If a tenant fails to pay rent or does not pay it in full, this can have significant legal consequences. In particular, such a payment arrears may entitle the landlord to terminate the lease agreement extraordinarily and without notice. However, certain legal requirements must be met for this to occur. Both landlords and tenants should therefore be aware of the threshold for rent arrears that triggers termination, the options available to prevent termination, and the steps required if the tenant does not vacate the apartment despite the termination notice.
The legal requirements for termination without notice due to late payment are set forth in particular in Section 543(2), Sentence 1, No. 3 of the German Civil Code (BGB) as well as the supplementary provisions of Section 569 BGB for residential leases. The law distinguishes between two different scenarios, which are often confused with one another in practice. The decisive factor is not only the amount of the outstanding rent payments but also the period over which the arrears extend.
The first scenario involves a payment arrears spanning two consecutive rent due dates. For example, if the tenant fails to pay the rent for January and also falls behind on part of the February rent, termination without notice may already be justified. In residential lease agreements, the total arrears in this case need only exceed one month’s rent. If, for example, the monthly rent is 1,000 euros, a payment arrears of 1,000.01 euros may therefore be sufficient if it is spread across two consecutive payment dates. It is thus by no means necessary for the tenant to owe two full months’ rent.
The second scenario involves rent arrears over a longer period. If, over a period spanning more than two rent payment dates, the tenant falls behind on payments totaling two months’ rent, the landlord may also terminate the lease without notice. In this case, the arrears do not have to have occurred in immediately consecutive months. For example, it is sufficient if the rent for January and March is not paid in full. Even several smaller arrears can add up over a longer period to a total amount that justifies termination.
This distinction is particularly important for landlords. It is often assumed that termination without notice is generally permissible only when arrears amount to two full months’ rent. However, this is not correct. Especially when two consecutive payment deadlines are missed, the relevant threshold can be reached considerably sooner. Conversely, tenants should not assume that individual incomplete rent payments will have no consequences as long as they make full payments in between.
If the legal requirements for termination without notice due to late payment are met, the landlord generally does not need to issue a prior warning to the tenant. This distinguishes a qualified default in rent payment from other breaches of the lease agreement, which typically require a warning or an opportunity to remedy the situation first. Termination of a residential lease must be declared in writing and must clearly state the applicable grounds for termination. In particular, the outstanding rent payments and the period to which they relate should be clearly specified.
A termination without notice that has already been issued may, under certain conditions, be rendered ineffective by a subsequent payment. For residential leases, Section 569(3)(2) of the German Civil Code (BGB) provides for a so-called “grace period payment” in such cases. In principle, the tenant has until the end of a two-month period following the commencement of legal proceedings for eviction to fully settle the relevant payment arrears. In practice, this period typically begins upon service of the eviction complaint. A corresponding obligation by a public authority to settle the arrears may also suffice.
However, this option is limited by law. In particular, the grace period provision does not apply again if, within the preceding two years, a termination without notice has already been rendered invalid due to a corresponding grace period payment. Furthermore, it is crucial that the arrears required by law be paid in full. A mere partial payment is generally insufficient. It is therefore important for tenants, in the event of an impending or already issued termination, to have the actual amount of the payment arrears and the available options for action reviewed as early as possible.
The distinction between termination without notice and ordinary termination is also particularly significant. In cases of substantial rent arrears, landlords often not only issue an extraordinary termination without notice but also, as an alternative, an ordinary termination due to a culpable, non-trivial breach of obligations under the lease agreement pursuant to Section 573(2)(1) of the German Civil Code (BGB). This can have significant consequences: While a valid payment made within the grace period generally nullifies the termination without notice, it does not automatically nullify a termination with notice issued at the same time. The Federal Court of Justice has repeatedly confirmed this in its case law, most recently in its ruling of September 30, 2026 (Case No. VIII ZR 21/26). Whether the ordinary termination is effective in a specific individual case must be examined on its own merits. A retroactive payment therefore does not necessarily mean that the tenancy can continue.
