The index clause, also known as a sliding clause, price clause, or value guarantee clause, serves to regulate the rental price of a commercial property. It is intended to adjust the rental price in line with the inflation or deflation rate and is found in most commercial leases.
The price index of a statistical office must be used as a reference value, e.g., the consumer price index. However, it is important to note that not all forms and variants of index clauses are permissible.
A fundamental distinction must be made between genuine and non-genuine index clauses.
In the former case, a change in the price index used for comparison has a direct effect on the rent to be paid. It is also generally inadmissible unless the landlord waives their ordinary right of termination for at least ten years or the tenant has the right to extend the term of the contract for the same period.
In the case of a non-genuine index clause, however, the rent is not automatically adjusted, but can only be changed through prior contract negotiations. It is always effective and legally valid. The only exception to this are so-called "upwards-only clauses," in which the rent can only be adjusted upwards but remains the same in the event of deflation. These clauses must not disadvantage either party to the contract. This also includes disproportionate changes to the rent in relation to the reference value – disproportionate downward changes, on the other hand, are permissible.
If an agreed index clause violates these requirements, it is inadmissible but not necessarily invalid. To be invalid, it must first be officially declared as such by a court. It should be noted that in such cases, the rent cannot be reclaimed by the tenant. From the landlord's point of view, however, it is certainly possible to claim the difference in rent for the last three years.
Finally, here is a useful tip for real-life situations: it is always advantageous for the tenant to include a clause in the rental agreement that obliges the landlord to notify the tenant of any rent increases. This can prevent unexpected cost increases and, if necessary, create room for negotiation.
