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The right way to assert a rent reduction

  • RA Daryai
  • Tenancy Law - commercial property, Tenancy law - Housing
Article

Asserting a rent reduction under civil law against the will of a landlord is not without problems when the parties involved are in dispute with one another. Tenants often forget that, when they go to trial at a later date, they must not only provide proof of the defects that were the reason for reducing their rent, but also proof of a series of other things, because the rules pertaining to civil proceedings stipulate that each party is responsible for presenting the facts of the matter that speak for their case and must furnish proof of these. In this article I would like to give tenants some tips about how to act if they aim to assert a rent reduction.

Providing notification of a defect

Before being allowed to reduce the rent, the landlord must first of all be notified about the fact that there is a defect. If the defect has occurred in the apartment, the landlord only has the chance to rectify the defect if he knows about it. If the landlord knows about the defect or has caused the defect (for example, during work to renovate the façade), it is of course not necessary to notify the landlord about the defect.

The duty of the tenant to provide notification of the defect is regulated in Art. 536c (1) clause 1 German Civil Code (BGB). If the tenant has not notified the landlord about the defect and the latter can therefore not rectify it, then the tenant is not allowed to reduce the rent Art. 536c (2) clause 2, No. 1 BGB. The tenant is obliged to provide proof when giving notification of a defect – at least in the view of most judges. And even if there are different opinions about who should provide the proof of the (missing) notification of a defect, it certainly does no harm to gather all necessary information in an orderly manner.

How do I provide notification of a defect?

If the relationship between tenant and landlord is unproblematic, it is enough to call the landlord personally and inform him about it on the phone. In this case, it can be expected that the landlord react to the notification of a defect immediately.

Another simple way to inform the landlord about a defect that avoids escalating the situation is to send a letter asking for confirmation of its receipt.

If the landlord does not contact you within a short period in reaction to your notification of a defect, only informs you by telephone that the defect will be rectified without actually doing anything, or does not confirm in writing that he has received your notification of defect, then you should choose a form of notification about which you can provide proof at a later date. For example, you can have a witness call the housing manager/landlord and once again expressly inform them about the defect.

If this simple notification does not lead to the defect being rectified, then you have to provide written notification (once more). When doing this, a good way to proceed would be as follows: the best thing is to have a witness make a copy of the notification of defect signed by you, before he puts the original in an envelope and then delivers this personally to the letterbox of the housing manager/landlord. Or he should send it as a registered letter requiring confirmation of receipt. He should then note this down on the copy as follows: “Original delivered to the letterbox of the landlord at [address] on August 1, 2019 and/or sent by post.”

Documenting the defect

As lawyers, we always have to think about what needs to be done if a matter should happen to end up in court. That’s why, if you have decided to reduce your rent, you should do everything necessary to make the reduction “ready for court”.

In a legal dispute, the tenant must present and prove what defect exists, to what extent there is a defect and state what problems are caused by the defect. That is why it makes sense to document everything in detail from the very beginning. You need to think about the fact that, at a later point in time, a judge who cannot see the defect will still have to gain a good picture of it. It could be that the defect has even been rectified already by the time you go to court.

You must make sure that you can present any documentation in court. The best forms of documentation are witness statements, photographs and a protocol of the problems caused by the defect.

The individual options for documenting defects

Documentation by a witness makes particular sense in such cases. The landlord may dispute, for example, on what date a photograph was taken. However, when a photo is submitted together with a witness statement, such as “I took the photograph on …” or “The photograph shows the way things were on …”, then this provides proof that the defect existed at a specific date and time.

Proving “invisible” problems, for example noise, is particularly difficult. Such problems are often only a problem at certain times and are difficult to provide evidence of afterwards. What is more, people’s sensitivity to such things is very different, which is why you should make sure you are especially careful when documenting such problems.

It is true that the German Federal Supreme Court (Bundesgerichtshof) recently considerably reduced the requirements for the arguments the tenant has to bring in court. Nevertheless, it still holds that a tenant must provide proof that a concrete problem is caused by noise which leads to a restriction in the suitability of the apartment for its contractually stipulated use. That is why I also still recommend that tenants keep a corresponding record of all relevant facts over a longer period of time. The same applies of course for other invisible and therefore difficult-to-document problems (for example, unpleasant smells from a restaurant).

In severe cases or in cases where there is a risk of evidential material being lost, there is also the so-called ‘independent proceedings for the taking of evidence’ (Art. 485 f. Code of Civil Procedure (ZPO)). In such cases, where there is a need for haste, evidence can be taken fast.

You can find a template for recording any defects here.

Paying the rent conditionally

I urgently advise every tenant who wants to reduce his rent due to a defect not to simply reduce it directly. Instead, you should continue to pay the rent in full. At the same time, you should declare to the landlord that the rent is being paid “with a reasonable reduction subject to reclaim” in German: “Zahlung unter dem Vorbehalt einer angemessenen Minderung”. Approaching it like this makes sense from my point of view for various reasons:

The risk of your rent contract being terminated

If you carry out your rent reduction incorrectly, then you run the risk of having your rent contract terminated due to being in arrears with rent payments pursuant to Art. 543 (2) clause 1, fig. 3 BGB or pursuant to Art. 573 (1) and (2) fig. 1 BGB (see, for example, Termination in cases of unjustified reduction).

A reduction is never one hundred percent certain. If the case goes to trial later, the tenant is obliged to prove various facts. In addition, there are a number of different opinions concerning how high a reduction is appropriate. As the media likes to report about particularly spectacular reduction rates without considering the special features of the individual case, there is a real risk that the reduction will be set too high. Ultimately, even in the case of an obvious defect, there may still be legal aspects standing in the way of a reduction (one example worth mentioning is a ruling reached by the Berlin Regional Courts concerning a reduction due to noise from construction work on a neighbouring property, which you can read more about under current rulings).

According to a ruling by the Federal Court of Justice, the landlord can also give notice of ordinary termination in cases where the rent payments are in arrears that are less than two monthly rents. If a lawsuit then has to decide simultaneously about the reduction and the notice of termination, as a tenant you will often have to make compromises, which would not have been the case if you had reduced the rent in the proper manner.

Paying the rent conditionally avoids such problems. The reduction amount can then be claimed later in court and the court can decide what amount constitutes a reasonable reduction.

You decide how things continue

In addition, as a tenant you keep a firm hold of the way things go, that is, you decide when to take the matter to the courts.

It is also often advisable, if the landlord has rectified the defect promptly, to accommodate the landlord concerning the amount of rent that you reclaim.

It is also important in cases where the rent is being paid conditionally that the tenant be able to prove later that he did declare his reservation in this respect. If the tenant continues to pay the full rent despite the defect, without declaring that the payments are conditional, or without being able to prove this later, reclaiming the excess rent at a later date will be much more difficult at the least.

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If you are unable to reach an agreement with your landlord or you would like to obtain information about your rights as a tenant due to already existing defects, I am very happy to advise you.

 

“For the purposes of easier readability the texts are written using the male pronoun. The texts are, of course, addressed at and include all genders.”

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