Another important issue concerns outstanding back payments from operating expense statements. Under certain conditions, these too can justify termination without notice. However, additional claims for operating expenses must be treated differently under the law than regular monthly rent payments. They generally do not fall directly under the specific grounds for termination due to current rent arrears under Section 543(2), first sentence, No. 3 of the German Civil Code (BGB). However, termination may be considered under Section 543(1) of the German Civil Code (BGB) if the payment arrears are so substantial that the landlord can no longer reasonably be expected to continue the lease.
In the case of outstanding service charge claims, an arrears amounting to at least two months’ rent, in particular, may constitute a compelling argument for extraordinary termination. However, this is not a rigid statutory threshold; rather, it depends on the circumstances of the individual case. Unlike in cases of qualified default on current rent, an unsuccessful written warning or a reasonable deadline for remedy is generally required first, unless there are exceptional statutory grounds for waiving this requirement. Landlords are therefore advised to first clearly assert outstanding service charge claims, set a reasonable payment deadline, and point out the possible consequences of continued nonpayment.
If the tenant fails to move out despite a valid termination, the landlord must, if necessary, enforce his right to eviction through the courts. Unauthorized eviction from the apartment is generally not permitted. Rather, an action for eviction must be filed with the competent local court. In the subsequent proceedings, the court will examine, in particular, whether the alleged payment arrears actually existed, whether the statutory requirements for termination were met, and whether the termination was declared valid both in form and substance. If, in addition to termination without notice, a termination with notice was issued as an alternative, its validity must also be assessed, if applicable.
If the court concludes that the tenancy was validly terminated and the landlord has a corresponding claim for surrender of the premises, it may order the tenant to vacate and surrender the apartment. If the tenant does not vacate voluntarily even after such a judgment, eviction may be enforced through compulsory execution. For landlords, therefore, careful preparation of the notice of termination is particularly important. Errors in calculating rent arrears, in the wording of the notice of termination, or in the legal classification of individual claims can lead to significant delays and additional costs.
Tenants also have options to defend themselves against a termination without notice due to late payment. This is particularly true if rent payments were not reduced without cause. If there are significant defects in the apartment, the tenant may be entitled to a rent reduction under § 536 BGB under certain conditions. If the rent reduction is lawful, there is no rent arrears with respect to the amount lawfully withheld. A termination based on such a reduction may therefore be invalid.
However, in the event of a dispute, the conditions for a rent reduction must be clearly demonstrated and, if necessary, proven. In particular, the tenant must specify the specific defects and the resulting impairments to the contractual use of the property. In addition, the legal obligations to report defects must be observed. Anyone who unilaterally reduces the rent by an excessive amount risks creating a payment arrears situation that could justify termination, even if a defect actually exists. A rent reduction should therefore not be implemented without first verifying the legal requirements and determining an appropriate amount.
Even if a notice of termination has already been issued, a thorough legal review may reveal that the conditions for default on payment were not met or that the termination is invalid for other reasons. In addition to the question of whether all claims actually existed and were due, factors such as payments already made, set-off options, or justified rent reductions may be relevant. In the case of a notice of termination with notice, it must also be examined whether there has been a culpable, non-trivial breach of duty.
The following therefore applies equally to landlords and tenants: A termination without notice due to default on payment is a drastic legal measure whose requirements and consequences should not be underestimated. Landlords should precisely calculate the arrears and choose a legally sound course of action before issuing the termination notice. Tenants, in turn, should under no circumstances ignore payment arrears or termination notices, but should clarify in a timely manner whether a payment, a justified rent reduction, or other legal defenses can prevent the termination of the lease.
Whether termination without notice or, alternatively, ordinary termination is effective in a specific case—and which legal steps are advisable—always depends on the individual circumstances of the tenancy. Seeking legal advice early on can help identify risks, avoid unnecessary costs, and consistently assert existing rights.
The statements represent initial information that was current for the law applicable in Germany at the time of initial publication. The legal situation may have changed since then. Furthermore, the information provided cannot replace individual advice on a specific matter. Please contact us for this purpose.