Invalid commercial tenancy clause dealing with cosmetic repairs

News  >  Invalid commercial tenancy clause dealing with cosmetic repairs

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Arbeitsrecht-Anwalt-Rechtsanwalt-Kanzlei-MTR Legal Rechtsanwälte

The use of the German word “Ausführungsart” in cosmetic repairs clauses – where the term seemingly refers to the method or approach to carrying out the repairs – renders the entire clause unlawful because it is too vague. A recent ruling by Brandenburg’s higher regional court – the Oberlandesgericht (OLG) Brandenburg – saw the court apply this principle to commercial leases as well.

Cosmetic repairs are a common source of trouble in connection with commercial premises. It is not just a matter of who has to carry out the repairs, but also how they ought to be carried out. If a lease agreement contains a clause stipulating that the landlord’s approval is required in order to deviate from the “Ausführungsart” for cosmetic repairs that has been followed to date, the term “Ausführungsart” is too vague and its use here renders the whole clause invalid. This is true not only for private spaces but also for business premises, notes MTR Legal Rechtsanwälte, a commercial law firm that advises both domestic and international clients on, among other things, real estate law.

The commercial lease agreement in the case heard by the OLG Brandenburg included a clause stating that the tenant was only allowed to deviate from the previous “Ausführungsart” for carrying out cosmetic repairs if this had been approved by the landlord.

This was successfully challenged by the tenant. Despite the fact that Germany’s highest civil court – the Bundesgerichtshof (BGH) – has so far only commented on this kind of contractual clause in the context of residential tenancies, it was noted that the BGH had declared that clauses of this kind, according to which the tenant is only permitted to deviate from the previous “Ausführungsart” if the landlord’s approval has been obtained, fall foul of the requirement for clarity set out in Section 305(c)(2) of the German Civil Code (BGB). This is because the term in question is not clearly defined, possibly referring to the basic setup, to specific details about the design, or to both of these things. This was also said to be true in cases where approval is only necessary for a significant divergence.

In its ruling from December 6, 2022, the OLG Brandenburg concluded that this case law of the BGH is equally applicable to commercial lease agreements (case ref.: 3 U 132/21). In fact, the OLG Brandenburg went so far as to state that commercial tenants are even more reliant than private renters on being able to arrange and decorate according to their needs. The Court also noted that the design of commercial premises is often part of the business concept. Ultimately, the OLG Brandenburg declared the relevant clause unlawful here.

Any questions pertaining to commercial leases can be addressed to the experts in real estate law over at MTR Legal.

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