GERMANY Law and Practice Contributed by: Wolfram H. Krüger, Barbara Rybka, Markus Wollenhaupt and Alexander Zitzl, Linklaters
ordnung ) which determines that ongoing public charges, in particular, property tax, are part of the operating costs of a property. 6.12 Insurance Issues It is standard market practice for the landlord to procure an all-risk insurance policy for the build - ing, usually covering the risks of fire, storm, hail, water damage and other natural disasters. The incidental insurance premiums are allocated to the tenant as part of the operating costs. The landlord’s insurance policies, however, do not cover any personal property of the tenant; there - fore the tenant should cover possible damages with liability insurance. Landlords also often take out loss-of-rent insurance and, depending on the location of the property, terror insurance at their own cost. Tenants are often obliged to conclude a busi - ness interruption insurance. However, accord - ing to a decision by the Federal Court of Justice ( Bundesgerichtshof ), such insurance does not cover closures of businesses on the basis of the Infection Protection Act ( Infektionsschutzgesetz ) due to COVID-19 as long as COVID-19 is not explicitly mentioned in the insurance policy as a relevant illness. 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 agree - ment. Any change of use is usually subject to 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. 6.14 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 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. 6.15 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
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