What does the landlord do when the tenant does not pay according to the moving statement and how does the landlord pursue their claim?

This article provides a comprehensive legal overview of how landlords can pursue an eviction claim when the tenant fails to pay. The focus is on jurisdiction rules, case law and pitfalls in the process.

What does the landlord do if the tenant does not pay the amount due according to a moving statement sent by the landlord?

In this connection, the landlord must consider where and how the claim is pursued against the tenant, which depends, among other things, on the composition of the claim and whether the tenant has objected to the claim.

The purpose of the article is to give the landlord an understanding and overview of the options available to the landlord, including which bodies must consider the landlord's claim.

Is there a dispute between tenant and landlord?
The landlord should first consider whether there is a dispute about the claim, i.e. whether the tenant has objected to the claim or whether it is the case that the due date for the claim has expired without payment from the tenant.

• Tenant has objected to the claim → there is a dispute

• Tenant does not react at all → there is no dispute, just non-payment

The fact that the tenant only fails to pay and otherwise remains completely passive is not in itself an objection, just as it is generally not an objection if the tenant announces that they will not pay without any further justification.

If there is no dispute, the landlord can use a demand for payment (if the claim is under 100,000 DKK).

If there is a dispute, the case must be assessed in relation to the jurisdiction rules between the rent board and housing court.

This requires that a demand letter has been sent to the tenant that meets the conditions of Section 10 of the Debt Collection Act, i.e. that all information necessary for the tenant's assessment of the claim must be stated and a 10-day deadline must be stated within which the tenant can settle the claim without measures being taken to incur additional costs for the tenant.

If the tenant does not respond to the payment demand, the bailiff will give the payment demand an endorsement, after which the payment demand has the same effect as a judgment, i.e. the landlord can use the payment demand as a basis for enforcement in an attachment process in the same way as if the landlord had a judgment regarding the claim.

If the tenant informs the bailiff court that "an objection is raised", this will interrupt the further proceedings in the bailiff court, even if the objection is not justified. The payment claim is then sent to the court (housing court) or returned to the landlord, which depends on the landlord's checkbox in the payment claim.

If the claim exceeds DKK 100,000, the case will, regardless of whether the tenant has not objected, have to be brought before the Housing Court (or the Rent Board), see below.

Should the case go to the housing court, bailiff court or rent tribunal?

If the tenant has objected to the landlord's vacate claim and if it is not possible to convince the tenant of the legitimacy of the claim and payment of the claim, the dispute will generally have to be handled either by the Housing Court or the Rent Board depending on the nature of the dispute.

The table shows that jurisdiction depends on what is being disputed - not just the amount in dispute.

Rental legislation contains rules for which body should handle disputes between landlord and tenant, where the decisive factor is what is being disputed, i.e. what is the disagreement about?

The theoretical starting point is that a case must be heard in the housing court as the first instance, unless otherwise provided by law. In practice, however, the Rent Tribunal handles most cases as the first instance, as the Rent Tribunal's area of jurisdiction is quite extensive, see below under the section "The Rent Tribunal's jurisdiction".

If the landlord brings a case before the wrong body (the courts, including the housing court and the bailiff court, or the rent tribunal), the landlord risks the case not being heard/rejected and that the landlord may have to pay legal costs, and in the worst case, the claim may lapse as a result of missed deadlines, for example as a result of limitation.

It is therefore important to inform yourself about the division of competencies between the courts and the rent tribunal before a case is filed/started, and it may be worthwhile for the landlord to seek advice from a lawyer.

In the following, some of the types of disputes that fall under the jurisdiction of the rent tribunal and the courts, including the housing court, are described in more detail.

In addition, the judgment U 2022.4981 H will be discussed in relation to cases where part of the dispute falls within the jurisdiction of either the Rent Board or the Housing Court.

The rent board's competencies

The Rent Tribunal is an independent administrative authority whose competence is laid down in the Housing Act and the Rent Act. The Board is tasked with settling certain disputes between tenants and landlords in connection with residential tenancy agreements.

Disputes regarding purely commercial leases are therefore not covered by the Rent Tribunal's jurisdiction, and all commercial lease disputes must therefore be settled by the Housing Court, unless the parties have agreed otherwise, such as arbitration.

According to the Rent Act, the board can handle a number of cases that are explicitly stated in the laws. The rules of jurisdiction can be found at the end of the various chapters of the Rent Act, where it is specifically stated which types of cases the Rent Tribunal is competent to decide on.

Among the cases often dealt with in practice are:

• disputes about rent regulation and determination, including whether the rent exceeds the maximum amount allowed for a specific tenancy
• disagreements about announced rent increases due to improvements to the property
• questions about the landlord's and tenant's maintenance obligation, including the extent of the tenant's obligation to renovate the property upon vacating, and
• disputes about deposit repayment in connection with moving out and
• Disputes about tenant payments for utilities, such as heating and water bills

In relation to relocation settlements, where the tenant does not want to pay according to a relocation statement because the tenant disagrees with the landlord's required renovation work, the Rent Tribunal makes decisions in several cases over the course of a year. It is thus one of the "core areas" for the Rent Tribunal to decide on landlords' refurbishment claims.

