The Exclusion of the Arbitrary Ordinary Termination in German Residential Tenancy Law: A Private Law Perspective

Undine Christian

doi:10.1515/ercl-2025-2010

Article Open Access

The Exclusion of the Arbitrary Ordinary Termination in German Residential Tenancy Law: A Private Law Perspective

Undine Christian

Published/Copyright: November 12, 2025

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From the journal European Review of Contract Law Volume 21 Issue 3

Abstract

Continuing contractual obligations are characterised by the fact that they do not expire upon fulfilment of the mutual obligations. Without an agreed end to the contractual relationship, an everlasting continuing obligation is at least conceivable. The institution of ordinary termination enables the contracting parties to terminate the continuing obligation unilaterally. In German residential tenancy law, the principle of arbitrary ordinary termination applies only to a limited extent. According to § 573 BGB, landlords can only terminate the tenancy if they can demonstrate a legitimate interest. This article examines various approaches to explaining this peculiarity of residential tenancy law. The exclusion of arbitrary ordinary termination is closely linked to the dogmatic reconstruction of residential tenancy law. While residential tenancy law has historically developed as public law, it is now understood as a matter of private law. Two different reconstructions of ordinary termination are compared and examined with regard to their implications for the understanding of residential tenancy law: § 573 BGB can be understood as the result of conflicting constitutional rights or as a mandatory consequence of a tenancy agreement for residential space understood as the centre of one’s private life.

Résumé

Les obligations contractuelles continues se caractérisent par le fait qu’elles ne s’éteignent pas après l’exécution des obligations mutuelles. Sans une fin convenue de la relation contractuelle, une obligation continue et perpétuelle est au moins envisageable. L’institution de la résiliation ordinaire permet aux parties contractantes de mettre fin unilatéralement à l’obligation continue. En droit allemand du bail d’habitation, le principe de la résiliation ordinaire arbitraire ne s’applique que dans une mesure limitée. Selon l’article 573 du BGB, les propriétaires ne peuvent résilier le bail que s’ils peuvent justifier d’un intérêt légitime. Cet article examine différentes approches pour expliquer cette particularité du droit du bai263l d’habitation. L’exclusion de la résiliation ordinaire arbitraire est étroitement liée à la reconstruction dogmatique du droit du bail d’habitation. Si le droit du bail d’habitation s’est historiquement développé en droit public, il est aujourd’hui considéré comme une question de droit privé. Deux reconstructions différentes de la résiliation ordinaire sont comparées et examinées en ce qui concerne leurs implications pour la compréhension du droit du bail d’habitation: le § 573 BGB peut être compris comme le résultat de droits constitutionnels contradictoires ou comme une conséquence obligatoire d’un contrat de location pour un espace d’habitation compris comme le centre de la vie privée.

Zusammenfassung

Dauerschuldverhältnisse zeichnen sich dadurch aus, dass sie durch Erfüllung der wechselseitigen Leistungen nicht erlöschen. Ohne vereinbartes Ende der Vertragsbeziehung ist ein ewig bestehendes Dauerschuldverhältnis zumindest denkbar. Das Institut der ordentlichen Kündigung ermöglicht es den Vertragsparteien, das Dauerschuldverhältnis einseitig zu beenden. Im Wohnraummietrecht gilt das Prinzip der willkürlichen ordentlichen Kündigung nur eingeschränkt. Vermieter können nach § 573 BGB das Mietverhältnis nur dann kündigen, wenn sie ein berechtigtes Interesse an der Beendigung vorweisen können. Der Beitrag untersucht verschiedene Begründungsansätze für diese Besonderheit. Der Ausschluss der willkürlichen ordentlichen Kündigung ist eng verknüpft mit der dogmatischen Rekonstruktion des Wohnraummietrechts. Während sich das Wohnraummietrecht historisch als öffentliches Recht entwickelt hat, wird es heute als eine dem Privatrecht zugehörige Materie verstanden. Zwei unterschiedliche Rekonstruktionen der ordentlichen Kündigung werden gegenübergestellt und hinsichtlich ihrer Implikationen für das Verständnis des Wohnraummietrechtes untersucht: § 573 BGB kann als Ergebnis widerstreitender Grundrechte verstanden werden oder als zwingende Folge eines Mietverhältnisses über Wohnraum also dem Lebensmittelpunkt der privaten Existenz.

