Legal issues in shared-flats

I. Types of flat-sharing communities (in terms of tenancy law)

As a specialist lawyer for tenancy law, I am often confronted with the tenancy law issues facing tenants of shared flats. Most questions arise in connection with termination and how to „get out“ of a shared tenancy.

Many people who share a flat are not sure at all how their tenancy situation is defined under tenancy law. I am often asked questions like „How do I get out of the rent contract?” or “What is the period of notice?” I am also often asked, “Does everyone have to give notice and what if the others don’t agree to the termination?”. And the only answer I can usually give is: “It depends on the situation”. In the following article, I will provide you with some information on what to consider before signing a rent contract and about what legal consequences result from the different options.

 

 

There are three  (in practice „two“) conceivable options for concluding a rent contract with/among the tenants of a shared flat, and depending on which option they take, how they can „get out“ of this rent contract.

1. Everyone is a main tenant in the contract

The first option is that everyone is entered in the contract as a main tenant. This means that each individual tenant enters into a contractual relationship with the landlord – not only individually but also jointly. This is different to option 3, in which each tenant enters into a separate individual rent contract with the landlord. Graphically presented, it looks like this:

Landlord

|

Main tenant 1

2

3

and so on

2. There is only one main tenant

The second option is that only one tenant in the shared flat becomes the main tenant and the remaining ones become subtenants. The contractual relationships are then „tiered“. Only the main tenant has a contractual relationship with the landlord. The landlord has a double function here, as he is both tenant and landlord at the same time:

Landlord

|

Main tenant

| \

Subtenants 1 2 etc.

3. Everybody concludes a separate contract

A situation provided for under law, but which I have never come across personally, is the following third option: each member of the shared flat signs a separate rent contract with the landlord. This then applies to individual rooms, and provides the possibility to use „common rooms“ (i.e. usually bathroom, kitchen and living room, if any). This means that there are individual and separate rent contracts between each individual member of the shared flat and the landlord:

Landlord

|             \

Main tenant 1 2 etc.

II. Termination options

From the above, it is easy to deduce which rules apply to a termination in each respective option.

1.

This is where the greatest difficulties arise when one of the tenants wants to “get out of the contract“ because:

Firstly, if several people are party to the contract, then the tenancy can only be terminated by all parties to the contract. This means that each individual tenant in a shared flat is dependent on the cooperation of the other co-tenants.

For this reason, however, an individual tenant also has the right to demand that their co-tenants also give notice of termination. If necessary, and if the other parties refuse to cooperate, a lawsuit can be filed to force the other co-tenants to issue a declaration of intent to terminate. If the judgement on this legal action becomes legally binding, this declaration of termination is deemed to be valid and the termination is deemed to have been pronounced. However, such proceedings can take a long time and can be nerve-wracking, and they cost time and money. This is also one reason why it is good to seek an amicable solution.

The period of notice is the “normal“ period of notice as outlined in Art. 573c I 1 BGB (German Civil Code), roughly speaking three months, stated under law as follows:

“Notice of termination is allowed at the latest on the third working day of a calendar month to the end of the second month thereafter.”

Example: The notice of termination is declared by the third working day of January, which means the rent contract ends on the last day of March.

The advantage for the landlord here, which is at the same time a disadvantage for the tenant, is that the landlord can demand the entire rent from any of the members of the shared flat. The key phrase here is “joint and several liability”. An individual tenant can then in turn demand compensation from “the others”, but this often means that they then have to “run after their money”. For this reason this variant („several debtors“ together, possibly with parents who have issued a guarantee) is often preferred by landlords. The landlord can also prevent (as an exception) individual tenants from being replaced by new tenants, because he has concluded a contract with all tenants (and has chosen them as contractual partners) therefore making it complicated to transfer from one tenant to another.

2.

If only one of the tenants in the shared flat is the main tenant, then the legal consequences are basically the same as shown in the above diagram. In view of the individual contractual relationships, these can be terminated “normally” without having to take into account any special provisions (with regard to the exceptions). This means:

a) Termination by the subtenant

Every subtenant can terminate their rent contract with the main tenant without giving reasons (and completely independent of the other subtenants) by giving notice and complying with the statutory period of notice provided for in Art. 573c (1) sentence 1 BGB as described above.

b) Termination of the main rent contract by the main tenant

In this case, the provisions of a) above apply; the main tenant may terminate the main tenancy without giving reasons by observing the notice period in Art. 573c (1) sentence 1 BGB as described above. However, the main tenant may then face the problem of not being able to fulfil their contractual obligations towards the subtenant(s). Since there is no automatic link between the different contracts (unless contractually regulated), the end of one contract has no effect on the existence of the other contract. In other words: the main tenant would do well to make sure that the sub-lease contracts are also terminated accordingly. Otherwise they will not only have a problem with the subtenants (whose contracts will continue to apply), but also with the landlord, who might demand that the entire apartment be vacated. This includes the rooms which, in the worst case, are still occupied by the subtenants.

c) Termination of the sub-lease contract by the main tenant

Since the law assumes an “imbalance of power” between landlord and tenant and considers the tenant to be worthy of protection, a landlord (in a similar way to labour law for employers) generally requires a reason for termination. In contrast, the tenant (see above) can terminate the tenancy without giving any reason, in each case with a fairly short notice period (which is not extended by law, (unlike for the landlord, for whom the notice period increases with the length of the tenancy).

