Commercial lease and Corona - dispute comes to a head
As we reported in our last article, the Higher Regional Court of Dresden (5 U 1782/20) recently ruled that, in principle, a commercial tenant could reduce the rent to be paid by 50% if his business had been affected by lockdown closures. Accordingly, the ordered closures led to a disturbance of the basis of the contract. As a rule, this disturbance is so significant that it has become unreasonable for commercial tenants to adhere to the previously concluded lease contract.
The decision of the Karlsruhe Higher Regional Court (7 U 109/20) is quite different. In principle, this court assumes that there is no significant disturbance of the basis of the contract.
The background of the different decisions are different dogmatic approaches to which facts the unreasonableness for the tenant is based.
The Higher Regional Court of Karlsruhe takes into account the entire contractual structure and various non-contractual factors and considers that adherence to the contract is only unreasonable within the meaning of Section 313 (1) of the German Civil Code (Bürgerliches Gesetzbuch - BGB) if the tenant's existence would be endangered as a result. At most, something different could apply in justified individual cases.
The Dresden Higher Regional Court took a completely different view. The court stated that in the case of continuing obligations such as rental agreements, a threat to existence cannot be demanded as a general rule. Rather, if the rental agreement is divided into monthly periods, the equivalence between performance and payment in the individual periods is to be taken into account. In concrete terms, this means for a rent calculated on a monthly basis that the economic value of the leased property must be compared with the economic value of the rent paid for each individual month. If, however, the rental store has to remain closed for the major part of the month due to an official order, the interest in equivalence is disturbed to such an extent that an adjustment of the contract is mandatory. This applies all the more since none of the parties saw the pandemic coming, let alone caused it. At most, the 50-50 ratio should be modified in justified individual cases.
As it turns out, the fundamental dispute is now also coming to a head in the case law of the higher courts. Both the Karlsruhe Higher Regional Court and the Dresden Higher Regional Court have allowed an appeal to the Federal Court of Justice. A clarifying decision by Germany's highest civil court is expected in the course of 2021.
Nevertheless, the decision of the OLG Dresden already gives tenants negotiating leverage when renegotiating the rent.
Do you have any questions about COVID-19 pandemic rent defaults or want to renegotiate your rent? We will be happy to give you advice! Please contact us by phone at +49 351 44753 0, by e-mail at email@example.com or visit our website www.schaffrathlaw.de.
By your side
Schaffrath & Metzmacher Team
24 March, 2021