Legislative Debate on Corona-Related Restrictions and Closures

Federal Minister of Justice Christine Lambrecht (SPD) wants to change German legislation on rental law and strengthen the position of commercial tenants

The Federal Ministry of Justice is currently dealing with the issue of whether state-imposed restrictions and corona-related closures constitute a rental defect. So far, only regional courts have dealt with this question. The Regional Court of Frankfurt (judgement of 5 October 2020, file no. 2-15 O 23/20) and the Regional Court of Heidelberg (judgement of 30 July 2020, file no. 5 O 66/20) have spoken out against this, the Regional Court of Munich (Regional Court of Munich I, judgement of 22 September 2020, file no. 3 O 4495/20) has surprisingly come out in favour. We have presented the decisions in our contributions of 21 October 2020 and 13 November 2020.

Now Federal Minister of Justice Christine Lambrecht announced that she intends to intervene specifically in German rental law by amending section 313 of the German Civil Code (BGB): "I would like to make it clear by law that this regularly means interference with the business basis for a rental relationship." State-imposed closure orders and restrictions are now to be understood as interference with the basis of the transaction. In concrete terms, this means that the lessee has a legal right to adjust the agreement or to withdraw from the contractual relationship. However, this would not automatically imply an entitlement to a rent reduction. "Of course, the individual case and the actual contractual agreements must always be examined," Lambrecht clarified. "If necessary, it must be determined by the courts whether an adjustment of the agreement can be demanded".

On the one hand, it seems surprising that the Federal Ministry of Justice, among other things, as the executive power, wishes to take on the task of determining legal terms or adapting the law. The Federal Ministry of Justice and Consumer Protection (BMJV) is in fact primarily a legislative ministry and it advises the other federal ministries in the preparation of their legislative projects. However, definitions of terms and judicial decisions are issued by the judicial power of the state. The judicial power has defined the concept of the basis of the transaction and the interference with the basis of the transaction as prerequisites of section 313 BGB over many years. Accordingly, the lessee has had to bear the risk of use. External influences on the lease were previously not a reason for a reduction in rent and did not constitute any interference with the business basis.

On the other hand, there are already several court decisions which - following the case law of the Federal Court of Justice - show that corona-based closures do not constitute a defect and therefore do not justify a right to a rent reduction and do not constitute an interference with the basis of the transaction. The decision of the Regional Court Munich I seems to be an anomaly in comparison to the current case law. In its decision, the court refers to outdated case law and clearly disregards the current case law of the Federal Court of Justice.

It remains to be seen how the case law develops and which legislative initiatives will be launched.

We will continue to report!

Klaus Beine

Dr Angela Kogan