Keywords: residential tenancy law; contracts; housing; termination

1 Introduction

In German residential tenancy law, the arbitrary ordinary termination of the landlord is excluded. In order to end the contract, the landlord needs to present a legitimate interest. Other tenancies than residential ones can be ended unilaterally, by the tenant and as well by the landlord. The possibility of unilaterally ending is not special for tenancies. In fact, all indefinite continuous contractual obligations can be ended unilaterally and without reasons. It is therefore residential tenancy law t264hat constitutes an exemption from the norm. The article will first provide a short overview of German residential tenancy law (2) and then highlight the anomaly of residential tenancy law in the system of indefinite continuous contractual obligations (3). This anomaly needs to be addressed as the system of private law aspires to be coherent.^[1] The article then elaborates on the different approaches that explain the exclusion of the ordinary termination (4).

2 Exclusion of the Arbitrary Ordinary Termination in Residential Tenancy Law

Like the rest of German tenancy law, residential tenancy law is anchored in the German Civil Code (BGB).^[2] In fact, most of the sections are reserved for residential tenancies.^[3] The arbitrary termination of the contracts on behalf of the landlord is excluded in § 573 BGB. As stated in § 573 para 1 BGB the landlord needs to present a legitimate interest in ending the contract. This is considered also a general clause that applies when the reason for ending the contract does not lie within one of the three standard examples set out in the second paragraph.^[4] Apart from the general clause, the first paragraph forbids the termination for the purpose of increasing the rent.

The second paragraph entails three standard examples, in which a legitimate interest in ending the contract is assumed. The first standard example states that the landlord is entitled to terminate the contract if the tenant has committed a culpable and significant breach of the contract. The second standard example stipulates that the landlord can terminate the contract if they require the rooms as a residential space for themselves, their family members or members of their household. According to the third standard example, the landlord is entitled to terminate the tenancy if the continuation of the tenancy would prevent the landlord from exploiting the property economically and would result in significant disadvantages for the landlord.

The tenant in contrast does not need to provide a legitimate interest in ending the contract. In order to end the contract by ordinary termination, they only need to respect a notice period of three month as set forth in § 573c BGB.

The rules that exclude the arbitrary ordinary termination are highly relevant in German residential law because unlike in other legal orders residential265 tenancies are generally not limited in time.^[5] In fact, a tenancy can only be time limited if the landlord presents a legitimate interest.^[6] The standard residential tenancy is thus continuing in time. That in itself is not surprising since tenancies in general are part of obligations that can be described as indefinite continuous contractual obligations. Indefinite continuous contractual obligations differ highly from other obligations and are inextricably linked to the legal institution of ordinary termination.

3 Indefinite Continuous Contractual Obligations and Their End

In order to understand why the exclusion of the arbitrary ordinary termination in German residential tenancy law constitutes an anomaly in the system of indefinite continuous contractual obligations, it is important to understand the structure of indefinite continuous contractual obligations. As the name suggests, the defining characteristic of the indefinite continuous contractual obligation is the aspect of time.^[7] This does not mean that there is a certain time span to be reached in order to qualify for a continuous contractual obligation as there can by short continuous obligations as well.^[8] Other types of obligations can also extends over a long type, e.g. a purchase agreement with a payment by instalments. The difference between a purchase agreement and a continuous obligation is that the former is not defined by time. The latter however is266 defined by time and only by time.^[9] If there is no agreement about the end of a continuous obligation, the mutual obligations continue. The obligation that results from a purchase agreement ends with the fulfilment of the main contractual performance and the consideration. But a continuous obligation does not end with the fulfilment neither of the main contractual performance nor the consideration. In a tenancy without time limit, the landlord is obliged to continuously grant the tenant the use of the residential space. The tenant who pays the rent for a month is also not freed from their obligation to pay the next month’s rent. So, there is no automatic end of a continuous contractual obligation. Theoretically, an indefinite continuous contractual obligation could last a lifetime and even longer.^[10] Indefinite continuous obligations are not alien to German civil law.^[11]

However, eternal commitments are alien to German civil law.^[12] It must therefore be possible to end the contract. Without the possibility of the termination, there would only be one way to end an indefinite continuous contractual obligation. This would be the consensual agreement in the form of a cancellation agreement.^[13] However, since the prerequisite for a cancellation agreement is the consensus of both parties, one party is dependent on the other.

That is why there is a need for a mechanism for disengagement from the obligation independently of the contractual partner. The legal institution of the ordinary termination provides such a mechanism. It is essential to distinguish between the ordinary termination and the extraordinary termination.^[14] The distinction between those legal institutions might not be so clear in residential tenancy law because both the ordinary and the extraordinary termination are tied to good reasons. But in regular continuous obligations, for the ordinary termination both parties can end it arbitrarily, meaning that they do not need to provide a reason for ending the obligation. Only a required notice of termination is to be respected.

