GERMANY Law and Practice Contributed by: Wolfram H. Krüger, Barbara Rybka, Markus Wollenhaupt and Alexander Zitzl, Linklaters
location of the property, terror insurance at their own cost. Tenants are often obliged to conclude a business interruption insurance. 6.13 Restrictions on the Use of Real Estate The specific use of the real estate is generally agreed between the parties in the lease agreement. Any change of use is usually subject to approval by the landlord. Public building law and the respective zon - ing plan also impose what uses are possible, and the building permit for the property is issued for a specific use based on this. If the tenant intends to deviate from the use granted in the building permit, a change- of-use permit must be obtained from the responsible building authority. Such permit might list additional building requirements to be adhered to. The agree - ment between the parties who bear the related costs and carry out the necessary measures very much depends on the market situation. Regarding subletting, the landlord may restrict the use to the extent that it is only permitted with the land - lord’s consent. Furthermore, the landlord generally lays down house rules – ie, general conditions for the use of the property – to avoid conflict between and with the tenants. 6.14 Tenant’s Ability to Alter and Improve Real Estate The tenant may not cause any damage to the real estate, which might also – from the landlord’s point of view – include any alterations or improvement. It is important for the tenant to clear the conditions the landlord has set in the lease agreement before starting to change anything substantially and irreversibly. Any alterations by the tenant are generally subject to the landlord’s prior consent. 6.15 Specific Regulations Besides the Civil Code, there is no special regulation or law regarding the lease itself. However, operation of the tenant’s business on the premises may be subject to particular laws and regulations, which might have an impact on specific provisions in the lease. Further - more, specific laws and regulations can apply to the rent payable by residential tenants and its increase.
The Federal Court of Justice ( Bundesgerichtshof ) has held that pandemic-related closures do not consti - tute a rental defect but may, depending on the indi - vidual circumstances, justify rent adjustments under the doctrine of frustration of contract ( Wegfall der Geschäftsgrundlage ). 6.16 Effect of the Tenant’s Insolvency A landlord does not have the right to terminate a lease due to a tenant’s insolvency. A termination due to rent arrears is only possible before the opening of insol - vency procedures over the tenant’s assets. If an insolvency administrator is appointed for the tenant under insolvency legislation, the administrator has an extraordinary termination right regarding the lease. During the insolvency proceedings, any claims the landlord might make against the tenant must be formally filed with the insolvency administrator. 6.17 Right to Occupy After Termination or Expiry of a Lease The Civil Code gives the tenant the right to occupy the premises even if the contractually agreed fixed term has ended, if the landlord does not object within two weeks after the official termination date. In this case, the lease will continue, and statutory ordinary termi - nation rights (usually between six and nine months) will apply. Parties regularly exclude this provision in lease agreements. Leases do not typically contain any further stipulations to ensure that the tenant leaves on the termination date, as the tenant is obliged to vacate the premises after the lease has ended under statutory law. Therefore, the landlord cannot arrange for timely eviction by the tenant in advance but can claim for damages if the tenant does not vacate the property on time. 6.18 Right to Assign a Leasehold Interest The right to sublet to third parties is commonly accept - ed, and in the case of residential leases, it cannot be excluded. Subletting is usually subject to the land - lord’s prior written consent which can only be withheld for good cause. The main tenant remains fully liable for rent payment and compliance with other obliga - tions under the lease agreement vis-à-vis the landlord. It is sometimes agreed that the surplus rent generated in the sublease, or a certain percentage thereof, has
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