North Rhine-Westphalia: Late Fees & Default Interest Guide

German tenancy law, governed by the federal Bürgerliches Gesetzbuch (BGB) since its commencement on 1 January 1900, does not contain specific provisions on late fees for residential leases. Instead, the general BGB rules on debtor default and default interest apply. Landlords in North Rhine-Westphalia must adhere to these statutory limits to ensure collection procedures are legally enforceable.

Legal DisclaimerThis guide provides general legal information. Lease laws can change. Always consult a licensed notary or lawyer in this region.

When Does the Tenant Default?

Under § 556b(1) BGB, rent is due by the third business day of the month. If the tenant fails to pay by this date, they are automatically in default — no separate reminder is required. According to federal case law (BGH VIII ZR 291/09), Saturday is not counted as a working day for the purpose of calculating this three-day grace period.

Statutory Default Interest

The landlord may claim default interest when payment is overdue:

As of January 1, 2026, the statutory base rate is 1.27%. For residential tenants, this yields a default interest rate of 6.27% p.a. (as of May 2026).

Reminder Fees: What Is Permissible

Flat-rate reminder fees in lease agreements are only valid if they do not exceed the actual expected loss (§ 309 No. 5 BGB).

Landlords may only claim compensation for material costs (e.g., paper, toner, postage). Costs for the landlord's own administrative effort or personnel time are legally non-recoverable (BGH VIII ZR 285/15). Flat rates exceeding the actual material effort may be declared void.

Consequences of Payment Default

Summary Termination

Under § 543(2) No. 3 BGB, the landlord may terminate the lease without notice if the tenant:

• Is in arrears for two consecutive payment dates by an amount exceeding one month's rent, or
• Has accumulated arrears totaling two months' rent over a longer period.

Tenant's cure right: A summary termination for rent arrears becomes void if the tenant pays all arrears within two months after the eviction complaint has been served (Schonfristzahlung, § 569(3) No. 2 BGB).

Damages

In addition to default interest, the landlord may claim compensation for documented losses:

• Attorney's fees for collection letters
• Court costs for payment orders (Mahnbescheid)
• Reasonable collection agency costs

Recommended Collection Procedure

A structured collection process is essential for later legal proceedings:

1. First reminder — written, with deadline (e.g., 5–7 days)
2. Second reminder — written, with warning of further action
3. Summary termination (if arrears are sufficient) + demand to vacate
4. Court payment order (Mahnbescheid) or eviction lawsuit

Best Practices for Landlords

• Arrange SEPA direct debit — significantly reduces the risk of late payments
• Document payment history — required for later termination and eviction proceedings
• Always send reminders in writing and with proof of delivery (e.g., registered mail)
• Don't delay eviction proceedings too long — each month of arrears increases financial risk
• Clearly specify reminder fees in the lease (ensure they are limited to material costs)

Landager helps landlords monitor payments, send automated reminders, and centrally track rent arrears.

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