Instant termination of rental contract only possible “within an appropriate period of time”?
> December 2016

If a lodger gets into default of payment and the landlord, then pronounces the instant termination of the rental contract it is not necessary that the declaration of the termination of the rental contract has to be made within an “appropriate time period”. Since the reform of the German law of obligations in 2001, the question whether an instant termination has to be pronounced within an appropriate period of time in the sense of article 314 section 3 of the German Civil Code BGB has been widely and controversially discussed. This dispute should be over with the decision of the BGH dated 13.7.2016 (VIII ZR 296/15).

The forfeiture in special breach of trust remains the limit of the declaration period. Apart from that, a delay in the declaration of termination can only be evidence that an asserted unreasonableness of the continuation of the contract is not available and that the alleged reason for the termination is therefore not effective.

A limitation of the time period for the declaration of termination could tempt the landlord to declare a termination prematurely to avoid disadvantages to themselves. This would complicate an out-of-court-settlement.

In practice, this court decision is likely to mean mainly that the jurisdiction in the future would have problems to justify the forfeiture of termination rights. The litigants will have to recite more hereto.