As stated, the extraordinary termination without notice instead is always tied to the existence of a compelling reason. For regular continuous obligations this is stated in § 314 BGB. For tenancies in general it is stated in267 § 543 BGB, complemented by § 569 BGB for residential tenancies. The extraordinary termination that is tied to a significant breach of the other party cannot be suspended by a party agreement because this would constitute an unreasonable disadvantage.^[15] However, since the extraordinary termination requires a reason, it is not the means to end the indefinite obligation by the mere will of one party. It is only the ordinary termination that gives a party the right to end the obligation by the mere will. That is why only the ordinary termination responds to the distinctive aspect of continuing obligations, namely their prolongation over time.^[16] Therefore, in principle all continuous contractual obligations can be ended freely or arbitrarily through an ordinary termination.^[17]

If all continuous contractual obligations can be ended by the arbitrary ordinary termination, then one would assume that this applies also to tenancy agreements. And in fact, non-residential tenancies can be ended just by giving notice of termination, as stated in § 542 para 1 BGB. For residential tenancies however, the above-mentioned rules apply. Residential tenancies deviate thus significantly from other indefinite continuous obligations.

4 Justification

The following section explores different approaches to explain the exclusion of the arbitrary ordinary termination in residential tenancy law. The justification of the exclusion of the ordination termination is preceded by the question of how residential tenancy law is to be reconstructed generally. There are three approaches to explain the peculiarity of residential tenancy law. Since the debates around the residential tenancy law are closely linked to its historical development, the historically earliest perspective is to be discussed firstly. According to the historically first approach, the exclusion of the ordinary termination cannot be reconstructed within the system of private law but must be instead understood as a temporary measure268 justified by overriding public-law considerations (4.1). This perspective is based on a strong distinction between private and public law. The second perspective attenuates this distinction, proposing that residential tenancy law forms, similarly to employment law, a ‘third’ category of law situated between public and private law (4.2). According to a third approach, the exclusion of the ordinary termination can be reconstructed internally within the system of private law (4.3). There are two versions of that view, namely on that interprets residential tenancy law as the outcome of conflicting constitutional rights (4.3.1) and one that derives the peculiarities of residential tenancy law from the core of the tenancy agreement (4.3.2). Finally, the implications of the two reconstructions within the system of private law will be shown (4.3.3).

4.1 Historical Public Law Perspective

The origins of residential tenancy law in Germany lie in public law.^[18] The civil code that came into effect in 1900 entailed only a few protections of tenants. One of them was a rule now anchored in § 566 BGB^[19] that stated that the alienation of the residential space would not end the tenancy. Instead, the acquirer would replace the former landlord. Another one gave the tenant the possibility to terminate the tenancy extraordinarily in case the rented space was in a condition that the use of it would constitute a significant health hazard.^[20] This also applies if the tenant knew of the hazardous nature at the conclusion of the contract.^[21]

Other than that, there was no difference between a tenancy that concerned a residential space or the rent of a donkey.^[22] Certainly, there was no protection against the arbitrary ordinary termination by the landlord. During the First World War,269 Germany faced a serious housing shortage.^[23] The local military commandants enacted first a prohibition on increasing the rents, followed by a prohibition on terminating the tenancies.^[24] These rules were meant and understood as temporarily necessary emergency law.^[25] The prevailing opinion at the time was that the exclusion of the ordinary termination was only justifiable for the duration of the housing shortage.^[26] According to this opinion, the exclusion of the ordinary termination constitutes a severe infringement of the private autonomy of the landlord.^[27] The assumption was that in periods when there was no housing shortage, the market would regulate itself.^[28] Thus, there would be no justification for the exclusion of the ordinary termination. However, even after the First World War had ended, there seemed to be the need to uphold certain regulations. In the early 1920ies, three Acts where enacted that excluded the arbitrary ordinary termination and introduced the system of comparable rents.^[29]

That legislation remained largely in force until 1960 with only minor alterations. In the 1960ies, the market was deemed to be ‘balanced’ and thus ‘ready’ for the arbitrary ordinary termination of the landlord. The so-called ‘Abbaugesetz’ abolished nearly all tenants’ rights.^[30] It was then possible for the landlord to terminate the tenancy arbitrarily. According to § 566a BGB^[31] the tenant could only in rare cases object to the termination stating that the end of the tenancy would constitute a hardship for the tenant, their family or another member of their household that is not justifiable even considering the legitimate interests of the landlord. The intention was to return to the logic of the market economy.^[32] The underlying assumption was that the housing market works like a market of ordinary goods, meaning it is270 governed by supply and demand.^[33] But soon after the new regime came into effect, it became clear that the logic of the market economy may not apply to residential spaces.

