Up Again Germany: Premises and Workplace

Employment

1. What are the key things that employers have to consider in relation to social distancing in the workplace, e.g. open plan or spacing of desks, use of shared equipment, limited access to communal facilities, canteen / restaurant, etc.?

As mentioned in question 4, the most important point is keeping a distance of 1.5 m between persons. If this is not possible, alternative protective measures must be taken. Transparent partitions must be installed in places frequented by the public and, if possible, between workstations wherever a safe distance cannot be maintained (this also includes cars or other kinds of transportation).

For office workers, free office capacity must be used and work organised in such a way that multiple occupancy of office premises can be avoided or safe distance maintained.

Sufficient distancing must be ensured in break rooms and canteens, for example by placing tables and chairs far enough apart. Care should be taken to avoid queues at food counters, tray-return points and checkouts. However, canteen closure should also be considered, since such areas are unlikely to comply with the distancing requirements.

Distances of 1.5 m must also be observed during any work-related (customer) contact outside the workplace. If the work cannot be done by one person alone, a fixed team (two or three employees) must be deployed to reduce the number of different contacts among employees.

2. What key hygiene and/or infection prevention measures will employers have to take to ensure a safe workplace e.g. provision of adequate handwashing facilities, regular deep cleaning of offices, etc.?

According to the SARS-CoV-2 Occupational Safety and Health Standard of the Ministry of labour, liquid soap and towel dispensers must be made available for hand cleaning. Sufficient room cleaning and hygiene must be provided for, if necessary with modified cleaning intervals. This applies especially to washroom facilities and communal spaces. Door handles and handrails should be regularly cleaned.

Regular ventilation improves hygiene and air quality, as the number of pathogens in the air increase in enclosed spaces. Additionally, the risk of infection via air conditioning is considered low overall. So switching off air conditioning is not recommended.

Also for work outside the workplace, facilities for frequent hand hygiene must also be provided close to where employees are deployed.

Company vehicles must be equipped with hand-hygiene and disinfection products, paper towels, and waste bags.

For necessary work-related trips, the same vehicles should not be used by multiple employees, if possible. The interiors must be cleaned regularly.

Real Estate

3. Are there any specific obligations, liabilities or duties of conduct imposed on landlords, tenants or visitors with respect to

  • the use or re-use and decontamination of premises;
  • care, cleaning and maintenance of the exclusive and common areas;
  • reporting requirements and/or measures in case of identified infections;
  • health and safety issues - e.g. recommissioning water systems to avoid virus, installation of plexiglass screens, moving desks to comply with distancing. remodulation of fire prevention strategies (entrance/exit routes)?

Is any distinction made between asset classes?

Given that Germany is organised as a federal state, most rules and provisions do not equally apply in the entirety of Germany; each federal state may have its own rules and legal responsibilities.

However, from time to time the federal and state governments agree on guidelines to limit social contacts – these are (currently) effective until 10 January 2021, although it is expected, given statements by political leaders, that the current restrictions will continue beyond this time as infection rates remain high.

The federal and state governments agreed on guidelines at the end of October to limit social contact – the restrictions are currently more or less unified at federal state level - apart from a few deviations. According to these guidelines:

  • travelling, staying and coming together in public places and buildings is limited;
  • people must keep a minimum distance of at least 1.5 m from other people in public; and
  • no major events or people gatherings are allowed.

The federal states are responsible for the exact regulations on site.

Tenants are responsible for care and cleaning of the exclusive areas unless otherwise stipulated in the lease agreement. This also applies to tenant-owned facilities in the exclusive areas. The position would be different if the virus contamination were to be regarded as an impairment of use coming from the building. If the virus infection or suspicion concerns, for example, the general installations such as ventilation/air conditioning, or the water supply of the building, the landlord must act to prevent intrusion into the exclusive rental areas.

Usually, the landlord is responsible for care, cleaning and maintenance of the common areas and common facilities.

Reporting obligations according to German Infection Protection Act (Infektionsschutzgesetz - IfSG) to the health authorities for suspected cases apply to doctors and laboratories that have detected a positive test, but (currently) not to landlords, tenants or visitors. However, in suspicious cases, the persons concerned should of course be advised to seek medical treatment.

