Right of retention of the tenant in case of defects

Right of retention of the tenant in case of defects / Zurückbehaltungsrecht des Mieters

September 21, 2023

The tenant's right of retention is an interesting right for tenants, but one that is (too) rarely used without legal advice. This is not to be confused with the right to reduce the rent.

What is a right of retention?

The tenant's right of retention follows from section 320 of the German Civil Code (BGB), the so-called "defence of non-performance of contract". The party entitled to a right of retention can refuse performance until the other party performs on your part.

Right of retention in tenancy law:

Defects in the rented property

The tenant must inform the landlord/landlady immediately of any defects in the rented property. This is in the interest of the tenant, who usually wants the defect to be remedied immediately in order to have a defect-free rental object again, as well as in the interest of the landlord/landlady, whose duty it is to ensure that the rental object is free of defects, section 535 (1) BGB.

However, it may happen that the landlord/landlady does not immediately restore the rented property. In this case, the tenant can either restore the rented property himself/herself (tenant's right of self-remedy) or reduce the rent. The contract is not fulfilled on the part of the landlord/landlady, because he/she does not fulfil his/her duty of maintenance (and thus of remedying defects). In these cases, the tenant can also assert a right of retention with regard to the rent. This means that he/she is not obliged to pay his/her rent due to the landlord's/landlady's non-performance.

Withholding part of the rent

Whereas in the case of a rent reduction the amount owed by the tenant is "automatically" reduced to an amount which is reasonable for the defective rented property, the landlord/landlady is therefore not entitled to the full rent payment, the landlord/landlady does not lose his/her claim to rent payment when exercising the right of retention. The claim to payment of rent is only unenforceable for the moment, in legal terms "inhibited". The assertion of the right of retention must be notified by the tenant.

Consequences of the right of retention

In this respect, the right of retention does not seem to have any practical advantages for the tenant compared to the reduction of rent. The difference is, however, that the right of retention is not limited to the reduction rate. According to the Federal Supreme Court, there are no rigid limits, but an unlimited assertion of the right of retention is excluded (BGH, judgement of 17.06.2015 - VIII ZR 19/15). However, case law allows the tenant to withhold 3 to 5 times the amount of the reduction quota in the event of a defect, which is why the right of retention (especially in the case of low reduction quotas) can affect the landlord/landlady much more severely than a mere rent reduction. If, for example, the rent is to be reduced by 10% due to a rather minor defect, the tenant will only owe 90% of the agreed rent in the case of a rent reduction. However, the tenant may also withhold up to 50% of the rent in order to urge the landlord/landlady to remedy the defect immediately. However, the tenant must pay the amount exceeding the reduction quota to the landlord/landlady after the defect has been remedied. The right of retention can also be asserted in addition to the rent reduction - the tenant does not have to choose one of the two. Thus, with a 10% reduction rate, he/she could withhold 50% of the rent and reduce it by 10%, i.e. he/she would only be obliged to pay 40% of the rent.