The problem is that the housing market just does not work like a market for ordinary goods. The housing market is characterised by some peculiarities wherefore the mechanism of supply and demand do not unfold its regulatory power.^[34] The most prominent problem is that the demand for residential spaces is not flexible. Normally, if there is scarcity, the consumer can decide to consume less or nothing at all of that product. However, as people need to live somewhere they are essentially dependent on residential spaces.^[35] This is why not consuming is not an option.^[36] Moreover, people adapt neither their consumption of residential space gradually to their income nor to their needs.^[37] Not every rise or reduction of the income will result in a change of the residential space. Also, people tend to stay in their flats even if members of the household move out. The reason is that moving places comes with high transactions costs, both material and immaterial.

The material costs consist in the costs for the actual moving, but also in the furnishing of the flat, eventual costs for a broker, and other adjustment costs. The immaterial costs can be seen in the abandonment of a familiar space. Because changing residential space is such an effort, people consider moving only after a certain threshold has been reached.

Another problem lies in the long production time for new houses.^[38] When the supply is short, the market normally reacts to it by producing more of the wanted goods. With houses this is not so easy. At least, it takes quite some time to get the permission to build a house and then actually build it. Another peculiarity is that the housing market is divided into submarkets not only according to the available income but also according to social background or status.^[39] This means that not all parts of the market are effectively open to all people.^[40] Connected to that is the fact271 that the price for residential spaces is not just formed by the characteristics of that space itself but is highly influenced by external factors such as the surrounding, public transport or other services.^[41] These anomalies of the housing market show that the logic of a market governed by supply and demand cannot fully unfold, regardless of whether there is a housing shortage or not.^[42] Consequently, the argument ‘the market is temporarily not functioning’ does not seem very convincing. If the housing market consistently fails to self-regulate, the justification for a temporary legislative intervention can equally not be valid.^[43] Nowadays, few scholars reconstruct tenants’ rights within this framework. Despite this, the underlying assumption of a functioning housing market remains quite prominent. However, historical evidence has repeatedly demonstrated the fallacy of this assumption.

Another question would be if residential tenancy law should be understood as public law because of the realisation that there is no fully functioning housing market. However, such a reconstruction is yet to be developed for German residential tenancy law. It is to be pointed out that reconstructing residential tenancy law as a permanent necessary public law regime would constitute a major innovation leading to the question on what foundations residential tenancies would be built upon. The advantages of applying general private law principles will be shown under D.

4.2 Housing Law as a Holistic Approach

Another perspective suggests looking at residential tenancy law neither through the lens of public or private law but to analyse it holistically. Bettermann, for instance, observes that the expansion of public law into ‘former’ private law fields goes much beyond residential tenancy law.^[44] He suggests that fields of regulation can be analysed through a public law perspective but also through a private law perspective.^[45] That is why he is arguing for engaging in ‘real-life problem areas’ rather than sticking to the traditional272 concepts of fields of law.^[46] Residential tenancy law is entailed in the broader category of ‘housing law’, which encompasses not only other areas of private law such as usufructuary lease and usufruct, but also incorporates relevant aspects of public law.^[47] Similarly, Eller argues for a holistic understanding of housing law which apart from residential tenancy law encompasses property law and national and international regulations on investment, capital markets and services law, as well as fiscal and monetary rules.^[48] This perspective is based on the observation that upholding a strong distinction between public and private law can obscure some drivers of the contemporary housing crisis.^[49]

The suggestion of a distinct housing law however seems less a concrete third field of law next to private and public law than an invitation to rethink the housing issue in order to consider the different dimensions and incentives for actors in the housing sector. While it is certainly important to bear in mind that the actual relationship between the tenant and the landlord is shaped not only by residential tenancy law but also by other legal regimes, the precise implications for the understanding of residential tenancy law remain vague. It remains unclear whether existing legal doctrines would remain applicable or if there is the need for entirely new categories and normative frameworks. In the absence of a detailed dogmatic analysis, a justification of the exclusion of the ordinary termination cannot be built on this holistic perspective.