In general, there is no obligation to carry out purely prophylactic cleaning and safety measures unless there is a real danger detected.

However, in order to exclude liability within the scope of the landlord's duty of care, the building's facilities should be operated in accordance with general best practice in building management (e.g. carrying out maintenance when due and prophylactic cleaning and safety measures when necessary in accordance with the use of the respective building).

Below are some distinctions at federal state-level regarding specific obligations, liabilities or duties of conduct imposed on tenants or visitors with respect to the use or reuse of premises:

  • There are no specific obligations or regulations for certain asset classes. Obligations and regulations apply to specific sectors (Branchen) and industries of the tenants.
  • At the level of the federal states, an obligation to wear masks (Maskenpflicht) has been in force since (depending on the respective federal state) 23 to 29 April 2020 and until now. This applies especially to the use of public transport and retail trade in all federal states. Hairdressers or beauty salons and, depending on the federal state, other industries, for example, cinemas and gastronomy are also subject to this obligation. It is the tenant’s responsibility to comply with these regulations.
  • Currently, only stores for unavoidable daily needs such as food and beverage markets, post offices, banks, doctors, lawyers, drugstores, pharmacies, pet supply stores or wholesalers are allowed to open nationwide. Event sites, cinemas, museums, all kind of retail stores, hotels and restaurants are currently closed by order of the authorities or in accordance with the provisions of the applicable state ordinances. It is the tenant’s responsibility to comply with these regulations and closures.
  • Tenants must observe special regulations in the individual federal states for visits and hygiene regulations in nursing and retirement homes and institutions for disabled persons. It is the tenant’s responsibility to comply with these regulations.
  • The reopening of gastronomy, hotels , retail or cultural institutions is currently unpredictable.

4. Are there any rent suspension measures and/or stay of recourses and actions (including eviction) or any Government support initiatives such as a furloughed building grant scheme (if so, maybe only a part of the building should be re-occupied)? When rent suspension measures are available, what is the usual payment mechanism and timing agreed to by the parties?

In the area of residential and commercial lease agreements, the right of the landlord to terminate existing lease agreements is restricted by new legislation adopted and announced on 27 March 2020 to mitigate the impact of the COVID-19 pandemic with respect to German civil law, insolvency law and criminal proceedings. The tenant’s obligation to pay the rent in due time generally remains in force.

However, according to the new legislation of 27 March 2020, the landlord’s right of termination due to unpaid rent will not be effective if:

  • the tenant did not pay the rent between 1 April 2020 and 30 June 2020 despite it being due; and
  • the non-payment of the rent was due to the effects of the COVID-19 pandemic.

A termination right for unpaid rent within this period is suspended until 30 June 2022. The unpaid rent remains due, so the tenant is obliged to pay default interest. The provisions applied until 30 June 2020 and could have been extended under certain conditions; although there were discussions on the extension of the termination right suspension, the provisions have not been extended.

Regardless, many lease parties have agreed to deferral or rent reduction agreements to mitigate the economic impact of the pandemic.

Of great importance in commercial tenancy law is the most recently enacted legislation with reference to Section 313 of the German Civil Code (BGB), the so-called "Störung der Geschäftsgrundlage" (= frustration of contract). On 17 December 2020, the German Bundestag inserted a new Section 7 in Article 240 of the Introductory Act to the German Civil Code (EGBGB). Its wording reads:

"If, as a result of government measures to combat the COVID 19 pandemic, leased land or leased premises that are not residential premises cannot be used for the tenant's business or can be used only with considerable restrictions, it shall be presumed that, in this respect, a circumstance within the meaning of Section 313 (1) of the German Civil Code [BGB] that has become the basis of the lease has changed seriously after the conclusion of the contract."

Section 313 (1) BGB itself reads:

"If circumstances that have become the basis of the contract have changed seriously after the conclusion of the contract and if the parties would not have concluded the contract or would have concluded it with different content if they had foreseen this change, adjustment of the contract may be demanded to the extent that one party cannot reasonably be expected to adhere to the unchanged contract, taking into account all circumstances of the individual case, in particular the contractual or statutory allocation of risk."

