GERMANY LAW AND PRACTICE Contributed by: Wolfram H Krüger, Barbara Rybka, Markus Wollenhaupt and Alexander Zitzl, Linklaters
approval by the landlord. Public building law and the respective zoning 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 addi - tional building requirements to be adhered to. The agreement 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 landlord’s consent. Furthermore, the land - lord generally lays down house rules – ie, general conditions for the use of the property – to avoid conflict between and with the tenants. 6.13 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 land - lord’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 any - thing substantially and irreversibly. Any altera - tions by the tenant are generally subject to the landlord’s prior consent. 6.14 Specific Regulations Besides the Civil Code, there is no special reg - ulation or law regarding the lease itself. How - ever, operation of the tenant’s business on the premises may be subject to particular laws and regulations, which might have an impact on spe - cific provisions in the lease. Furthermore, spe - cific laws and regulations can apply to the rent payable by residential tenants and its increase.
Regarding commercial tenants, the Federal Court of Justice ( Bundesgerichtshof ) clarified that a COVID-19 pandemic-induced closure of a retail shop does not constitute a defect in the rental object as such. Rather commercial tenants who are directly affected by the government’s protective measures to contain the pandemic may, depending on the individual case, claim a disturbance of the contractual basis ( Wegfall der Geschäftsgrundlage ) allowing for adapta - tion of the lease agreement to the specific new circumstances. This can lead to a reduced rent being payable for the relevant period; however, aspects of the individual case such as actual economic effects of the closure as well as pos - sible state aid must always be taken into con - sideration so that there can be no generalised approach. 6.15 Effect of the Tenant’s Insolvency A landlord does not have the right to terminate a lease due to a tenant’s insolvency. A termina - tion due to rent arrears is only possible before the opening of insolvency 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 insolven - cy proceedings, any claims the landlord might make against the tenant must be formally filed with the insolvency administrator. 6.16 Forms of Security to Protect Against a Failure of the Tenant to Meet Its Obligations A rent security is usually agreed between the parties. For residential leases, a cash deposit or pledged account is typical, while various oth - er rent securities can be found in commercial leases, particularly bank guarantees or letters
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