For Owners

Owner's Occupancy: Guidelines, Deadlines, and Obligations for Landlords in Termination

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22.

November 2023

You have the desire to inhabit your currently leased property or plan to initially rent out an acquired property but eventually use it as your own home? In such scenarios, there is the option to terminate your tenants' lease due to owner's occupancy. However, this is not easily achievable. In this article, we aim to highlight what you need to consider and the rights and responsibilities you have in such a situation.

Criteria for Owner's Occupancy Termination

It's important to understand that not just any reason is sufficient for owner's occupancy termination. Section 573 (2) No. 2 of the German Civil Code (BGB) stipulates that landlords can use their rental property for themselves, members of their household, or family members. This includes:

  • (Step and care) children

  • (Care and in-law) parents

  • Spouses (even after separation or divorce)

  • Grandparents and grandchildren

  • Siblings, nieces, and nephews

  • Dependent family members and caregivers

Surprisingly, even after separation or divorce, the need for owner's occupancy can be claimed for the former spouse, as the Federal Court of Justice decided in 2020 that even after separation, spouses belong to the same family. However, for more distant relatives, the need for a close relationship may need to be demonstrated. You must present plausible reasons for the occupancy by yourself or the respective person.

Plausible Reasons for Owner's Occupancy Termination

Simply intending to use the property does not justify an owner's occupancy termination. Specific and comprehensible reasons must be provided to justify the need for owner's occupancy. For instance, a change in the workplace, now closer to the leased property, could be a plausible reason. Similarly, private circumstances like marriage, starting a family, separation, retirement, the death of a partner, or illness may necessitate a change in residence.

Not Possible Owner's Occupancy Terminations

It's essential to note that owner's occupancy is not viable if the property is only to be temporarily utilized. Decisions in this regard often vary from case to case. For instance, while an eighteen-month renovation of the currently occupied house could be considered justifiable, a two-year education program for the landlord's granddaughter was deemed an insufficient reason. Similarly, preemptive termination when owner's occupancy is not immediate but might occur in the future is not permissible.

Applicable Deadlines for Owner's Occupancy Terminations

Owner's occupancy terminations must adhere to specific statutory deadlines based on the duration of the current tenancy:

  • For a tenancy of less than five years, the notice period is three months.

  • For a tenancy lasting between five to eight years, the notice period is six months.

  • For a tenancy exceeding eight years, the notice period is nine months. These deadlines must be followed, and the termination notice must reach the tenants by the third working day of the calendar month to be valid.

Respectful Treatment of Tenants in Owner's Occupancy Cases

An owner's occupancy termination represents a significant change in the lives of tenants, often coming as a surprise. Therefore, it is advisable to initiate conversations early and provide tenants with as much lead time as possible. They may need to organize several things under such circumstances.

Conclusion

Owner's occupancy terminations are subject to numerous legal provisions and deadlines. Adhering to these can increase the likelihood of a successful termination. Nevertheless, bear in mind that it signifies a significant change for your tenants. Even though owner's occupancy termination is legally permissible, it should always be handled with respect and sensitivity.

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