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§ 543 German Civil Code (BGB) · § 569 German Civil Code (BGB) · Default in payment
Immediate termination due to rent arrears: from when it is effective
- The two thresholds of Section 543(2) of the German Civil Code (BGB) – with the lower limit for partial arrears
- Form, Access and Content: What a Termination Letter Must Include
- Why termination is always pleaded in the alternative as ordinary termination
- Grace period payment: what it cures – and what it doesn't cure
- 2Two months' rent arrears – termination is possible without notice
- 1Monthly rent: Lower limit for partial arrears
- 2Months' grace period from the date of commencement of legal proceedings
- 0Formal notices are necessary in the event of payment default
Prerequisites
When the threshold is reached
The law provides two grounds for termination without notice. Both refer to the gross rent, including agreed advance payments, not the net cold rent. Anyone who calculates this incorrectly terminates too early.
| Facts of the case | Prerequisite | Basis |
|---|---|---|
| Two consecutive appointments | Arrears with the rent or a not insignificant part on two consecutive dates | § 543(2) sentence 1 no. 3a German Civil Code |
| Lower limit „not insignificant“ | The outstanding amount exceeds one month's rent | § 569(3)(1) of the German Civil Code (BGB) |
| Period over more than two dates | Arrears amount to two months' rent in total | Section 543 (2) sentence 1 number 3b of the German Civil Code |
| Rent due date | by the third working day of the month at the latest | § 556b (1) of the German Civil Code (BGB) |
| Delay | occurs without warning | § 286 (2) No. 1 of the German Civil Code |
| Warning | in case of payment default, unnecessary | § 543 (3) sentence 2 no. 3 of the German Civil Code |
The decisive factor is the arrears at the time the notice of termination is received. If the tenant pays so much the day before that the threshold is no longer met, the notice of termination is invalid – even if they have been late for months. Part payments without an allocation instruction are applied to the oldest outstanding debt in accordance with § 366 (2) of the German Civil Code (BGB); this is usually the more favourable allocation for you, because it means the current arrears remain outstanding.
In commercial premises, § 569 para. 3 BGB does not apply. Both the lower limit of one month's rent and the grace period are missing. Termination is possible earlier and is not curable.
Form and access
What must be included in a termination letter
The termination without notice is a unilateral declaration. It takes effect the moment it is received – and it takes effect exactly as it is written. Nothing can be rectified later.
Written form, no email
Section 568(1) of the German Civil Code (BGB) requires written form with a handwritten signature. E-mail, fax and PDF are not sufficient. If the property is jointly owned by several people, all landlords must sign; the letter must be addressed to all tenants named in the contract – including a partner who has long since moved out.
Quantify the reason for termination
Section 569 (4) BGB requires the reason to be stated. This means specifically: month, rent due, payment made, outstanding amount – line by line, up to the total. A sentence like „You are significantly in arrears“ is not sufficient and makes the termination vulnerable.
To make access provable
Access under Section 130 of the German Civil Code (BGB) must be proven in the event of a dispute – by the landlord. A recorded delivery letter proves dispatch, but not necessarily its contents. A messenger who reads the letter, encloses it, and records this with date and time is certainly reliable.
Alternatively, terminate properly
Always in the same letter: „alternatively properly on the earliest possible date“, based on § 573 (2) No. 1 BGB. This is the most important sentence in the entire letter – it decides whether a subsequent grace period payment will end your proceedings or not.
Order
From the first open rent to the eviction notice
The process is always the same. What differs is the consistency with which deadlines are met. Each skipped stage costs time in court later on.
- 1Tag 4
Determine shortfall
Request a bank statement, reconcile the debit entries, allocate partial payments to the oldest outstanding claim. Continue this statement on an ongoing basis – it will later serve as an appendix to the termination notice and the lawsuit.
- 2Tag 5–10
Payment request with deadline
Legally not required, practically crucial: break down the arrears, set a payment deadline of ten to fourteen days, secure access. In a significant proportion of cases, this letter resolves the matter before costs are incurred.
- 3Weeks 3–6
Clarify the cause, form a prognosis
Job loss, illness, an ongoing application for citizen's income or simply unwillingness to pay – the reason determines the further course of action. Where an authority will cover the rent, a written instalment agreement with a forfeiture clause is more economical than any legal procedure.
