"Colour choice clauses" in residential leases are invalid

The 8th Civil Senate of the Federal Court of Justice (BGH), which is responsible for residential tenancy law, has now ruled that a clause in a residential tenancy agreement which transfers the obligation to carry out cosmetic repairs to the tenant by way of form may be invalid.

In the case to be decided, the tenancy agreement contained the following clause, among others: "The cosmetic repairs are to be carried out in neutral, opaque, light colours and wallpapers".

The plaintiff considered this clause to be invalid. She therefore applied for a declaration that the defendant was not contractually entitled to have cosmetic repairs carried out. The District Court of Pankow/Weißensee dismissed the action in its judgement of 06.12.2006 - Ref. 7 C 302/06. The plaintiff's appeal before the Berlin Regional Court, judgement of 25 June 2007 - file no. 62 S 341/06 - was successful, however. The Federal Supreme Court has now rejected the defendant's appeal, which was allowed by the Court of Appeal.

In its decision, the Federal Supreme Court (BGH) found that the "colour choice clause" used unreasonably disadvantaged the tenant and that his obligation to carry out the cosmetic repairs as a whole was invalid pursuant to Section 307 (1) sentence 1, (2) no. 1 BGB. The BGH justified this opinion by stating that the clause required the tenant to use light, opaque and neutral colours for the cosmetic repairs not only at the time of the return of the flat, but already during the rental period. Against the background of an intended re-letting, the tenant could not be denied a justified interest in receiving the flat back at the end of the tenancy in a colour scheme that would be accepted by as many prospective tenants as possible. However, there was no recognisable interest on the part of the landlord in the tenant having to forego other designs, whether in colour or not, already during the current tenancy period. For this reason, the Federal Supreme Court held the colour selection clause used in the case at issue to be invalid.

Due to this ruling of the Federal Court of Justice, numerous tenancy agreements are likely to have ineffective cosmetic repair clauses or ineffective colour choice clauses. If you as a landlord have concluded tenancy agreements with such a colour choice clause with your tenants, you should seek advice from a lawyer on this point to avoid future disputes.

Source: Press release No. 115/2008 of the Press Office of the Federal Supreme Court of 18 June 2008, Herrenstr. 45 a, 76133 Karlsruhe, Tel. 0721-159-5013, Fax. 0721-159-5501, E-mail pressestelle@bgh.bund.de.

Attorney at Law Michael Ullrich, LL.M. (Information Law)

Goldberg Attorneys at Law, Wuppertal - Solingen 2008 - E-mail m.ullrich@goldberg.de