Residential Late Fees and Grace Periods in Hesse

Late rent is a serious matter in Hesse, as it opens the door to summary termination. However, the law provides a standardized grace period and limits the "penalties" a landlord can charge to prevent exploitation of tenants.

Tenant rent default is one of the most common challenges for landlords in Hesse. German law clearly defines when default begins, what costs can be claimed, and when immediate termination is permitted. This guide provides a practical overview.

Default Rules at a Glance

1. Rent Due Date and Default

Due Date Rent is due by the 3rd business day of each calendar month, payable in advance (BGB § 556b (1))

Saturday counts as a business day; Sundays and public holidays do not.

Automatic Default Unlike many other obligations, rent default occurs automatically when payment is not received by the due date - no prior reminder is required (BGB § 286 (2) No. 1)

The calendar-based due date is sufficient.

2. Default Interest From the moment of default, landlords may charge default interest at 5 percentage points above the base interest rate per year (BGB § 288 (1)). The base rate is adjusted semi-annually by the German Federal Bank.

Example Calculation

With a base rate of 3.37% (2025), the default interest is 8.37% p.a

On a €1,000 arrears, this yields approximately €6.98 per month in interest.

3. Reminder Fees and Collection Costs

Reminder Fees

• The first reminder is typically free (since default is already automatic)
• From the second reminder onward, landlords may charge reasonable fees - courts generally accept €2.50 to €5.00 per reminder
• Excessive flat fees (e.g., €25 per reminder) are void

Pre-Litigation Attorney Fees If the landlord engages a lawyer due to rent default, the pre-litigation attorney fees can be claimed as consequential damage (BGB § 280), calculated per the Attorneys' Fees Act (RVG).

4. Immediate Termination for Rent Default

Requirements (BGB § 543 (2) No. 3) The landlord may terminate without notice if the tenant:

• Is in arrears for two consecutive months with rent or a significant portion, or
• Has accumulated arrears over a period exceeding two months that equal at least two months' rent

A prior warning is not required for immediate termination due to rent default.

Catch-Up Payment (Schonfristzahlung, § 569 (3) No. 2 BGB)

The tenant can avert the immediate termination by paying all arrears in full within two months after the eviction lawsuit is served. This right exists only once every two years.

Important: If the landlord simultaneously issues an ordinary (subsidiary) termination for rent default, this is not invalidated by the catch-up payment. This dual strategy is strongly recommended for landlords.

5. Contractual Late Fee Provisions

Permissible Clauses

• Reasonable flat reminder fees (€2.50–5.00 from the 2nd reminder)
• Reference to statutory default interest

Void Clauses

• Contractual penalties for late rent payment (disproportionate, invalid under standard contract law)
• Excessive reminder fees (e.g., €25 or more)
• Additional "processing fees" for late payment
• Default interest above the statutory rate

Best Practices for Landlords

1. Check payment receipts on the 3rd business day of each month
2. Send a friendly payment reminder, even though legally not required
3. Document every arrears carefully with dates and amounts
4. Issue both immediate and subsidiary ordinary termination simultaneously for significant arrears
5. Calculate default interest correctly using the current base rate
6. Avoid void clauses regarding penalties or excessive reminder fees

Landager supports you with automatic payment receipt checks, default reminders, and correct default interest calculations.

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