The Local Court of Cologne addressed the question of whether a rent increase due to modernization after the conclusion of the lease contract, but before the start of the tenancy, is permissible (Case No. 201 C 92/22).
Facts – Rent Increase after Modernization
The plaintiff claims the repayment of a modernization surcharge paid monthly to the defendants from January 2019 to April 2022 inclusive.
The plaintiff rented a 2-room apartment with terrace, garden area, and parking space in an apartment building in Cologne from the defendants with a lease contract dated 06/2018, starting from 07/2018. At the beginning of the tenancy, a base rent of €700.00 plus €30.00 for a parking space and €195.00 advance payment for utilities was agreed, totaling €925.00.
In “§ 31 Special Agreements/Addenda” of the lease contract, the following handwritten entry is found:
1. In June 2018, a central heating and hot water system will be installed in the building. This modernization measure will result in a surcharge from October. The plaintiff has been informed about this by us.
In June 2018, a central heating and hot water system was installed. With a letter dated 28.08.2018, two months after the start of the tenancy, the defendants announced a modernization-based rent increase of €46.31 per month starting from January 1, 2019, based on § 559 Para. 2 BGB, along with the note that the plaintiff’s consent was not required for the payment of the new increased rent.
From 01.01.2019, the plaintiff paid the “surcharge” of €46.31 demanded in the letter dated 28.08.2018 due to the heating system, totaling €746.31 net rent plus €30.00 for the garage and advance payment for utilities.
On 23.03.2022, the defendants sent the plaintiff a rent increase request based on the 2021 rent index of the City of Cologne, which they later withdrew. In the letter, the defendants based their calculation on a monthly net cold rent of €653.69 plus a modernization surcharge of €46.31 per month, totaling €700.00 cold rent as the initial rent, and claimed an increase in the apartment’s cold rent by €65.00 to a total of €765.00 net.
The plaintiff believes that she has paid the surcharge of €46.31 per month since 01.01.2019 without legal basis, having erroneously assumed that she was obligated to do so. She believes that the increase with the letter dated 28.08.2018 was ineffective. Likewise, the agreement made in § 31 of the lease contract is without effect according to § 557 Para. 1 in conjunction with Para. 4 BGB.
The plaintiff requests,
to order the defendants to pay the plaintiff €1,852.40 plus interest at 5 percentage points above the base interest rate since May 14, 2022
to order the defendants to pay the plaintiff €280.60 plus interest at 5 percentage points above the base interest rate since the pendency of the lawsuit.
The defendants request,
that the claim be dismissed.
They are of the opinion that the rent increase of €46.31 is based on the individual contractual agreement made in § 31 under item 1. of the lease contract.
For further details of the facts and dispute, reference is made to the pleadings exchanged between the parties, including attachments.
Grounds for Decision; Rent Increase After Modernization Before Tenancy Start Impermissible
The lawsuit is admissible and well-founded.
The plaintiff has a claim against the defendants for payment of €1,852.40 based on § 812 Para. 1 S. 1 Alt. 1 BGB, as she paid the modernization surcharge of €46.31 monthly from 01.01.2019 to April 2022 inclusive (40 months x €46.31) to the defendants without legal basis.
The defendants undisputedly received the modernization surcharge paid by the plaintiff in the adjudicated amount during the aforementioned period. From the relevant perspective of the defendants, this occurred through the plaintiff’s performance, i.e., through a conscious, purposeful increase in the defendants’ assets, as the plaintiff intended to fulfill her – presumed – rent payment obligation to the defendants in this amount according to § 535 Para. 2 BGB.
However, the payment was made each time without legal basis, as the plaintiff was not obligated to pay the modernization surcharge of €46.31.
The rent increase declaration stated in the letter dated August 28, 2018, according to Section 559 Paragraph 1 of the German Civil Code (BGB) was invalid because it was based on a modernization measure that – according to the declaration itself and the mutual statements of both parties – had already been carried out in June 2018. At this time, the parties had indeed concluded the rental agreement, namely on June 9, 2018. However, the tenancy only began on July 1, 2018. For this reason, a rent increase according to Section 559 BGB was not possible. This is because Section 559 BGB requires that the measure be carried out during the rental period. In this case, the heating system was renewed before the start of the rental period, resulting in the unilateral increase declaration of August 28, 2018, issued in accordance with Section 559 BGB, being invalid for this reason alone. Against this background, the question of whether the measure was announced in a timely and sufficient manner is irrelevant.
The payment of the increased rent from January 1, 2019, also does not carry any declaratory content in the sense of a declaration of intent. A reinterpretation into a contract concluded during the rental period according to Section 557 Paragraph 1 BGB based on the letter of August 28, 2018, to which the defendant could have agreed by paying without reservation, is not possible. This is because if the landlord unilaterally declares a rent increase according to Section 559 BGB, the tenant’s unconditional payment cannot be seen as an acceptance of a contract. Here, there is already a lack of a recognizable contract offer from the landlord for an objective recipient. This is also the case here. In the increase declaration, the defendants explicitly pointed out that the plaintiff’s consent was not required for the payment of the new increased rent. Therefore, the letter of August 28, 2018, cannot be seen as a contract offer from the defendants. Against this background, it cannot be assumed that the plaintiff intended to change the contract by paying the allocation, but rather that she merely wanted to comply with the defendant’s supposed unilateral right to increase (Artz, NZM 2005, 367 (370)).
Finally, there is also no legal basis in the rental contract provision under Section 31 No. 1 of the rental agreement. An effective agreement on a modernization allocation or an effective contractual consent of the plaintiff to claim such an allocation deviating from the legal requirements of Section 559 BGB cannot be seen in this clause, even when considering the circumstances of the contract conclusion. Because this agreement, even if one were to see in it more than just the announcement of a modernization allocation, is invalid according to Section 557 Paragraph 1 in conjunction with Section 557 Paragraph 4 BGB.
Section 557 BGB explicitly defines the framework of what is legally possible. While according to Section 557 Paragraph 1 BGB the parties can freely agree on an increase in rent during the tenancy, future changes in the rent amount can only be agreed upon by the contracting parties according to Section 557 Paragraph 2 BGB as a stepped rent according to Section 557a BGB or as an index-linked rent according to Section 557b BGB, and otherwise, the landlord can only demand rent increases according to Section 557 Paragraph 3 BGB in accordance with Sections 558 to 560 BGB. Regulations made between the parties before the conclusion of the rental agreement are therefore invalid according to Section 557 Paragraph 1, Paragraph 4 BGB The disadvantage arises from an assumed special pressure situation of the tenant for this period (Heilmann in: Herberger/Martinek/Rüßmann/
Against this background, the clause cited by the defendants as the legal basis for the modernization in § 31 of the lease agreement is ineffective and thus null and void from the beginning, with the consequence that the defendants are obliged to repay according to §§ 812 ff. BGB (Staudinger/J Emmerich (2021) BGB § 557, margin no. 80 f).
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