- 4Tag X
Immediate termination, with ordinary termination as a backup
Once two months' rent is reached or two payment dates are affected: written form, all landlords, all tenants, specified arrears, alternatively ordinary termination. Set a vacation period of two to three weeks.
- 5Over 3 weeks
Eviction and payment action
Both in one lawsuit. Upon the commencement of litigation, the two-month grace period under Section 569 (3) No. 2 of the German Civil Code (BGB) begins. At the same time, an application for a security order under Section 283a of the German Code of Civil Procedure (ZPO) is worthwhile, so that rent accruing during the proceedings is deposited.
- 6+5 to 9 months
Title and Enforcement
Following the eviction order, you instruct the bailiff. An eviction limited to regaining possession under § 885a ZPO is considerably cheaper than a classic eviction with storage. The court can grant the tenant an eviction deferral of up to one year under § 721 ZPO.
A realistic timeframe between the first missed rent payment and the return of the flat is nine to fifteen months. During this period, no rent is received, and the flat cannot be re-let or handed over vacant.
Grace period payment
What the back payment heals – and what it doesn't
The most important difference in the entire law on payment default lies in two words: immediate and ordinary. Anyone who knows it will not lose a case due to a last-minute payment.
rent arrears paid in full no later than two months after the eviction lawsuit has been served – or a public body undertakes to pay them – the instantaneous Termination under Section 569 (3) No. 2 of the German Civil Code (BGB) is ineffective. The proceedings would therefore be terminated if you had only terminated the contract without notice.
The alternatively, duly explained Termination under Section 573 (2) No. 1 of the German Civil Code (BGB) remains unaffected by this. The Federal Court of Justice has confirmed this position on several occasions: The grace period payment is a statutory exception expressly created only for extraordinary termination. In addition, significant, culpably caused payment arrears justify ordinary termination – and the subsequent payment does not retroactively eliminate the breach of duty, but at most can be taken into account within the overall assessment.
Practical consequence: Without the auxiliary application, the game restarts after the back payment – and the next arrears usually build up again within a few months. With the auxiliary application, the proceedings continue, just with the longer notice period of § 573c BGB of three, six or nine months depending on the duration of the tenancy.
The grace period payment is also not repeatable at will. If such a cure has already preceded the termination within the last two years, it will not apply a second time (§ 569 Abs. 3 Nr. 2 S. 2 BGB). Therefore, document every back payment with the date – this proof is the decisive argument for repeat offenders.
Typical mistakes
Six reasons why redundancies fail
We see these points in almost every portfolio we take on. None of them are legally complex – yet each one costs a complete procedural cycle.
- Terminated too early. One and a half months' rent is not enough. Two months' rent must be reached or two consecutive dates must be affected. The premature termination is invalid – and the tenant will then know exactly where your limit lies.
- Outstanding balance not itemised. Without allocation by month, target rent, payment, and outstanding balance, the court cannot assess the threshold. A total sum without derivation does not support the termination.
- Not all contracting parties covered. If the separated spouse is still on the rental agreement, the notice of termination must also be served on them. If one is missing, the tenancy is not terminated – not for anyone.
- No subsidiary application for ordinary termination. The most expensive mistake of all. A payment just before the grace period expires will then end your entire proceedings, and you will bear the costs.
- Access not provable. Posting into the letterbox without witnesses is worthless if disputed. A witness, minutes, date, and time – that costs ten minutes and decides lawsuits.
- Further rents accepted without objection. After termination, you should explicitly book incoming payments solely as compensation for use under § 546a of the German Civil Code (BGB) and inform the tenant of this in writing. Otherwise, there is a risk of the objection that you have continued the tenancy.
Classification
What this means for your decision
The legal question will mostly be clarified in two weeks. The economic question remains.
Never calculate a default on payment in terms of open rent. Calculate it in months of non-use. For a flat with a monthly rent of 500 euros, twelve months of proceedings, two months of renovation and one month of re-letting amount to around 7,500 euros in lost rent – plus court, legal and enforcement costs and minus what is actually recovered from the judgment against a defaulting tenant in the end. In experience, this is very little.
