The notorious decision of the Federal Court of Justice, as reported, BGH answered this question on July 9, 2008 (re VIII ZR 181/07), ruled that stipulations governing a renovation with “fixed periods” are invalid. A landlord came up with the idea to demand a surcharge from his tenants when raising the rent. Is this valid or an illegal work-around?

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The landlord used a template contract containing the invalid stipulation that the apartment was to be “regularly (regelmäßig)” renovated within certain clearly defined periods. Knowing the invalidity of this clause, the landlord proposed the use of a supplementary agreement regarding the repairs When .the tenant refused, the landlord used his legal right to raise the rent and add a surcharge in accordance with §28 IV 2 II. II. BV. This section states that the rent can be increased in accordance with locally comparable rent (ortsüblichen Vergleichsmiete) with a surcharge of up to € 0.71 monthly. This monthly surcharge compensates the landlord for the renovation costs incurred for subsidized building constructions (öffentlich geförderten Wohnungsbau). Because the tenant also refused this, the landlord filed a case in court.

The court had to decide whether an increase in private rent with a surcharge up to the locally comparable rent is in accordance with §558 BGB in order to compensate for the unlawful stipulation of rigid renovation clauses.

The court decided that the proprietor is not entitled to demand a surcharge to the locally comparable rent when the contract contains the unlawful “rigid renovation clause”. §558 BGB only gives the landlord the enforceable right to raise the rent up to the locally comparable rent –- nothing more and nothing less. The statute does not provide grounds for such a surcharge. Further, such approach cannot be reconciled with the legal system of comparable rents. The market situation is the basis for raising the rent. When acknowledging such approach, raising the rent will no longer be linked to prices that can be demanded on the market.

The complaining landlord’s argument that the addendum must be a supplementary interpreted of the contract (§§133, 157 BGB) was dismissed by the court. This argument will only work when choosable, i.e. dispositive, law needs to be supplemented and the total abatement finds no reasonable solution in furtherance of the interests of the parties. These prerequisites have not been met here. Quite the contrary, the landlord is trying to circumvent ruling case law.

Published on the old CMS: 2008/8/1
Read on the old CMS till November 2008: 1558 reads