One appeal ruling follows the next – Karlsruhe Higher Regional Court (Oberlandesgericht Karlsruhe) rules in favour of the landlord

The second round of tenancy law disputes about contractual adjustment claims is now considered to be finally open. Many appeal courts are currently already dealing with the question of possible rent reductions at times of official closure orders (behördliche Schließungsanordnungen). In our recent update we presented the judgement of the Dresden Higher Regional Court (OLG Dresden - 5 U 1782/20), which decided that a 50% reduction of the basic rent was justified. The OLG Karlsruhe (7 U 109/20), however, took a different view and fully upheld the landlord's claim. Further rulings are also expected from the Higher Regional Court in Munich (OLG München) and Frankfurt am Main (OLG Frankfurt am Main) in the near future.

The OLG Karlsruhe published its decision of the previous day on 25 February 2021 and thus ruled at the same time as the OLG Dresden on the contract adjustment claim in times of COVID-19 -related official closure orders. However, the two decisions had different outcomes.

The OLG Dresden considered an equal distribution of risk on both sides to be fair in the specific individual case. The OLG Karlsruhe, on the other hand, did not consider an adjustment of the contract based on his individual case. What is astonishing, however, is that both OLG cases apparently concerned the same textile retailer belonging to a chain. This inevitably raises some questions with regard to the weighing of individual cases. Having a look at the reasoning of the OLG Karlsruhe judgement, it is strongly oriented towards the first instance, the LG Heidelberg (30.07.2020 - 5 O 66/20). The OLG Karlsruhe clarifies that an adjustment of the contract can only be considered if the tenant has to fear the destruction of his livelihood or at least his economic progress is seriously impaired. The landlord's interests must also permit an adjustment of the contract. On the tenant's side, the decrease in turnover has to be compensated by online trade, public aid packages, saved expenses and continuing assets. In connection with the threat to existence, according to the OLG Karlsruhe, in the case of a tenant belonging to a group, it must also be taken into account that these may be economically more efficient than individual branches.

In the past, several other district and regional courts have come to the same conclusion with similar argumentation structures. Thus, in chronological order, the judgements of the LG Mannheim (23.07.2020 - 23 O 22/20), LG Zweibrücken (11.09.2020 - HK O 17/20), LG Frankfurt am Main (02.10.2020 - 2-15 O 23/20), AG Cologne (04.11. 2020 - 206 C 76/20), LG Wiesbaden (05.11.2020 - 9 O 852/20), AG Düsseldorf (10.11.2020 - 45 C 245/20), LG Stuttgart (19.11.2020 - 11 O 215/20) and LG München I (25.01.2021 - 31 O 7743/20 and 12.02.2021 - 31 O 11516/20).

The OLG München, also indicates initial tendencies against a contractual adjustment claim in its reference decision of 17 February 2021 (32 U 6358/20). Accordingly, the application of section 313 paragraph I of the German Civil Code (Bürgerliches Gesetzbuch- BGB) should not also lead to the circumvention of legislative valuations. Furthermore, a reduction of the rent could not be made according to a certain scheme. Moreover, when considering the economic situation of a tenant belonging to a group, the parent company of the group must also be examined more closely. An adjustment of the lease agreement must therefore remain the exception. According to the OLG Munich, such an exceptional situation does not exist at present. The parties are nevertheless required to state their position within two weeks. The final decision is therefore still pending.

Towards the middle of the month, two further dates have been set before the OLG Frankfurt am Main. In both cases the tenants lost in the first instance. Here, too, it remains to be seen whether this OLG will also follow the previous decisions. Ultimately, however, the Federal Supreme Court (Bundesgerichtshof – BGH) will have the last word. For the two appeal decisions of the OLG Dresden and the OLG Karlsruhe, the right of appeal at the BGH has already been granted.

For more Update in Commercial Tenancy Law, click here.