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 |  Dennis Wiegard

Corona-related closure - Only half commercial rent owed

In its ruling of April 1, 2021 (Case No. 8 U 1099/20), the Berlin Higher Regional Court decided that in the event of a government-ordered store closure due to the Corona pandemic, the commercial rent can be reduced by half due to the cessation of the basis of the business, without it being necessary to establish a threat to the tenant's existence in the individual case.

In the case at hand, a tenant (operator of an amusement arcade) had only paid half of the rent for the months of April and May 2020, as he had not been able to use the premises in the contractually intended manner at all since the outbreak of the pandemic. The landlord sued for payment of the remaining amounts for the months of April and May 2020. The tenant defended itself against this by way of counterclaim. The agreed rent was to be reduced by 50% due to disturbance of the basis of the contract. The Court of Appeal now ruled in favor of the tenant.

The parties entered into the lease before the Corona pandemic began. Thus, neither party could have imagined at the time of entering into the lease that there would be a widespread shutdown of public life due to government restrictions.

"It therefore stands to reason that if the contracting parties had foreseen this change, they would have concluded the lease with a different content. In this regard, it is reasonable to assume that a rent reduction for the period of a two-month forced closure of the arcade would have been agreed if the parties had foreseen the restrictions in the wake of the Covid pandemic."

According to the Berlin Higher Regional Court, the state measures (closure orders) do not represent a "normal" risk of unsuitability for use. The risk associated with the disruption of the basis of the contract can therefore not be assigned to any contracting party alone on a regular basis.

„The government-ordered shutdown due to the pandemic represents such a far-reaching, unforeseeable, outside the sphere of responsibility of both contracting parties and potentially existentially threatening encroachment on the possibility of use presupposed in the contract that - taking into account the circumstances of the individual case - the disadvantages are to be borne jointly and severally by both contracting parties and the rent is therefore to be reduced by half in the event of a complete ban on operations. In this context, a concrete threat to the tenant's existence did not have to be positively established on the basis of his business data, but the "possibly existentially significant consequences" within the meaning of the case law of the Federal Court of Justice were also to be assumed if an ordered closure lasted for a month or longer."

The judgment is not yet final. The revision to the BGH is possible and would be welcome solely for a clarification function.

 

Düsseldorf, den 2021, April 19th

Attorney at Law Dennis Wiegard

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