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Cosmetic repairs – Obliging a tenant to renovate is only possible to a limited extent

Last year, the so-called renovation clause received a lot of media attention on account of a ruling by the Federal Court of Justice (Bundesgerichtshof, BGH). The Krefeld Regional Court (Landgericht, LG) further developed this case law to the detriment of landlords in a tenancy law dispute that is described in the following section.

The ruling of 25.8.2021 (case reference: 2 S 26/20) related to a case where the tenants had moved into an unrenovated apartment about four and half years previously. Inside the apartment, special borders had been affixed and unusual wall paints and patterns had also been chosen. These decorations dated back to the time of the previous tenancy and the current tenants had agreed that the decorations could remain unchanged. The current rental agreement provided that the tenants were obliged to carry out repairs or have them carried out at their own expense in the rental property. That should however only be needed insofar as this was made necessary as a result of the use of the rented property by the tenants. While taking the degree of wear and tear into consideration they were supposed to carry out cosmetic repairs at regular intervals of five, eight and ten years. Returning the apartment with a coat of paint in neutral colours would only be required in the case where the tenants had changed the colour scheme. The matter in dispute for both parties was that the landlady was demanding that the cosmetic repairs be carried out and was withholding the security deposit. The tenants filed a lawsuit to recover the security deposit and took the matter to court.

The LG had a clear view – even if the BGH had previously approved flexible time schedules, nevertheless, clauses with such time schedules breach the rule in Section 309 no. 12 of the German Civil Code. This is because the tenant would then have to prove that there was no need for renovation. However, it cannot actually be presumed either from an expert point of view or an empirical perspective that there will be a need for renovation after certain periods of time have elapsed. According to the BGH ruling, in the event of a dispute this would however ultimately not be important because a standard clause concerning the passing on of the obligation to carry out cosmetic repairs would only be possible in the case of an apartment that had been renovated. Moreover, in the case of an unrenovated apartment, this rule would only apply if the landlord paid the tenant adequate compensation. That is why, in this case, the tenants were not obliged to renovate the apartment and the landlady had to pay out the security deposit to them.

Please note: It is not even possible to transfer the renovation obligation to tenants in pre-formulated rental agreements unless the rented apartment is handed over in a renovated state. This is a principle that landlords should observe and tenants should be aware of.

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