Terminating the Lease: What Are the Consequences?

We have previously discussed the opportunities available in a lease contract as the expiration date approaching. Landlords are obviously very pleased that you are considering extending the lease and are happy to offer incentives such as a rent-free period. But what are your rights and obligations when the lease is terminated?

According to standard ROZ provisions, the lease is automatically extended unless one of the parties terminates it, with due regard to the agreed notice period. This notice period is usually 12 months, but parties can deviate from this. It can also be agreed that only the tenant can terminate the lease, which is known as a tenant’s option.

You Terminate the Lease

If you terminate the lease, it ends on the expiration date, and you must vacate and return the rented property to the landlord in a timely manner. Some clients mention that they have terminated the lease early to avoid forgetting. While this might seem prudent, it actually eliminates all your leverage in negotiations and, in the worst case, the landlord could insist you leave. Therefore, only terminate the lease if you have definitively decided to leave.

The Landlord Terminates the Lease

It is also possible that the landlord terminates the lease, in which case the lease ends on the expiration date, but as a tenant, you automatically have eviction protection for 2 months (without having to do anything). The landlord can therefore only force you to vacate the property 2 months after the expiration date. As a tenant, During this 2-month period, you can request the subdistrict court to extend this period by up to one year, and then two more times for one year each. By submitting the request, you automatically have protection again until the district court makes a ruling. Of course, the district court will weigh the interests of both parties when granting an extension. The eviction protection does not, however, exempt you from paying the rent or actively searching for alternative housing. As a tenant, you also have eviction protection when the lease ends by operation of law, unless you have explicitly agreed that the property must be vacated on this date, for example, as part of demolition or renovation.

Pro Forma Termination

There is no such thing as pro forma termination. The lease is either formally terminated or not, and it must be done according to the formal requirements of the lease. If you, as a tenant, terminate pro forma, indicating your intention to terminate the lease, it does not count as an official termination. The landlord can often simply hold you to the lease agreement.

Forgetting to Terminate the Lease

If you intend to terminate the lease but forget to do so in time, you are, simply put, out of luck. The lease will continue for a new rental period. There are some nuances, such as if the parties were already advanced with a lease termination document but had not yet signed it before the expiration date. In such cases, it is plausible to argue that the parties did not intend to extend the lease agreement.

5 tips

Here are the most important tips:

• Ensure you know when the lease expires, what notice period applies, and if the landlord can also terminate the lease;
• Begin planning your future housing strategy well before the termination date (6-12 months) so you can make timely decisions. Consider your space requirements, whether the current office still meets your needs, and what alternatives are available;
• Only terminate the lease if you are sure you are leaving or if it is absolutely unavoidable (for instance, to prevent a new lease term);
• Remember that you have eviction protection if the landlord terminates the lease unless the contract ends by operation of law;
• Pay attention to the formal requirements in the lease agreement when terminating (e.g., registered mail, notification to both landlord and manager, notice period, etc.).