Section 313 BGB thus grants a claim to contractual adjustment against the landlord as a legal consequence in the event of a serious change in the contractual basis. The trend in case law to date on the question of a claim to contractual adjustment under Section 313 BGB has been highly inconsistent, with a slight majority denying the claim, although in individual cases it has been possible to enforce significant rent reductions in court.

In particular, government-ordered closures as part of government measures to combat the COVID 19 pandemic are now legally presumed to be reasons for adjusting or reducing the rent. However, even after the new statutory regulation and legal presumption, the tenant must continue to substantiate and prove in individual cases that the parties would not have concluded the agreement or would have concluded it with different content if they had foreseen the change - due to government-ordered closures of stores and facilities - and that, taking all circumstances into account, an adjustment of the agreement is deemed justified.

5. Are there specific tax reliefs on payment or collection of rent instalments? Do they apply subject to actual payment or regardless? Do they apply generally or only to specific asset classes?

Germany has not implemented any specific tax relief regarding payment or collection of rent instalments.

6. Are there any measures regarding relief from the performance of real estate-related contractual obligations?

There are no active measures in place, but a tenant is, for example, not obliged to fulfil its contractual operating obligation (Betriebspflicht) if its premises are subject to a government-ordered closure (behördlich angeordnete Schließung), as it would be engaging in unlawful conduct.

7. Are there any credit facilities in place to mitigate loss of income for landlords?

There are several government support measures from several institutions (at federal and federal state level) applicable to both tenant and landlords / real estate companies facing difficulties due to COVID-19.

There are no special credit facilities/programs for landlords / real estate companies. For an overview, please see our Overview of Government Assistance in Response to COVID-19, edition 3.

8. Is there any relief from loan repayments / enforcement of loans secured against properties?

New legislation provides the right only for consumers and micro-enterprises (not the usual commercial loan agreements) to temporarily refuse to provide payments or services under loan agreements until 30 June 2020. This only applies for loan agreements entered into before 8 March 2020.

This right to refuse only exists if, due to the consequences of the COVID-19 pandemic, the consumer or micro-enterprise is not able to perform without jeopardising a fair standard of living of the consumer, or the economic foundations of the business. This is intended to prevent those affected from being cut off from basic services if they are no longer able to meet their payment obligations as a result of the crisis.

Payment obligations from consumer loan agreements due by 30 June 2020 are deferred by law by three months if the payment obligation cannot be met due to the COVID-19 pandemic.

For the period after 30 June 2020, lenders and consumers are urged to find an amicable solution. If they cannot, payments must be resumed from 30 June 2020. However, in order to avoid a double burden on consumers due to the maturity of deferred and current instalments from that date, the legislation provides for an extension of the contract term by three months.

This is intended to prevent loan agreements from being terminated, and to secure the regular monthly accumulation of payments for consumers after the deferral has expired.

The provisions applied until 30 June 2020, but could have been extended; neither the legislator nor the government have made use of this possibility.

9. Are public services necessary to complete the sale, acquisition or other operation of real estate assets or companies or to establish the right to open for business (planning authorities, notary public, Land Registry, Companies’ Registry, etc.)?

For real estate transactions, the involvement of public authorities is required. For example, the purchase agreement must be conducted in front of a notary, and the land registry issues entries in the land register necessary for the transfer of ownership.

The general rulings and regulations (Allgemeinverfügungen, Verordnungen) on, for example, the reopening of specific stores or sectors (Branchen) apply to all of their addressees and do not need an additional permit or public service. Individual administrative acts (Verwaltungsakte) regulate individual cases for which further public services might be necessary on a case-by-case basis.

Depending on the property's location, there might be further permits and statements from public authorities necessary (e.g. due to nature protection, water protection, monument conservation or public pre-emption rights).

10. Are there any specific processes or protocols available to consummate real estate operations enabling them to comply with any required social distancing (e.g. electronic signature, etc.)?