4.3 Justification from Within the System of Private Law

The exclusion of the arbitrary ordinary termination in residential tenancy law was incorporated in the German civil code 50 years ago.^[50] It is widely accepted that the arbitrary ordinary termination needs to be excluded permanently. According to the prevailing opinion in legal science, the exclusion of the arbitrary termination can be justified in light of the contrasting constitutional interests of the landlord and the tenant that need to be balanced against each other (4.3.1). I will propose a different approach (4.3.2) according to which the exclusion of the ordinary termination can be explained by the core of the tenancy agreement, namely the possibility to live there to create a home. Afterwards, I will highlight what the different approaches imply for residential tenancy law (4.3.3).273

4.3.1 Conflicting Constitutional Rights

The exclusion of the arbitrary ordinary termination is commonly justified by reference to the weaker position of the tenant.^[51] Although it may not hold true for each individual contractual relationship, structurally speaking, the tenant is deemed to be the weaker part. The disbalance results from the different meanings of the contractual obligations for the parties.^[52] While the landlord merely pursues economic interests with the tenancy, it plays a much more important role in the life of the tenant since the tenancy provides the tenant with a place to live. The termination of the tenancy thus weighs differently. The landlord only risks the rent between two tenancies. The tenant, however, loses the centre of their life.^[53] That is why the tenant needs to be protected. The legislature has fulfilled this task by enacting the norms of residential tenancy law.^[54] The exclusion of the ordinary termination and the regulation of the rent set forth in §§ 556 et seq BGB are the two pillars of residential tenancy law.^[55] The norms are not only the result of the protection of the weaker tenant but also the result of a constitutional balancing of conflicting rights and interests.^[56]

The landlord has a constitutional right to property set forth in Article 14 Basic Law (GG).^[57] The core of the constitutionally guaranteed right to property is the private benefit and the fundamental power of disposal. However, the social obligation enshrined in Article 14 para two applies as a restriction.^[58] This means that the use of the property must serve the common good if the property has an inherent social function.^[59] As the residential space is of great importance to the individual and their family, the social function is present.^[60]

Also the tenant has a constitutional right to property as the Federal Constitutional Court has ruled.^[61] An essential characteristic of property within the meaning274 of Article 14 of the Constitution is that a property right is assigned to the entitled person exclusively for private use and disposal in the same way as real property in civil law.^[62] The residential space is the centre of one’s life and thus takes the role of real property for those who cannot afford buying or building a house.^[63] Since the tenant has the right to use the residential space and exclude other people from using it, the property right is assigned to them for private use.^[64]

Both parties of the tenancy can rely on their constitutional right to property. Since Article 14 GG is considered a normatively shaped fundamental right it is the duty of the legislator to determine the content of the limits of the right to property.^[65] Consequently, also in residential tenancy law, the legislator shape the scope of the conflicting property right. As the tenant is deemed to be weaker than the landlord, the legislator needs to provide some protection. However, as the Federal Constitutional Court has repeatedly stated, it is up to the legislator how to exactly formulate that protection.^[66] Consequently, the legislature could decide upon the degree of protection and the particular methods of it. The legislature could opt for a completely different kind of protection for tenants. Understood in this way, the exclusion of the arbitrary ordinary termination is seen not as a mandatory but just as contingent.

4.3.2 Core of the Tenancy Agreement

I would like to propose a different justification of the exclusion of the arbitrary ordinary termination in German residential law. Contrary to the view that reconstructs the protection against termination as the result of competing constitutional rights, I will argue that the exclusion of the ordinary termination is compelling and not just a contingent decision of the legislature.

The German civil code is characterised by the division into general and special parts. The civil code itself is divided into the first book that contains the general part followed by the other books containing the law of obligations, law of property, family law and law of succession. This structure can be found also inside the law of obligations.^[67] The specific takes circumstances of life and codifies them as particular types of obligations. Rental law is one of those particular types of obligations. The connecting point for the existence of specific norms is the main contractual performance.^[68] 275 In rental law, the main contractual performance is the use of the rented item for the contractual period in exchange for a rent, § 535 BGB. Among the different particular types of obligations, further divisions exist. Rental law can be divided into a general part (§§ 535 – 548, 580 et seq BGB) and specific provisions dependent on the rented item. There are specific provisions for residential spaces, spaces for commercial use, plots of lands, registered ships and digital products. The same structure can be found in service contracts law and the law of contracts where the main performance is the production of a work. Thus, the existence of specific provisions for residential spaces is neither special nor surprising giving the high relevance for the tenants.

