Commercial rents in lockdown: lawyer gives traders hope

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The plight of many retailers is increasingly desperate.

Some of them have only just been able to make tentative attempts to open the door and receive a few customers using the Click & Meet registration process.

But now it threatens to close again.

It is wrong to hold the trade “disproportionately liable for the renewed increase in the number of infections”, according to an open letter that some bosses of large retail chains, including Kik, Tedi and Pocco, addressed to the Chancellor and the country leaders at the weekend having sent.

Retailers, but also restaurateurs and office tenants, are not only made "liable" for increasing numbers of infections.

They have also been permanently liable for paying the monthly rent for their empty shops and orphaned restaurants since the beginning of the pandemic.

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Practically since March 2020, the majority of landlords have been demanding full payment of the monthly rent for commercial space.

Smaller tenants in particular are therefore making use of their financial reserves.

There are no statistics, but a good part of the state's corona aid is likely to be passed on to investors, pension funds and private landlords via ongoing rent payments.

Hope for lower rent

"Many landlords are not accommodating their retail tenants in lockdown and are unwilling to negotiate," says the general manager of the retail association, Stefan Genth.

According to an HDE survey from February, tenants and landlords agreed on an adjustment of the rent in almost 40 percent of the tenancies.

According to the HDE, 60 percent of the retailers affected by the store closings are still waiting in vain for a concession from property owners.

However, from the point of view of these tenants, there is cause for hope.

For a few weeks now, there have been increasing signs that commercial tenants could be entitled to let their landlords share in the loss of sales through a lower rent.

And retrospectively, i.e. also for lockdown phases in the past.

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The Dresden Higher Regional Court decided on February 24th that the tenant of a shop affected by the corona lockdown only had to pay 50 percent of the rent demanded.

Specifically, it was about the period of the first complete closure by the Saxon State Ministry for Social Affairs and Social Cohesion in April 2020. The Chemnitz Regional Court had initially obliged the tenant to pay the full rent.

This judgment was overturned in Dresden (5 U 1872/20).

Lawyer: Rooms are no longer usable

It is only about a short period in the past year, but the ruling could serve as an example for other cases, both in 2020 and 2021. The pivotal point is a clarification by the legislature from the beginning of this year.

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Accordingly, a corona lockdown is to be seen as a "disruption of the business basis" in accordance with Section 313, Paragraph 1 of the German Civil Code - practically something like force majeure.

Therefore, a division of the cost burden between tenants and landlords is justified, judged the Dresden judges.

Should other courts come to a result more often because of the clarification, such as the OLG Dresden, rent payments in the billions would probably be in question.

Volker Römermann, board member of Römermann Rechtsanwälte AG and honorary professor at the Humboldt University in Berlin, shares the view of the Dresdeners: "I believe that the financial burden due to the loss of the business basis between tenant and landlord is right - and since the clarification Article 240 is also considered realistic in case law, ”said Römermann.

"I dare the prognosis that the courts will follow suit in the near future and find that the usability of the rooms is no longer given in the event of state prohibitions, that the contract would not have come about under these circumstances and that the tenants would not be reasonable, to bear the full financial burden of the unexpectedly occurring risk alone. "

Lawyers disagree

From Römermann's point of view, this is exactly a decisive argument.

Lawyers call this a “hypothetical element”: If there had been a pandemic and lockdown at the time the contract was signed, a tenant would hardly have signed.

And secondly: under the given circumstances, a continuation of the contract is "unreasonable".

But this is exactly what some lawyers see differently.

Finally, there are also large solvent companies as tenants who could fall back on reserves.

But Römermann has an eye on the economic balance, whether big or small.

He sees good chances for tenants to even reclaim payments from last year: "Corresponding lawsuits and corresponding court decisions also apply retrospectively, so you can request a split from the start of the disruption of the business base, i.e. from the start of the pandemic."

Richter: Renovation would have been possible

So far, however, not all judges see it that way.

This is shown by another ruling by the Munich Higher Regional Court on January 25 of this year.

One tenant closed his hotel in April, May and June 2020 and no longer paid any rent.

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In principle, hotel bookings were possible for business travelers during that time.

But according to the hotel owner, this would only have enabled a maximum occupancy of 14 percent, and the costs would have been too high.

That's why he shut down.

The judges were of the opinion that he should have opened anyway.

And even if no hotel guests had come, he would still have been able to use the rooms, for example to renovate - this is actually what the verdict says (31 O 7743/20).

The landlord can now demand the full rent for all months.

Expert Römermann finds this "almost cynical" in view of the economic situation.

HDE complains "legal hanging game"

Other judges already ordered retailers to pay in full on the grounds that they could have used their business as a warehouse.

The judge's request to tenants to use up their financial reserves before the landlord would have to be charged is also common.

"I think the reasoning of some judgments that tenants should be able to reasonably expect full payment as long as they still have any financial reserves," says Römermann.

“Anyone who would be a millionaire should not claim any rights to adapt.” The reasonableness of using a thing cannot depend on personal wealth.

“In Germany, it is generally assumed that a tenant bears the full business risk of the lease,” says the lawyer.

"In spite of the pandemic, most local and regional courts were judged according to this point of view in the past year."

But that is not a matter of course, as a look across the borders shows.

In Austria, according to Römermann, "according to the law, landlords bear the full risk of an external shock, such as war, flood or state closure due to an epidemic or pandemic".

In the Austrian paragraph 1104 ABGB (General Civil Code) it says: “If the object taken into inventory cannot be used or used at all because of extraordinary coincidences, as a fire, war or epidemic, large floods, storms, or because of total malformation, so is the lessor is not obliged to restore, but no rent or lease is to be paid either. "

The real estate industry sees the state as an obligation

In the German real estate industry, of course, you see everything very differently.

"A general 50:50 split would put tenants who have been hit particularly hard economically at a disadvantage and those who might even benefit from the pandemic would be unjustifiably favored," says Andreas Mattner, President of the ZIA industry association.

"But we do not want to let the state out of responsibility, because the closings, which are even carried out in violation of the Basic Law, as the courts regularly certify, are due to state intervention."

The ZIA proposes a rent assistance program based on the model of Canada and Sweden.

Accordingly, the state would compensate for any loss of rent so that landlords receive the full amount.