There are no specific or new processes regulated by the authorities. Notarisations at the notary's office can be carried out with representatives without power of attorney; employees of the notary act as representatives without power of attorney and their signature is subsequently authorised by the party or the party's lawyer in front of the notary or another notary if the parties want to avoid personal/social contact and long meeting sessions together with other people in the notary´s office.

Another option is to carry out the usual notarisations, but with a larger distance between, and a plexiglass barrier in front of, the participants.

11. Are contractors who were carrying out works within the premises obliged to resume them? Can building sites reopen when they were closed down? Are there any specific provisions in relation to certain asset classes authorising continuation / resumption of works (e.g. healthcare structures)?

In general, building sites were not broadly closed in Germany during the pandemic and, in general, contractors were allowed to continue their work.

The Federal Ministry of the Interior, the Federal Ministry for Building and Homeland Affairs and the Federal Ministry of Transport and Digital Infrastructure have decided by decree to continue construction measures/works for structural engineering, road construction and hydraulic engineering. As such, there is no official shutdown or reopening of building sites in the real estate sector.

However, contractors carrying out works must comply with the general regulations on hygiene measures and contact restrictions and there might be delays in the construction process.

12. Are there remedies or contractual arrangements available to address impossibility or delay for a party to handover premises to another which are/were to be constructed or refurbished, or for such other party to take over those premises?

This mainly depends on the individual terms of a lease agreement: whether they contain explicit provisions on the time of handover / refurbishment measures and, in this regard, on delays. In most cases, rights to withdrawal, damage claims or contractual penalties are typically excluded in the absence of negligence by the landlord.

Lease agreements with a building obligation before handover often contain a force majeure clause, which regulates the occurrence of delay in the event of force majeure (höhere Gewalt) and rights of withdrawal based on such happening. For the most part, pandemics are seen as a case of force majeure. This means that neither party is responsible for those circumstances, but this very much depends on how the clause in question was drafted, and how it is interpreted.

In the absence of explicit contractual provisions dealing with delay or impossibility of handover, the provisions of the German Civil Code (BGB) apply.

Unless there are any deviating contractual agreements between contractor and landlord, the procurement of materials, for example, is the responsibility of the contractor. If the lack of material is due to force majeure (the pandemic situation), there is no culpable breach of duty on the part of the contractor that could be attributable to the landlord. If the VOB/B (German Construction Contract Procedures) have been agreed on between contractor and landlord, Section 6 Para. 2 No. 1 c) VOB/B stipulates that in the event of force majeure or other circumstances that are unavoidable for the contractor, the execution deadlines shall be extended.

In individual cases, the landlord could under certain circumstances be held responsible for the fault of its contractors constructing or refurbishing the leased premises, when the contractor’s behaviour leads to impossibility or delay of handover.

13. Has the duration of validity of administrative authorisations pertaining to development/construction of real estate assets (in particular planning authorisations) been extended?

There are no explicit and automatic extensions of any administrative authorisations – though authorities handle such requests very openly).

The following applies to building permits: if, due to the COVID-19 pandemic, there are delays in the start or progress of construction work (for whatever reason (e.g. due to interrupted supply chains or lack of workers), the respective building regulations of the federal states (Landesbauordnungen) indicate how long a building permit is valid (depending on the respective federal state, three to four years without the start of construction; after start of construction, no interruption of more than one to four years).

Most of the building regulations of the federal states allow for the extension of a building permit on request. The extension periods are one to three years (there are some exceptions, e.g. Brandenburg, where there is no extension, but a validity period of six years).

Litigation and Regulation

14. Is the use of disclaimers for visitors or others coming on to the site of business useful for limiting potential future COVID-19 claims?

In general, the answer is no. Under German law, a limitation of liability by way general terms and conditions (which would include such general disclaimer) is subject to conditions, prohibiting a limitation of liability for certain legal interests (e.g. body or life), degrees of fault (intent, gross negligence) or essential contractual duties. Liability for potential future COVID-19 claims can therefore not be generally excluded and visitors might still be able to bring such claims despite a disclaimer.