The particularity of residential tenancy law is that it entails the majority of norms in rental law and that some norms of residential tenancy law are applicable to commercial spaces or plots of lands. But this does not alter its position as specific provision for the case that the item is a residential space. It is then essential that the stipulated contract is about a residential space. One could think that a residential tenancy is defined by the item, meaning that there is a factual difference between a residential space and a commercial space for example. However, this is not the case as there is no factual definition of residential space. A residential tenancy is defined by the parties’ contract. A tenancy is a residential tenancy if the tenant is allowed to live and create a home in the rented space.^[69] This means that the same space can be rented out as a commercial space and later as a residential space or the other way around. But this has not yet provided the essence of residential tenancies. In order to grasp the core of residential tenancies one needs to know what ‘living’ in the sense of creating a home means.^[70]

4.3.2.1 Creating a Home

Answers to the question of what constitutes a home, can be found in various disciplines. Especially in the human rights literature, there is a vivid debate about a right to housing. The focus of this debate lies on the normative construction of that right in different legal orders. There are also different notions of the scope of that right. While in some cases a right to housing primarily means a right to a shelter, it can in other cases mean much more, namely the right to a home. Also, there are different dimensions of that right to housing.^[71] In some cases, it is perceived as a right that enables person to defend them against intrusion of the state or against eviction276 (negative right). Some authors highlight that there can be a claim towards the state to ask for adequate housing (positive right).

Also, the German constitution includes a concept of home, namely in Article 13 para 1 GG that states that the home^[72] is inviolable. Home in that sense means any space that is not generally accessible, serves as a place for people to stay and is dedicated to privacy.^[73] This is to be understood widely and includes therefore also short-term stays in hotels and hospital rooms.^[74] Article 13 GG, however, constitutes a defensive right against the intrusion of the state into certain spaces.^[75] The scope of protection of this fundamental right does not imply how the tenancy agreement is to be understood. In order to define the core of a tenancy agreement, there is the need for a genuine contractual understanding of what it means to live in the sense of creating a home. Consequently, the intention of this article is not to engage in the discourse of which defensive rights citizens have against the interference of the state or if they have a fundamental right to demand state action.^[76]

The intention is rather to show that the social practice of living in the sense of creating a home is already recognised in German residential law. The following is to be understood as a description of what it means to live, based on the findings of the disciplines of psychology and sociology.^[77] It is important to stress that the findings do not imply an instruction of the ‘right way to live’.^[78] The conditions of living in the sense of making a home are not universally valid in cultural and temporal terms. This is because living as a cultural practice has different meanings depending on the era and culture.^[79] Not only the way of living, but also the idea of living has changed over the epochs.^[80] Nor does the following attempt to describe how people live in different ways. Rather, it is about describing the essence of what is meant by ‘living in the sense of making a home’ in a bourgeois capitalist, democratically organised constitutional state.^[81] 277

According to the findings from sociology and psychology, living can be described in terms of security, privacy, local ties, social relationships, organisation, continuity, identity and social appropriation.^[82]

Both security and privacy are guaranteed not only at home, but also in other dwellings or even in hotel rooms. Enclosed rooms or even makeshift settlements primarily provide physical protection from environmental influences but also convey a feeling of security and thus guarantee people’s survival.^[83] The same is valid for privacy. Privacy is associated with an autonomous life and means the ability to decide whether you want to withdraw or socialise with others.^[84]

However, this is not the only aspect of living in the sense of making a home. There is a difference between living in a home and simply staying at a place.^[85] To use an example, think of the case of a rented hotel room for three days because one is staying in another city due to a conference. For the stay, the hotel room provides security and privacy but one would not consider it a home.^[86] The same for example can apply to a temporary shelter provided by the state. It is therefore the other aspects that turn a space guaranteeing security and privacy into a place considered home. Living essentially means that people enter into relationships, both with space and society. The spatial relationship can be described as local ties, encompassing both the relationship to the residential space itself and its surroundings. Social relationships, on the other hand, are built up with friends, neighbours and other acquaintances.

Living in the sense of making a home also means anchoring the identity in the residential space and the neighbourhood.^[87] The connection to the neighbourhood can consolidate into a local identity.^[88] At the same time, the choice of place of residence and, in particular, the furnishing of the residential space can become a278 means of self-expression and thus an expression of one’s own identity.^[89] It is in the home that the individual asserts their own history and individuality.^[90] Local ties and social relationships are closely linked to the temporal and spatial organisation of everyday life.^[91] Within the residential space, sequences of action develop; familiar objects can be stored and are immediately available.^[92] Everyday life outside the home is also organised by routines.^[93]

The prerequisite for the development of social and spatial relationships, (local) identity and the organisation of everyday life is that it is not just a short-term stay, but a longer stay in one place.^[94] Living is therefore generally associated with continuity, both with regard to the past and with a view to the future.^[95] Living means remembering^[96] and expecting to be able to stay.^[97]

This raises the question of how long one has to stay in a place for it to be considered a home. However, it is not possible to determine a precise duration after which a person is considered to be living in another place.^[98] The boundaries between living on the one hand and a longer stay on the other are fluid. Ultimately, the criteria already mentioned, and the extent of appropriation are decisive.

