Jacobsen + Confurius

Rent reduction or rent adjustment due to the Covid-19 pandemic for commercial rental and lease agreements

Secretly, quietly and quietly, the German Bundestag passed a law on December 22, 2020 that opens up the opportunity for a rent reduction for commercial tenancies affected by the Covid-19 pandemic.

The law contains the following regulation:

“If rented properties or rented rooms that are not living spaces cannot be used for the tenant’s business or can only be used with considerable restrictions as a result of government measures to combat the Covid-19 pandemic, it is presumed that a circumstance within the meaning of § 313 Paragraph 1 of the Civil Code, which became the basis of the rental agreement, changed seriously after the conclusion of the contract. This provision also applies to leases.”

One can assume that with this regulation the state wants to keep itself free of compensation payments and pass them on to the landlords. The payment of state compensation could possibly depend on the tenant having previously attempted to obtain a reduction in the commercial rent based on the aforementioned law.

The new legal regulation now creates the (rebuttable) presumption in favor of the tenant/lessee that one of the conditions for an adjustment of the rent is met and it is the landlord/landlord’s responsibility to rebut the presumption. This means that the chances of enforcing a rent reduction or rent adjustment have increased significantly.

So far, the courts have been rather cautious in their judgments when it comes to recognizing a rent adjustment or rent reduction due to the Corona pandemic.

With the new law, the legislature has intervened in the ongoing legal debate and made it clear that it fundamentally considers a request for adjustment to be justified. In addition, it was also clarified that restrictions under public law can constitute a deficiency in tenancy law, which can justify a rent reduction in accordance with Section 536 of the German Civil Code (BGB).

From our point of view, this means that commercial tenants – not least in view of possible consideration in the context of state reimbursement claims – should attempt to demand a rent adjustment from their landlord in a timely manner if the use of the rental space is restricted by official orders due to the corona pandemic is impaired or excluded. However, it should be noted that the other eligibility requirements, in particular the unreasonableness of sticking to the unchanged contract, must still be proven.

For commercial landlords, conflicting questions arise: How do you respond to requests for contract adjustments or demands for rent reductions? The particular question that arises here is to what extent and for how long the contract adjustment should be carried out and how the economic consequences can be mitigated, especially when financing the real estate.

We would be happy to help you solve these questions. Please talk to us.


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