GERMANY Law and Practice Contributed by: Wolfram H. Krüger, Barbara Rybka, Markus Wollenhaupt and Alexander Zitzl, Linklaters
6.20 Registration Requirements There are no registration requirements for leases and a lease cannot be recorded in the land register. How - ever, form requirements apply. Leases of a fixed term of more than one year need to be in writing, signed by each party, and contain all terms and conditions. If a lease contains a pre-emption right or is part of a sale- and-leaseback transaction, it needs to be notarised. Tenant easements ( Mieterdienstbarkeiten ) preventing an early termination in case of the landlord’s insol - vency or a forced auction over the premises, and per - manent right of use ( Dauernutzungsrechte ), to which statutory lease law only applies if expressly agreed, must be registered in the land register. For such registration, an approval certified by a notary is required. Statutory registration fees are applicable. The parties can freely agree who bears these fees and the costs are usually seen in the context of the entire commercial agreement. No matter what the parties decide, vis-à-vis the land registry, the party that files the registration application will be liable for the fees. 6.21 Forced Eviction A tenant can be forced to leave after a lease agree - ment is effectively terminated or has expired. If the tenant will not leave voluntarily, the landlord can file for an action for eviction ( Räumungsklage ). If the ten - ant does not follow the court’s order, the landlord can file for a forced eviction ( Zwangsräumung ) with the local authorities. However, due to various regulations protecting the tenant and the inevitable court pro - ceedings, this can be a long process and an average If the leased premises are sold due to the landlord’s insolvency or due to foreclosure, the buyer of the leased premises has a statutory extraordinary termi - nation right regarding existing leases. In such instanc - es, the tenant generally cannot claim compensation for lost expenditure but may be able to claim against the buyer for unjustified enrichment if the buyer is able to lease the premises to a third party for a higher rent than the rent agreed with the tenant. timeframe cannot, therefore, be given. 6.22 Termination by a Third Party
to be paid out to the landlord. If VAT is payable in addition to rent, subletting is often permitted only to parties which must pay VAT as well Non-authorised subletting constitutes a serious offence and justifies extraordinary termination of the lease agreement with - out notice. For transfer of the entire lease agreement to a third party, an agreement involving the landlord, the existing tenant and the new tenant is necessary. In commercial leases, a transfer without the landlord’s involvement is sometimes permitted for affiliated companies. 6.19 Right to Terminate a Lease Commercial leases are usually agreed for a fixed term and ordinary termination rights are excluded. Some - times break options towards a predetermined date are granted to the tenant. The Civil Code grants both landlord and tenant extraordinary termination rights if the other party cannot reasonably be expected to continue the lease, considering all circumstances of the individual case. The tenant may terminate if: • the property is not handed over on time; • the tenant is deprived of its use; or • the landlord has increased the rent. The landlord may terminate if: • the tenant violates the rights of the landlord by substantially endangering the property; or • if the tenant is in significant rent arrears (for two successive due dates or for payments amounting to at least two months’ rent). The Civil Code also grants both parties the right to terminate the agreement 30 years after the start of the lease, with a statutory notice period of six to nine months. In addition to this, in commercial leases, parties typi - cally agree on further extraordinary termination rights in favour of the landlord, such as unauthorised sub - letting. If the property is sold due to foreclosure or the insolvency of the owner, the new owner has an extraordinary termination right.
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