The bond to the residential space and the living environment ultimately arises through appropriation, i.e. the self-determined change of or influence on the environment.^[99] Appropriation transforms a previously neutral place into a place with personal added value, i.e. into a home.^[100] Appropriation takes place within the residential space through personalisation, i.e. the furnishing and decoration of the rooms.^[101] The manner of personalisation depends on financial resources and cultural socialisation.^[102] The residential space is usually the only place where such personalisation is possible and therefore the place where people are most likely to be able to develop and realise themselves.^[103] Even residential spaces that are completely279 furnished are personalised by hanging pictures, putting up plants or choosing your own doormat.^[104] The same applies to ‘off-the-peg’ furnishings, as it is the specific choice, experiences and feelings that create a home.^[105]

The boundaries between living in the sense of creating a home on the one hand and a longer stay on the other are fluid. Living essentially means that one unfolds and develops one’s personality within the residential space. In fact, living and the development of one’s personality are inextricably linked.^[106]

4.3.2.2 Mandatory Nature of § 573 BGB

It is this social practice called living that differentiates residential tenancies from other tenancies. It is important to note that the tenant by stipulating a residential tenancy is not obliged to actually live in the residential space. If the tenant uses the residential space only rarely or not at all, it is not considered a breach of contract. The residential tenancy enables the tenant to live in the space and make it a home. Regardless of whether the tenant does live in the residential space or not, the meaning of living is to be respected by tenancy law. If that concept of living is defining the tenancy, then this distinction needs to be recognised by residential tenancy law.

I would like to argue that the core of residential tenancies is recognised in the exclusion of the arbitrary ordinary termination. As shown above, one of the prerequisites for people to engage in the social practice of living is the expectation of continuity. That is why I assume that even in a hypothetical well-functioning housing market, the parties would agree on the exclusion of the arbitrary termination. In a hypothetical well-functioning housing market, the tenant would easily find a new residential space for more or less the same conditions. The new residential space would be located in the neighbourhood, have similar characteristics and would not cost significantly more than the old one. Stipulating the contract, the tenant would further know about the market situation, meaning that they would not only be able to find a new residential space but would also expect that. The reason why I assume that the parties would still exclude the arbitrary termination is that the residential space constitutes the home of the tenant. Giving up a home and creating a new one constitutes a significant caesura. Most people would be willing to give up a home only if the newly build home constitutes a noteworthy improvement such as a lower rent, more space or because the new space is deemed more suitable in other ways.

A fair agreement would entail a clause that prohibits the landlord to end the tenancy arbitrarily and ties the termination of the tenancy to certain reasons. A280 reciprocal contract is the result of the right to self-determination of both parties, requiring both parties to agree on the contract.^[107] A party will only agree to stipulate a contract if it constitutes an advantage for themselves. The party, however, knows that this holds true for the other party respectively. That is why the idea of the reciprocal contract incorporates the thought of a reconciliation of interests, meaning that no party is disadvantaged by the other.^[108] The contract, understood as the united will of both parties, is therefore to be understood as a fair settlement.

However, there are some prerequisites that need to be met in order to enable the parties to come to a fair agreement. One is that neither of the parties is dependent on the other or that both are equally dependent on each other.^[109] If only one party is dependent on the other, this other can de facto dictate the conditions of the contract. If the dependent party nevertheless agrees to the contract this might be formally seen as an act of freedom of contract.^[110] Substantively, this cannot be considered a free act.^[111] If a minimum of equal opportunity should be guaranteed by the legal order, there needs to be a reaction to the structural shortcomings.^[112] It is then up to the legislator to ensure that the parties come to a fair agreement.^[113] This task is accomplished by the means of mandatory norms. As shown above, the rule of supply and demand does not have the same effect in the housing sector as it has in ordinary markets. Therefore, the landlord and the tenant would not come to an agreement that excludes the arbitrary termination. § 573 BGB substitutes the clause the parties would agree on if there only was a functioning housing market. It is very important to note that this does not constitute a protection of the presumably weaker side, namely the tenant. Neither it is an infringement of the freedom of contract as this principle already incorporates the idea of corrective justice.^[114]

The exclusion of the ordinary termination can be reconstructed within the system of private law. Moreover, the exclusion of the ordinary termination can be seen as a compelling norm, since the essence of a residential tenancy is to give the tenant the possibility to live in the space. As shown, living in the sense of making a home is means to unfold the personality.281

4.3.3 Implications

Both the conflicting constitutional rights theory and the approach I sustain come to the conclusion that the exclusion of the arbitrary termination can be reconstructed within the system of private law. One could therefore think that the precise justification is of no importance. I would like to briefly highlight why I think that it is important to find the right justification for the exclusion of the ordinary termination.

