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On the admissibility of coronavirus-induced rent reductions

In recent decisions on commercial lease agreements, two Higher Regional Courts (Oberlandesgericht, OLG) simultaneously ruled on adjustments made to agreements because of the coronavirus pandemic within the context of Section 313 of the Civil Code (Bürgerliches Gesetzbuch, BGB); however, the two courts came to different conclusions.

In their rulings from 24.2.2021, the Karlsruhe OLG (case reference: 7 U 109/20) and the Dresden OLG (case reference: 5 U 1782/20) arrived at different views of the preconditions for making adjustments to agreements in the form of rent reductions. The decision of the Dresden OLG was based on the assumption that for the period when a textile clothing store was officially ordered to close it only owed the amount of rent that had been reduced by half; however, the Karlsruhe OLG took the opposite view. Judges at the Karlsruhe OLG assumed that the tenant had not provided enough information on whether or not it had been possible to sufficiently offset the monthly declines in sales through online sales, short-time working or savings on expenditure. Interestingly, in both cases the textile clothing markets affected belonged to the same business chain. 

These rulings illustrate that it is currently not possible to draw definitive conclusions as to which conditions would have to be satisfied so that the right to make contractual adjustments to a commercial lease agreement in accordance with Section 313 BGB would arise in the event of an official order to close. There will be no clarity in this respect until the Federal Court of Justice (Bundesgerichtshof, BGH) gives a ruling. As both rulings permitted appeals, it is possible that the BGH will very soon be able to take an in-depth look at this issue.

Recommendation: In the meantime, we would recommend that you seek dialogue with your landlord and, with reference to the Dresden OLG’s ruling, make your rental payments on the proviso that they could be refunded.

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