No 50/50 rule in sight for commercial rent in the lockdown

2022-06-14 01:46:53

The first contours are already emerging in the pending ruling by the Federal Court of Justice (BGH) on commercial rents in the Corona lockdown.

The BGH is currently hearing a test case in Saxony, in which the final ruling is expected on Jan. 12, 2022.

In December 2020, the legislature decided that commercial tenants can demand an adjustment of their lease if they were not allowed to open their business at all or only with severe restrictions due to the Corona measures. The basis for this is the discontinuation of the basis of the business pursuant to Section 313 of the German Civil Code (BGB), which, however, does not only result in a claim for the waiver of part of the rent. It would also be conceivable to defer the rent so that the landlord does not have to forego the money.

Until recently, case law remained inconsistent in this regard.

The current test case before the BGH involves the branch of a textile discounter that had to close for a month in 2020. In the previous instance, the Dresden Higher Regional Court (OLG) had ruled that the discounter had to pay around half the rent. The reason given was that the risk in a systemic crisis such as the Corona pandemic could not be expected to be borne by only one party to the contract.

However, the judges of the Federal Court of Justice have already indicated in the course of their hearing that the 50/50 solution of the Higher Regional Court appears to them to be too sweeping. Rather, a comprehensive examination of all circumstances of the individual case would have to take place. For example, it would have to be taken into account whether the business owner in question had received state aid or insurance benefits due to the closure of the business.

While landlord representatives argue that tenants and landlords do not represent a community of solidarity and that there is therefore no reason why continued payment of rent would be unreasonable, others see the two parties to the contract as being affected by the pandemic and being in the same boat. In any case, the 50/50 rule could not do justice to reality.

The final decision will now become apparent at the beginning of the new year, although all signs are already pointing to the need for a case-by-case consideration.

Update:

On Jan. 12, 2022, the Federal Court of Justice (BGH) ruled that a state-ordered store closure during the pandemic and the resulting loss of sales do not constitute a defect within the meaning of rental/lease law, but must be viewed as a disturbance of the basis of the contract within the meaning of Section 313 of the German Civil Code (BGB). According to this provision, the tenant has a claim to adjustment of the rent. The extent of the adjustment depends on the individual case - there is no blanket 50/50 solution.

In justification, the BGH states that both parties to the commercial lease are equally burdened by the government-ordered measures in the fight against the Corona pandemic. It would be inequitable to place the responsibility of this epochal crisis solely on the shoulders of the tenants. In the end, we have a judgment entirely in the spirit of the solidarity community that we are trying to be.