One major difference between the two approaches is that the exclusion of the ordinary termination appears to be contingent in the view of the conflicting constitutional rights theory while it is deemed to be compelling according to the core of the tenancy agreement approach. One could argue that the latter approach strengthens the position of the tenant at least in a discourse way. If it is clear that § 573 BGB is a compelling norm then a debate about the abolition of this norm would be out of the question.

Another advantage of the view that derives the exclusion of the ordinary termination from the core of the tenancy agreement is that there would be a stronger nexus to private law. The implication of a strong tie to the logic of private law is to be shown in two different ways. Firstly, arguing from e decisive private law perspectives aims at interpreting the criteria set forth in § 573 para 2 BGB. This is exemplified with the definition of a relative in § 573 para 2 n 2 BGB. Secondly, the advantage of applying general private law principles to residential tenancies is shown.

The concept of a relative is not defined by residential tenancy law itself. While there is consensus that relatives can not include all the persons listed in §§ 1,589 – 1772 BGB, there has been a vivid debate about how to restrict the understanding of relative.^[115] Most authors argue that there has to be personal connection between the landlord and the relative and that this personal connection can be assumed with certain degrees of relationship. However, when it comes to naming the precise members of family, they very much differ.^[116] Similarly, Article 6 GG does not define family. According to the Federal Constitutional Court, Article 6 GG protects specific family ties, such as may exist between adult family members and also between members of an extended family over several generations.^[117] In order to have a defined group of persons counting as relative, the Federal Court of Justice has ruled that the meaning of family in § 573 para 2 n 2 BGB is to be homologous with the right to282 refuse to give evidence set forth in the § 52 StPO and in § 383 ZPO.^[118] Both norms list a number of people who have the right to refuse to testify for their relative. It remains unclear why norms from procedural law should define the term family members used in residential tenancy law. A definition from within the private law system would be preferably in order to reconstruct not only the exclusion of the ordinary termination but also the specific reasons in which a landlord has a legitimate interest in termination the tenancy. The concept of a relative could be defined by the legal maintenance obligation set forth in §§ 1,601, 1360 BGB.^[119]

Reconstructing the exclusion of the ordinary termination from the core of the tenancy agreement would have an implication for residential tenancy law in general as the private law foundations of residential tenancies would be strengthened. Two examples highlight the current jurisdiction does not apply general principles of private law. The first example concerns the extraordinary termination. According to § 314 para 3 BGB the entitled party can give notice only within a reasonable time limit after obtaining knowledge of the reason. While §§ 543 para 1 and 2, 569 para 1 to 3 BGB are certainly lex specialis to § 314 para 1 BGB, both norms do not entail a time limit in which notice must be given. In absence of a rule incorporated in residential or general tenancy law one would rely on § 314 para 3 BGB. The Federal Court of Justice has ruled that § 314 para 3 BGB does not apply to extraordinary terminations in residential tenancy law.^[120] The other example concerns decorative repairs that are according to § 535 para 1 sentence 2 BGB part of the landlord’s main contractual performance. However, according to the settled case-law of the Federal Court of Justice decorative repairs can be in general imposed on the tenant.^[121] There is no other type of contractual obligation in which it is possible to impose one’s own main contractual performance on the other party.

5 Conclusions

In this article, I have shown that the exclusion of the arbitrary ordinary termination set forth in § 573 BGB can be reconstructed within the system of private law. A residential tenancy is defined by the possibility of the tenant to create a home in the residential space. One of the prerequisites for living in the sense of creating a home is that the tenant can expect to stay in the residential space. A fair agreement would283 therefore exclude the arbitrary termination of the tenancy by the landlord. Since the ordinary rules of supply and demand do not apply to the housing market in the same way they do to other markets, a fair agreement cannot be reached. Therefore, § 573 BGB is the mandatory norm substituting the fair agreement that the landlord and the tenant would stipulate.

Corresponding author: Undine Christian, Free University of Berlin, Berlin, Germany, E-mail: undine.christian@fu-berlin.de

Published Online: 2025-11-12

Published in Print: 2025-09-25

This work is licensed under the Creative Commons Attribution 4.0 International License.

Articles in the same Issue

https://doi.org/10.1515/ercl-2025-2010

Keywords for this article

residential tenancy law; contracts; housing; termination

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