This calculation is the reason why the question is different for a single apartment than for a multi-family house with three problematic tenants. One procedure can be carried out. Three parallel procedures tie up time, nerves, and liquidity on a scale that no longer adds up with a return of four to five percent – especially if the house already has a maintenance backlog and the bank continues to deduct its instalment unimpressed.
We are writing this from the buyer's perspective. The Rosenbaum Group owns its own apartment buildings and continuously acquires properties – including those with arrears, ongoing notices, or pending eviction proceedings. For us, such a procedure is not an exclusion criterion, but a factor in our calculation: We value the property in its current condition, take over the proceedings after the change of ownership, and continue them with our own legal department. For you, the main difference is one of timing: Instead of a twelve to fifteen-month procedure, a notary appointment awaits.
Whether this is the better solution for you depends on how many units are affected, how much debt you have outstanding, and whether you intend to keep the property long-term. If you want to persevere, the sequence that works is above. If not, you now know the alternative.
Frequently Asked Questions
Summary dismissal due to rent arrears – the most frequently asked questions
At what level of arrears am I allowed to terminate without notice?
If the tenant is in arrears with the rent or a non-insignificant portion for two consecutive payment dates – non-insignificant for residential property means more than one month's rent – or if the arrears reach a total of two months' rent over a longer period (§ 543 (2) Sentence 1 No. 3 BGB, § 569 (3) No. 1 BGB). The gross rent, including the agreed advance payments, is decisive.
Do I need to issue a warning beforehand?
No. In the event of payment default, a warning notice pursuant to Section 543 (3) sentence 2 no. 3 of the German Civil Code (BGB) is unnecessary. A quantified demand for payment with a deadline is nevertheless useful: it clarifies the figures, documents your claim, and resolves some cases without legal proceedings.
Is termination by email sufficient?
No. § 568(1) of the German Civil Code (BGB) requires written form with an autograph signature. Email, fax, or scanned PDFs are insufficient and render the termination invalid.
What happens if the tenant pays the back payment?
If he pays the full arrears within two months of the eviction notice being served, the immediate termination becomes ineffective (§ 569 para. 3 no. 2 BGB). The alternatively declared ordinary termination remains in effect. Therefore, the subsidiary application belongs in every termination letter.
How long until the flat is cleared?
From the first missed rent payment to the return of the flat, nine to fifteen months is realistic: a few weeks to reach the notice threshold, five to nine months for the first court proceedings, plus the eviction period and enforcement.
Can I sell the house while the proceedings are ongoing?
Yes. A purchase does not terminate a tenancy – the buyer takes over the tenancy agreement according to § 566 of the German Civil Code (BGB) and continues an ongoing eviction process. For buyers who are themselves landlords, a pending procedure is therefore not an obstacle, but a calculable item.
Alternative
Selling instead of concluding the procedure
We are not an estate agent and do not broker anything. The Rosenbaum Group buys multi-family properties for its own portfolio – with rent arrears, ongoing terminations, pending eviction proceedings. Tell us where you stand, and we will provide a specific response.
What suits your situation?
Where are you right now?
Non-binding, no commission, and no agency agreement. We are long-term holders – you speak directly with the buyer.
Sources and status of the data
- §§ 130, 286, 366, 543, 546a, 556b, 566, 568, 569, 573, 573c BGB – gesetze-im-internet.de
- §§ 283a, 721, 885a, 940a ZPO – laws-in-the-internet.com
- Ongoing case law of the Federal Court of Justice on the effect of payment within the grace period on the subsidiary ordinary termination
All information checked on 03.08.2026. This post does not replace legal advice for individual cases.
Further
Relevant posts and pages
- Tenant not paying – what to do – the full process from the first open rent to foreclosure.
- Guide for landlords – all contributions on tenancy law, market data and sales at a glance.
- Rosenbaum Group Real Estate Acquisition – Process of a direct sale to a portfolio holder, without an estate agent and without commission.
Resignation written, patience at an end?
We also buy with ongoing notice periods and pending eviction proceedings. A brief conversation is enough to clarify the current value of your property.