Bavaria Late Fee and Default Interest Rules for Landlords

Germany does not permit punitive late fees of the kind common in many other countries. Instead, landlords in Bavaria may charge statutory default interest and modest administrative costs when tenants pay late. However, persistent non-payment triggers one of the landlord's most powerful tools: the right to immediate lease termination.

When Does a Tenant Default

Rent is legally due in advance by the 3rd business day of each month (§ 556b BGB). A tenant is automatically in default - without any formal reminder - once this deadline passes without payment (§ 286 BGB).

Note (BGH ruling): A tenant is considered to have acted on time if they initiated the bank transfer on the 3rd business day with sufficient funds. The transmission time is not counted against the tenant.

1. Default Interest (§ 288 BGB) Once a tenant is in default, the landlord has a statutory right to charge default interest:

• The base rate is recalculated by the Deutsche Bundesbank on January 1 and July 1 each year
• Interest is calculated precisely on the overdue amount for the exact number of days late
• No separate "penalty fee" structure exists - interest is the only statutory recovery mechanism

2. Reminder Fees (Mahngebühren) Landlords may charge reasonable administrative costs for sending formal reminders:

• First reminder: Generally no fee may be charged (the tenant is already in default by calendar)
• Subsequent reminders: A flat fee of approximately €2.50 to €5.00 per reminder is typically accepted by Bavarian courts
• Excessive fee clauses in leases (e.g., "€15 per reminder") are usually void as unfairly disadvantaging the tenant under Germany's standard terms rules (AGB-Recht)

3. Immediate Termination for Non-Payment (§ 543 BGB)

The most significant consequence of persistent late payment is the landlord's right to terminate the lease without notice:

Grounds for Immediate Termination A landlord may terminate immediately if the tenant:

1. Is in arrears for two consecutive months with the full rent or a significant portion, OR
2. Has accumulated arrears totaling two months' rent over a longer period

The Cure Right (Schonfristzahlung) Even after valid immediate termination, a residential tenant can cure the termination by paying the full arrears within two months after being served with the eviction lawsuit (§ 569(3) BGB):

• This cure right can only be used once every two years
• It does not apply to commercial tenants
• Best practice: Always deliver an ordinary termination (ordentliche Kündigung) simultaneously as a fallback, in case the tenant exercises the cure right

For more on the eviction process, see our Eviction ProcessFörhandsgranskning ej tillgänglig guide.

Best Practices for Landlords

1. Monitor payments closely - Check rent receipts on the 4th business day each month
2. Send reminders promptly - Document all communications in writing
3. Calculate interest accurately - Use the current Bundesbank base rate
4. Don't rely on late fee clauses - Stick to statutory default interest to avoid voided clauses
5. Act decisively on persistent default - Consult an attorney as soon as the two-month threshold approaches

How Landager Helps

Tracking late payments across multiple properties, calculating precise default interest, and knowing when the threshold for immediate termination is reached can be complex

Landager syncs with your bank account, automatically identifies late rent payments, calculates day-accurate interest, and generates compliant reminder letters - alerting you instantly when legal escalation thresholds are crossed. Back to Bavaria Landlord-Tenant Laws OverviewFörhandsgranskning ej tillgänglig.

How Landager Helps Landager tracks lease terms, rent collection tracking, and automated late interest calcs - making it easy to stay compliant with Bavaria regulations.