But there is also an exception to this principle, namely if the main tenant also lives in the apartment themselves. In this case, a special right of termination exists (573a (2) BGB), according to which a main tenant (who is as well the landlord in relation to the subtenant) can terminate a rent contract for residential space within the apartment in which they live without the need for a legitimate interest in the sense of Art. 573 BGB. In this case – as it were, as compensation in favour of the tenant for the fact that the main tenant does not need a reason – the period of notice is however extended by a further three months (in addition to the usual period).

The main tenant is, however, also entitled to terminate the rent contract (additionally or alternatively) by giving reasons in an orderly manner (without notice, of course, in the event of substantive reasons), provided that the relevant requirements are met. For example, in the case of (serious) violations on the part of the tenant against their contractual obligations or in the case that the landlord wants to use the flat for personal use.

I would like to briefly point out another exception, namely the regulation under Art. 573c III BGB, where the period of notice for both the main tenant and the subtenant is only about two weeks, because then either party can terminate the contract by the 15th of a month at the latest at the end of the respective month. The prerequisite for this is that it is “living space which is part of the flat occupied by the main tenant (who is as well the landlord in relation to the subtenant)) him/herself and which has mainly been furnished by the landlord, unless the living space is rented to the tenant for permanent use with his family or with persons with whom s/he runs a joint household on a permanent basis“.

In the third variant the “normal rules of termination” apply, because the tenancies are completely independent of each other.

III. Agreements / possibility and right of exchange

A termination is always the severest of all measures. A tenant should only declare termination if no amicable solution can be found. Of course, if deadlines are to be met, the tenant should declare termination as a precautionary measure.

The parties to a rent contract can of course agree at any time that one of the co-tenants exit the contract with a new tenant entering their place by joining the rent contract.

But what happens if the landlord does not agree to this “exchange”?

Basically, the only option that remains – as already explained – is for all co-tenants to terminate, unless the apartment has been rented to them as a “flat-sharing community”. In this case, the contract is to be interpreted in such a way that the members of the community can demand from the landlord to be released from the contract and that other reasonably acceptable co-tenants be allowed to enter the contract as new tenants in place of the persons leaving. Consent for this still has to be obtained from the landlord, but the landlord is also obliged to give this consent. This consent must also be asserted (in a similar way to the aforementioned case of termination by all main tenants), if not otherwise possible, by means of a lawsuit.

1. Conclusion, practical tips and request for suggestions

The choice of the type of contract therefore determines how the respective contract can be terminated, in other words, how co-tenants can “get out of the flat-sharing community”. It is also important to bear in mind that I have “only” presented the legal regulations (and these only in their basic outline). It is of course possible (as far as legally permissible) to make agreements that deviate from these, e.g. concerning the options for giving notice and the possible periods of notice. So if you are planning to set up a “flat-sharing community”, you should seek professional advice and arrange the details (in a similar way to a marriage contract) as long as all parties involved still understand each other well. Once the mood has “soured” or a dispute arises, it is often too late. The same applies to the termination of a rent contract or when one flatmate moves in to replace another one moving out. If possible, an amicable settlement should be reached before you give notice of termination. It is often advisable to commission a third party (if your own attempts have not been successful) in order to present an objective examination of the dispute and the issues involved.

2. Consulting assistance

There are often phases in your life where your income level is still moderate, and if this is so you might qualify for a so-called “legal aid cheque”, which allows you consult a lawyer of your choice. In this case, you only have to pay a personal contribution of currently 15.00 EUR. If you present such a cheque (to be issued by your local court, we will be happy to answer any questions to this end). This consultation and the pre-court representation (i.e. letters to the counterparty, etc.) are covered by the payment of your own contribution.

3. Ask for more information!

Of course, this article does not claim to be complete, nor can it replace legal advice in individual cases. If you have any suggestions as to what legal topics are/could be interesting for “a flat-sharing community”, I would be pleased to receive your feedback or your questions. I will then, depending on the scope and suitability, incorporate these aspects into this article or create a new article.

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