The Rent Tribunal does not have jurisdiction to decide all types of disputes in connection with residential tenancies. For example, the board cannot rule on cases concerning defects in the rented property or the justification for termination or cancellation of a tenancy. The Rent Tribunal can reject cases that require evidence (e.g. expert opinion), even though the subject is actually within the Tribunal's jurisdiction. These cases must therefore be brought before the housing court instead.

If disputes are brought before the Rent Board that fall wholly or partly outside the Board's jurisdiction, the Rent Board must refuse to consider these matters.

It also happens that the rent tribunal refuses to take a position on matters that formally fall under its jurisdiction. This refusal will typically be due to the fact that the case requires evidence that cannot be presented, such as an expert opinion or statements from parties and witnesses. The case must then be brought before the courts instead.

The Rent Tribunal is a dispute tribunal and only deals with cases where there is a disagreement between tenant and landlord - a "potential" problem can therefore not be brought before the Rent Tribunal.

The Rent Board's decision:

If one of the parties disagrees with the board's decision, the decision can be brought before the housing court (or the appeals board if the lease is located in the City of Copenhagen). In that case, the appeal must be made no later than 4 weeks after notification of the rent tribunal's decision.

The Rent Tribunal's decision cannot in itself form the basis for enforcement in the same way as a judgment. This means that if the landlord's claim is upheld by the Rent Tribunal, but the tenant still refuses to pay the landlord's eviction claim, the landlord is obliged to bring the case before the Housing Court in order to obtain an enforcement basis that the landlord can use to attach the tenant's assets of value. In such cases, the landlord should wait to bring the case before the housing court until the 4-week deadline has passed, as exceeding the 4-week deadline means that the rent tribunal's decision cannot generally be changed by the courts, i.e. the housing court will generally base its decision on the rent tribunal's decision.

Jurisdiction of the Housing Court

The Housing Court is a part of the district court that decides as the first instance in cases concerning tenancy law matters covered by the Tenancy Act or the Commercial Tenancy Act, where the Rent Board does not have jurisdiction under the Act.

One of the special features of the housing court is that, pursuant to section 93 of the Housing Relations Act, the parties are entitled to be joined by two lay judges/housing judges if the parties so request or if the court itself so decides. Housing judges are not legal judges, but rather persons with special knowledge of tenancies of the type in question.

The Housing Court's decision can (with some exceptions) be appealed to the High Court.

Be aware:

• Wrong forum choice → risk of rejection and wasted costs.
• Legal costs → the landlord can be ordered to pay the tenant's lawyer if the case is wrongly brought.
• Statute of limitations → if the case is not brought in time, the landlord's claim may lapse completely.

U 2022.4981 H: If a claim partially falls under the jurisdiction of both the Rent Tribunal and the Housing Court

Sometimes the landlord's claim consists of a part that the rent tribunal has jurisdiction over and a part that the housing court has jurisdiction over.

In U 2022.4981 H, the tenant had brought a claim against the landlord for repayment of deposit and prepaid rent. The claim thus included both renovation costs and rent arrears after termination of the lease. The Housing Court and the High Court dismissed the case, finding that the Rent Board should have dealt with the dispute about refurbishment.

However, the Supreme Court found that the dispute did not exclusively concern matters to be dealt with by the Rent Board. Part of the dispute concerned the tenant's termination of the lease and the issue of rent arrears. This part of the dispute fell outside the Rent Tribunal's jurisdiction, as it did not relate to renovation, but to the justification of the termination of the lease and thus the tenant's obligation to pay rent for the notice period. The Supreme Court therefore ruled that the Housing Court had jurisdiction to hear this part of the case.

The decision is important for cases where the dispute involves several claims that only partially fall under the jurisdiction of the Rent Tribunal. In such cases, according to the Supreme Court, the case can be brought directly to the housing court if it is appropriate to handle the dispute together and if a significant part of the parties' dispute could not have been handled by the rent tribunal.

Substantial probably means that 50% or more of the claim concerns something that the rent tribunal cannot decide on.

Practical risks and pitfalls for landlords:

The Supreme Court ruled that if a significant part (as a rule of thumb more than 50%) of the dispute falls outside the jurisdiction of the rent tribunal, the entire case can be brought before the housing court. This allows for a comprehensive treatment.

One advantage of starting a case in the housing court as the first instance is that the landlord - if successful - receives a judgment that can be enforced through the bailiff court.

However, the disadvantage of a housing court case is that it is often associated with waiting time, as most jurisdictions in Denmark have long delays, which means that you should not expect a verdict within the first 1-2 years after the case is filed. In addition, the process is typically also more extensive and costly if the housing court case has to go "all the way", i.e. including an oral main hearing at the housing court

There are also advantages to using the rent tribunal as the first instance, as case processing is often less costly and the waiting time before a decision is made is usually also a lot shorter than in court proceedings.

Conclusion

When a tenant fails to pay according to a moving statement, it is crucial that the landlord quickly and correctly assesses how the claim should be pursued - and not least where. The nature of the case, the size of the claim and any objections from the tenant are crucial factors when assessing whether the case belongs in the bailiff court, housing court or rent tribunal.

At CLEMENS, we help landlords navigate this complex landscape with confidence. We know the rules, the rulings and the pitfalls - and we know how to best secure your claims as a landlord, whether it's a residential or commercial lease.

Also read our guide to: What does the landlord do when the tenant doesn't pay the move-out fee?