Commercial tenancy law

In order to protect themselves from legally possible terminations, the tenant of commercial space must make absolutely sure to conclude a commercial lease in writing. For contracts with a term of more than one year, this is also required by the BGB (§§ 126 BGB, 550 BGB, 578 BGB). If this is not taken into account, the contract is deemed to be a tenancy agreement with an indefinite period of notice.

To ensure that the written form is observed, a commercial tenancy agreement must contain all important contractual terms. This includes in any case all terms and conditions of the leased property, the term of the contract, the amount of rent and all relevant pecuniary services and benefits in kind. Changes to the contract must also be made in writing.

Today, mixed use of properties is also frequently practised. Often a trade is carried out in one’s own flat or house, sometimes with large commercially used areas or even just from one’s desk.

A commercial use always exists if the tenant has moved the exercise entirely or at least partially into the residential environment.

In these mixed tenancies, an evaluative consideration is then made as to where the tenant’s main focus lies. It is not exclusively the distribution of the living space that is taken into account, but rather the main purpose of the tenancy is determined. Depending on the assessment, either commercial or residential tenancy law is then applied to the contract.

Commercial leases are almost always concluded for a fixed period, often 5 or even 10 years. During this period, neither the landlord nor the tenant can terminate the contract unless there is a valid reason for termination. If no fixed term is agreed, tenancy agreements for commercial premises can also be terminated with notice without reasons.

If a tenant does not meet his contractual payment obligations or does not meet them in full, he may have to face an effective extraordinary termination. Even if the tenant settles the arrears within a certain period, this does not protect him from termination. This is particularly serious for the tenant, as in this case the landlord can demand the direct surrender of the rented property. The terminated tenant, on the other hand, is obliged to pay damages until the end of the term of the tenancy agreement, and this in the amount of the contractually agreed rent.

For example, in the case of a 5-year lease, if the tenant is terminated without notice within the first year, in the worst case he will have to pay the rent for another 4 years. If the commercial property can only be re-let at a lower price, the former tenant must pay the difference until the end of the term of his original lease. Even if the new commercial tenant rents at the same rent, the former tenant may still be entitled to damages if the new tenant also fails to pay rents.

Since many regulations from residential tenancy law do not apply to commercial tenancy law and commercial tenancy law is only very poorly regulated in the BGB, disputes are decided here according to the principles of case law.

In this context, issues such as protection against competition, turnover rent or the duty to operate a business can be assessed.

Since the regulations from case law are extensive and the legal basis very sparse, professional contract drafting is of particular importance. In this context, an experienced lawyer can be an important partner in the preparation and conclusion of a commercial lease.