Commercial tenancy law during the pandemic

Once again, a court decision has been issued in the matter of rent claims at times of official closure orders. This time, the KG Berlin (Judgment dated 1 April 2021 - 8 U 1099/20) held that a 50% reduction in rent during the first lockdown in the last year was justified. 

In the reasons for the judgment, however, the appellate court, unlike many other courts so far, does not address the financial circumstances and possibilities of the individual case. What has so often led other courts to reject the normative element of Section 313 of the German Civil Code (Bürgerliches Gesetzbuch – BGB) (frustration of contract – Störung der Geschäftsgrundlage) and thus to reject the contractual adjustment claim was not assessed in greater depth by the KG. Rather, the KG based its decision on the fact that the far-reaching state interventions (behördliche Schließungsanordnungen) brought about a so-called systemic crisis. So the risk was to be shared equally between landlords and tenants. This is no longer a "normal" risk of use on the part of the tenant. Disadvantages arising from such a far-reaching, unforeseeable and potentially existentially threatening intervention in the use of the rental object, which lies outside the sphere of responsibility of both contracting parties, are to be borne jointly by both parties. Existentially significant consequences for the tenant are already to be assumed if a state-ordered closure lasts for a month or longer. An existential threat in an individual case, on the other hand, did not have to be positively established.

The special feature here was that the tenant was an operator of a gambling hall who, unlike restaurateurs or retailers, could not have relied on any other source of income. He had simply been denied operation by the closure order.

The KG allowed an appeal to the Federal Court of Justice in its decision.