HOW TO GET OUT OF GERMAN LEASE AGREEMENT PREMATURELY

Temporary leases or exclusion of the termination right can be a very inconvenient stipulation in German lease agreements when you are assigned a new job by your employer. Unfortunately, we see this practice very often now as a reaction to last year's change in law about the real estate agent's commission. Landlords are even more interested in long-term contracts since the commission is to their account only nowadays.

For the respective clause to be valid and effective certain conditions need to be complied with. These conditions are higher for limited term leases as the reasons for the limitation must be listed in the rental agreement and the reasons must be compliant, ie. the owner's own need to live in the apartment. In a case termination is excluded this must work both sides and it cannot be agreed for longer than 4 years. The temporary lease agreement by nature is binding for both parties.

A possibility to reduce the risk is the so-called new tenant clause.

The Red Relocators can help negotiate this.

  • With a "real" new tenant clause ( "Der Mieter ist berechtigt/ermächtigt, das Mietverhältnis auf einen Nachfolger zu übertragen." ie, the tenant is entitled / authorized to transfer the lease to a successor.) the tenant is entitled to assign the contractual rights and obligation to the successive tenant without the necessity for the landlord's acceptance of the same. This is the most tenant-friendly version and rarely seen.
  • A fake tenant clause ( ""Der Mieter ist berechtigt, das Mietverhältnis vorzeitig mit einer Frist von drei Monaten zu kündigen, wenn er dem Vermieter mindestens drei wirtschaftlich und persönlich zuverlässige zum Bezug der Wohnung berechtigte Ersatzmieter vorschlägt, die bereit sind, das Mietverhältnis für den Rest der Mietdauer fortzusetzen, und wenn der Vermieter sich weigert, einen der benannten Ersatzmieter in das Mietverhältnis eintreten zu lassen.", ie. The tenant is entitled to terminate the tenancy prematurely with a notice period of three months, when he proposes the landlord at least three economically and personally reliable successive tenants willing to enter in the existing lease agreement and replacing the current tenant.)  grants the tenant to be released from its obligations under the lease agreement by the landlord, but the landlord is not obliged to sign the contract with the successive tenant. This clause is easier to argue for, however, we have seldomly seen landlords accepting either clause.

Alternative approaches

If you do not succeed in negotiating the new tenant clause into your lease agreement, they are still circumstances where the landlord has to release you prematurely:

  • Change of Job: A change of job is not in itself a reason for the tenant to terminate the lease prematurely by extraordinary notice . However, the change of job can be a judicially recognized an important reason which forces the owner to release his tenant from the contract . This is the case if it can not reasonably be expected that the tenant commutes to his new job from the previous apartment. Crucial is thus the distance and regular traffic conditions.
  • Present a successive tenant: If the above is a given, then the subsequent condition is that the tenant can provide a suitable tenant who enters into the current lease agreement with the terms and conditions unchanged. Not every tenant must be accepted by the landlord , but the tenant for the landlord must be reasonable.

A successive tenant is reasonable, if

  • he is willing to accept the existing agreement unchanged.
  • Further, he must be financially able to continue the lease to the previous conditions.

The landlord may only refuse a successive tenant for important reasons, such as relating to the person or the economic situation of the successive tenant.

The question of reasonableness can be avoided by a new tenant clause. Likewise, whether a distance is unreasonable or still feasable.

According to court law, the owner has to decide within 3 months whether the proposed new tenant is acceptable for him. While the landlord is not obliged to conclude the lease agreement with an, in the aforementioned sense "acceptable" successive tenant. However, he is obliged to release you from your obligation to pay the outstanding rent under the contract from the point in time at which the successive tenant was willing to sign the agreement.

Legal sources: LG Hamburg, 7.3.1980 - Az: 11 S 257/79, OLG München, 8.9.1995 - Az: 21 U 6375/94, Blank/Börstinghaus, Das gesamte BGB-Mietrecht, Kommentar 2. Aufl., Rn. 166, 169.

 

In case the landlord objects to your request to accept a successive tenant searched by you - which he may whish to in case he wants to choose the new tenant from a broader selection base than just your suggestion, ie. engage a real estate agent himself, than in such case it is assumed that he accepted your release from the contractual obligations after 3 months from the respective declaration by the landlord.

Should you experience difficulties in finding acceptable successive tenants, then the landlord must give permission to sublet the apartment. Subletting must be approved by owner - however, it cannot be rejected without reason. In cases where the owner's withholding or declining is groundless, the lease agreement can be terminated with a 3 - months notice period. This court law applies for both situtations - where a limited period was agreed for the lease period or where a waiver of the cancellation right was agreed.  Important to remember: with a sublet situation, you remain responsible for the apartment.

As a consequence, you should therefor start looking for a successive tenant, be it for replacement or sublet, as soon as possible - ready to present to the landlord latest 3 months before you intend to leave the apartment.

Posted in Accommodation.