How to apply the (new) right of revocation to tenancy law
> October 2014
Since June this year, consumers have a right of revocation when concluding distance contracts and contracts outside the entrepreneur's business premises. For this reasons, tenants have the right to withdraw their declarations of intent without any reason up to 14 days after having concluded a tenancy agreement and when subsequently amending contracts and acceptance certificates by mutual consent; Sections 312 para. 4 sentence 1, 312 para. 3 no. 7, 312g para. 1, 355 para. 1, 355 para.1 German Civil Code.
As a rule, all distance contracts and contracts are affected which have been concluded outside the entrepreneur's premises.A distance contract is given if the contract constitutes a consumer contract. In case of a consumer contract, an entrepreneur concludes a tenancy agreement with the tenant as consumer within the scope of the entrepreneur's commercial or independent professional activity. The contract negotiations and conclusions of contract must have been exclusively made by means of distance communication (letters, telephone, email, SMS, etc.). The contract must have been concluded within the scope of a sales or service provision scheme which is organised for distance sales. Usually, this can be assumed (even with landlords who own only a few flats) if the landlord consults an administrator.
A contract outside the entrepreneur's business premises is given if the contract is being concluded while entrepreneur and consumer are physically present at a place which is not an office of the entrepreneur.
Now, the landlord is obligated to inform the tenant about his right of revocation. For this purpose, the legislator has provided model powers of revocation as well as model revocation forms in the German Federal Law Gazette (Bundesgesetzblatt), which are also electronically available on www.bgbl.de (Bundesgesetzblatt Teil 1/BGBl. Online/2013/No. 58/page 3642). The landlord does not necessarily have to use the form. It is crucial that it becomes clear that he wants to revoke his declaration. As the burden of proof regarding the instruction is on the landlord, it is advisable to have receipt of the power of revocation confirmed. In principle, revocations are not subject to any formal requirements.
If a new tenancy agreement is concluded, power of revocation and, consequently, the duty to instruct are not given if all tenants have viewed the flat before; Section 312 para. 4 sentence 2 German Civil Code.
If the agreement is revoked, all mutually received performance is to be restituted after 14 days at the latest; Section 357 para. 2 German Civil Code. The period begins for the entrepreneur when he has received the declaration of revocation and for the consumer when he has expressed it; Section 355 para. 3 German Civil Code.
If no powers of revocation have been made, the revocation period does not commence; Section 355 para. 3 sentence 1 German Civil Code. The power of revocation expires not later than twelve months and 14 days after having concluded the agreement; Sections 356 para. 3 sentence 2, 355 para. 2 sentence 2 German Civil Code.
