The Federal Court of Justice (Bundesgerichtshof, BGH) has ruled that the tenant may assert a right of retention due to a defect in the flat of which the landlord has no knowledge only in respect of the rents that become due after the tenant has notified the landlord of the defect.
The defendants are tenants of a flat of the plaintiff in Berlin-Zehlendorf. They paid no rent for the months of April, June and July 2007 and only part of the rent for May 2007. In a letter dated 5 June 2007, the plaintiff declared termination without notice due to default in payment. The defendants objected to the termination in a letter of 14 June 2007, referring to a mould infestation in several rooms.
In his action, the plaintiff sought, among other things, eviction and restitution of the flat. The district court granted the action for eviction. The Regional Court (Landgericht) amended the first instance judgement and dismissed the action for eviction. It held that the tenants were not in default with the payment of rent because they were entitled to have this defect remedied, notwithstanding the failure to report the mould infestation, and they could invoke a resulting right of retention regarding the payment of rent.
The plaintiff's appeal against this ruling was successful and led to the reinstatement of the first instance eviction ruling. The VIII Civil Senate of the Federal Court of Justice, which is responsible, inter alia, for residential tenancy law, ruled that a right of retention of rent payments by the defendant was excluded. Civil Senate of the Federal Court of Justice, which is also responsible for residential tenancy law, ruled that a right of retention of the defendants for rent payments owed for a period prior to the notification of the mould infestation of the flat - which was not previously known to the landlord - cannot be considered. The right of retention under § 320 BGB serves to exert pressure on the debtor (here: the landlord) to fulfil its own obligation. As long as the landlord is not aware of a defect, the right of retention cannot fulfil its function of inducing the landlord to remedy the defect. The tenant's right of retention therefore only exists in respect of the rents falling due after notification of the defect.
*§ Section 320 BGB reads (as of 08.11.2010): Plea of non-performance of contract
(1) A person who is obliged under a mutual contract may refuse to perform until the consideration has been received, unless he is obliged to perform in advance. (...)
Judgment of the Federal Supreme Court of 3 November 2010 - VIII ZR 330/09
AG Schöneberg - Judgment of December 5, 2007 - 12 C 368/07
Berlin Regional Court - Judgment of November 6, 2009 - 63 S 17/08
Source: Press release of the BGH
Goldberg Attorneys at Law 2010
Attorney at Law Michael Ullrich, LL.M. (Information Law)
Specialist attorney for information technology law (IT law)