Will construction continue in Germany? Can tenants sublet their commercial space at short notice? Can a commercial property be converted? Can a commercial property be terminated early? Or can commercial tenants invoke the loss of their business basis?
Can tenants sublet their commercial space at short notice?
As a rule, it is permitted to sublet part of the rented space – however, you should always check the rental agreement to see whether this is expressly prohibited. Of course, you should always involve the landlord in this. The sublease agreement should be agreed upon with the main lease agreement, which means that the rules apply not only to the main tenant but also to the subtenant. The term and rent can be determined individually. The obligations of the main tenant remain in full force.
Can a commercial property be converted?
Unless otherwise specified in the commercial use agreement, the tenant may carry out any legal business. The intended use is not often clearly defined. You should be aware that excessive repurposing can lead to major legal problems. For example, it would cause major problems if you were to operate a restaurant in a warehouse (hygiene standards would not be met).
Can a commercial property be terminated early?
You are not entitled to extraordinary termination due to coronavirus. The lease agreement and the terms of termination generally remain unchanged
Can commercial tenants invoke the discontinuation of the basis of the business relationship?
Section 313 of the German Civil Code (BGB) specifies the rules that apply in the event of a disruption to the basis of the business relationship. You should agree in the lease agreement which options you can invoke if the basis of the business relationship ceases to exist. For example, if a general practitioner moves out of the building where you run a pharmacy, this could be an important reason for termination without notice. The basis for a contract should stipulate that sufficient customers will come to generate profits. The risk is borne by the tenant if they are unable to generate customers. Economic and social disasters are not considered a disruption of the basis of the business.
Even if the basis of the business relationship is disrupted, there is no direct possibility of termination, but the contract can be adjusted between the tenant and the landlord. One option for adjusting the contract would be to defer the rent or pay only part of the rent. Many businesses in shopping centers, for example, are affected, while others are not. The operator of the shopping center must ensure that businesses such as pharmacies can still open and that businesses that do not sell everyday necessities must close. Tenants can claim a rent reduction if the operator closes the shopping center completely.
Will construction continue in Germany?
Construction is continuing in Germany. Safety measures are very strict in order to reduce the risk of infection. If a confirmed case of infection occurs on a construction site, the entire construction crew would have to be temporarily quarantined. However, the border closures are causing concern with regard to the workforce, as many workers often come from Eastern Europe (e.g., Poland).
If there is a delay, it is not clear who would be liable. It is possible that the coronavirus crisis could be invoked as force majeure. The federal government is planning to issue a decree for federal construction sites.
