Commercial space rental during the corona pandemic

The state closure orders for traders caused by the corona pandemic have been causing significant financial challenges for tenants since March 2020. In particular, paying the rent is a particular difficulty, as the rented premises cannot be used and the tenants suffer high losses. The question arises as to whether commercial tenants can reduce or even withhold their rent due to the area-wide closure orders.

This question has so far been assessed inconsistently by German courts. So far, tenants have relied on rent reductions, as the area-wide closure orders as a result of the outbreak of the corona pandemic would represent a defect in the rental property. This view was initially followed by the LG Munich (judgment of September 22, 2020 - 3 O 4495/20) and the LG Kempten (judgment of December 7, 2020 - 23 O 753/20).

However, the majority of the courts denied that there was a lack of rent (see e.g. LG Heidelberg, judgment of 30.07.2020 - 5 O 66/20; LG Frankfurt a.M., judgment of 07.08.2929 - 2-5 O 160/20). The official closure order is a circumstance outside of the rental property, which in principle does not represent a defect. Such a case only occurs if the circumstances outside of the rented property have a direct influence on the condition, location or nature of the rented property. This would not apply to the official closure orders, which is why such claims by tenants were rather rejected.

In order to ensure clarity, the legislature took action and clarified with the new provision that came into force on December 31, 2020 under Art. 240 § 7 EGBGB in conjunction with § 313 BGB that

The question of whether and, if so, to what extent a subsequent contract adjustment can be made remains unanswered. It is still up to the courts to clarify this question.

For example, the LG Munich decided (judgment of February 12, 2021, AZ. 31 O 11516/20) that despite the existence of a disruption to the business base due to the officially ordered closings, an amendment to the contract is ruled out. This was justified with the high turnover and the excellent economic situation of the tenant. These would not have justified a reduction in rent.

In another case, however, the Dresden Higher Regional Court decided (judgment of February 24, 2021, Az. 5 U 1782/20) that the disruption of the business basis was the reason to adjust the contract by reducing the rent. The basic rent was reduced to 50 percent.

Conclusion

Although there are still many unanswered questions, some general statements can be made.