KARLSRUHE (dpa-AFX) - On Wednesday, the German Federal Court of Justice (BGH) dealt with the question of when a landlord can deduct damages for damage to an apartment from the landlord's deposit repayment. The main issue here was the application of an exception rule according to which landlords can, under certain conditions, claim damages even after the limitation period of six months.

In the specific case, a tenant had sued because her landlord had withheld her rental deposit after she had moved out. He justified this by saying that he was offsetting the deposit against compensation for damage to the apartment. As the landlord only settled the account more than six months after the tenant moved out, the tenant believes that her claims are time-barred. After returning an apartment, landlords generally have six months to claim compensation for damage from their former tenants.

However, the German Civil Code provides for an exception to the statute of limitations. According to this, offsetting is also possible after the six months have expired if the claim was not yet time-barred at the time when it could have been offset for the first time. However, one of the conditions for offsetting is that two "similar" claims are involved - for example, cash deposit against cash compensation. The tenant and landlord have differing opinions on the question of whether this similarity existed in the present case.

In the opinion of the lower courts, the landlord was entitled to demand the necessary amount of money instead of in rem restitution - i.e. the restoration of the apartment to its original condition by the tenant himself - but he should have declared this decision during the six-month period. The Eighth Civil Senate also stated on Wednesday that previous case law indicated that the existence of a valid set-off situation was necessary before the limitation period. However, the case raises a number of interesting legal questions./jml/DP/mis