The cancellation of sale

As long as tenants fulfil their obligations in the tenancy agreement and pay their rent on time, they hardly need to worry about termination. A special situation is required for this. This includes, for example, what is known as a notice of termination by the landlord. What is this all about and what do you need to bear in mind?

What is a realisation notice?

The landlord can give notice of termination if it is no longer economically viable to let the property. According to the German Civil Code, this is the case "[...] if the landlord would be prevented from making appropriate economic use of the property by continuing the tenancy and would suffer considerable disadvantages as a result [...]".

However, various requirements must be met for this: Firstly, the landlord must state the reason for utilising the property for other purposes. This includes, for example, that he wishes to renovate or modernise the property, sell it or combine several residential units. Another reason may be that the landlord wishes to demolish the building and replace it with a new building. In addition, the new utilisation must be reasonable and appropriate for the property - appropriate in cases where the landlord has to pay off debts or wants to create new living space, for example. If the landlord is prevented from doing so by the tenancy agreement and suffers economic disadvantages, this may result in a realisation notice.

When is a realisation termination ineffective?

Firstly, the landlord must observe the notice period. This is normally three months, but can also be extended. If the tenant has lived in the property for more than five years, the notice period is six months, or even nine months if the tenant has lived there for more than eight years. In addition, the notice of termination must be received in writing by the third working day of the month at the latest.
It happens relatively frequently that realisation notices are invalidated in court. In order to protect tenants from profit maximisation and speculation, the legislator has introduced various protective measures. For example, a realisation notice is not valid if the landlord merely wants to re-let the property at a higher price. Even if one or more residential units have already been converted into condominiums, or if this is imminent, such a cancellation does not apply.
In many cases, the economic realisation in particular can be challenged in court. Landlords should document all steps, such as cost estimates, offers or building enquiries, in detail.