Limits to Freedom of Contract in Rental Agreements

German law follows the principles of freedom of contract when drafting rental agreements. This means landlords and tenants are free to add their own provisions beyond the statutory framework. One example is transferring cosmetic repairs to the tenant during the tenancy.

The limits of this freedom are governed by Section 307 of the German Civil Code (BGB), which addresses unreasonable disadvantage to a contracting party. If this threshold is met, a clause in the rental agreement may be invalid despite valid signatures from both parties.

Cosmetic Repairs Frequently Occupy the Federal Court of Justice

A significant area of invalid contract clauses disadvantaging tenants involves so-called cosmetic repairs (Schönheitsreparaturen) or tenant renovation obligations. Being required to renovate the apartment upon moving out may be written into the contract yet still be legally unenforceable.

The Federal Court of Justice (BGH) in Karlsruhe makes final decisions on whether contractual provisions comply with the law. The following examples show that the BGH has frequently strengthened tenant rights in past rulings.

Moving Out Does Not Necessarily Trigger a Cosmetic Repair Obligation

Cosmetic repairs that tenants are contractually required to complete before moving out typically include painting or wallpapering walls, and sometimes varnishing doors, door frames, or radiators.

A 2018 BGH ruling (VIII ZR 277/16) clarified that the tenant was not obligated to perform cosmetic repairs before handing over the apartment because the property was handed over unrenovated at the start of the tenancy. The contractual obligation the tenant had signed was therefore void.

Clauses with Strict Color Requirements Are Invalid

As early as 2008 (VIII ZR 224/07), the BGH ruled that clauses requiring specific colors for painting are also invalid. Painting is not limited exclusively to white or light tones. During the tenancy, tenants are free to paint individual rooms or the entire apartment in bold colors.

Tenants May Be Liable for Damages

Cosmetic repairs that tenants are legally required to perform serve the purpose of restoring the original condition before re-letting. If the apartment was rented in light, neutral colors, the landlord is entitled to expect these repairs from the tenant. A BGH ruling from November 6, 2013 (VIII ZR 416/12) grants landlords a damages claim when they find rooms in bold colors or with other decorative elements after handover.

No Requirement to Hire Professionals

Another invalid clause involves requiring tenants to hire a professional painting company before moving out. In a 2010 ruling (VIII ZR 294/09), the judges concluded that the term "professionally executed" does not necessarily mean the tenant must hire a painter at their own expense. However, when doing the work yourself, you must ensure it leaves a professional impression on the landlord.

The Renovation Obligation Faces High Legal Hurdles

BGH rulings on cosmetic repairs generally address which tasks before moving out fall under tenant or landlord responsibility. For all work beyond painting and wallpapering, there are narrow legal boundaries before a renovation obligation arises for the tenant.

Unrenovated Properties Are Exempt from Renovation Obligations

The prerequisites for a tenant renovation obligation begin on the first day of the tenancy. If the tenant receives an unrenovated apartment, clauses in the rental agreement requiring cosmetic repairs or renovations from the tenant are not enforceable.

In 2015 (VIII ZR 185/14), the Karlsruhe judges ruled that landlords are not entitled to "over-renovation"—meaning landlords have no right to receive the apartment back in better condition than when the tenant moved in.

Tenants Bear the Burden of Proof

Whether a tenant must renovate when moving out also depends on whether they can prove the apartment was unrenovated at handover. In January 2024 (VIII ZR 43/23), the BGH established that tenants contesting cosmetic repair and renovation clauses in their rental agreement must provide evidence of the unrenovated condition at move-in.

Proper Handover Follows Legal Guidelines

The handover of a rental apartment plays a crucial role in avoiding later legal disputes about the property's condition. The BGH has also provided legal clarity in recent years on how tenants and landlords should conduct themselves when ending a tenancy.

Tenant Obligations According to the BGH

A proper apartment handover requires the property to be returned empty and "broom-clean" (besenrein). This means tenants must remove all their belongings by the end of the tenancy, including from basement storage and attic spaces. A 2006 ruling (VIII ZR 124/05) defines "broom-clean" as removing all visible coarse soiling. A complete deep cleaning before the next tenant moves in is the landlord's responsibility.

Handover Protocols Serve as Evidence

The apartment's condition at move-out, including any cosmetic repairs by the tenant, is documented in a handover protocol. Both tenant and landlord have the right for this handover to occur in daylight to maximize the chance of identifying all defects. Additionally, it is legally advisable to take photos or video recordings to have evidence for later disputes. Signatures from both parties strengthen the document's legal validity. Creating two copies on-site protects both parties from subsequent alterations to the protocol. Defects discovered later are accordingly no longer the former tenant's responsibility.

Rechts-Update

Rechtssicher modernisieren und verwalten – ohne Stolperfallen. Bleib mit unserem Newsletter immer auf dem neuesten Stand der Gesetzgebung.

​

Anmelden