Corona: According to the BGH, retailers can cut rents due to lockdowns

The lockdown due to the corona pandemic also raises many legal questions – what about shop rents, for example, when the shops had to close and could not serve customers? Do I have to pay full rents if the retailers are not making sales? Now there is a judgment of the BGH, which is receiving a lot of attention in the economy in Germany.

Retailers can therefore be entitled to pay less rent in the event of a pandemic lockdown. The Federal Court of Justice decided on Wednesday in Karlsruhe that the economic consequences of the officially ordered closure of the shop had to be considered on a case-by-case basis. It was about a legal dispute between the textile dealer Kik and the landlord of a Kik branch near Chemnitz. (Az. XII ZR 8/21)

After the state of Saxony ordered the closure of almost all shops due to the corona pandemic in March 2020, Kik did not pay rent for the shop in April. Because of this, the landlord, a property management company, sued the company. The Chemnitz Regional Court sentenced Kik to pay the full rent of 7854 euros for the month, the Dresden Higher Regional Court reduced the amount by half.

Federal Court of Justice sees errors in the OLG ruling on rent cuts

It saw a disruption of the business foundation that neither tenants nor landlords could have foreseen. The OLG found that the consequences could not be expected of one party alone. Both Kik and the property management appealed against this judgment to the BGH. He basically agreed with the OLG assessment that a rent adjustment would be considered. However, it saw legal errors in the judgment: the court could not simply set half the rent.

Instead, the specific economic effects of the closure of this branch would have to be considered, said the presiding judge Hans-Joachim Dose in Karlsruhe. For example, how big the decline in sales was, what measures the retailer could take to counter it, and whether he was getting government support or money from a company insurance policy. The landlord’s interests also have to be taken into account, said Dose.

Lots of legal disputes over the corona lockdowns

The OLG Dresden now has to negotiate the case again. Numerous similar cases are pending before German courts. It was not until the turn of the year 2020/21 that the legislature had regulated that a lockdown could lead to a disruption of the business base and thus also be a reason for a rent reduction. The BGH now made it clear that there is no all-inclusive formula for this.

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