deadline themselves.
- Termination will take effect from the time the recipient receives it. Therefore, it should only be sent by registered mail or delivered in person.
- You must justify your termination without notice. This can be the rent arrears.
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