Corona-related closure: No rent reduction for traders during lockdown

During the lockdown in spring, all kinds of retail stores also had to close. Due to the loss of sales during the lockdown, a clothing chain did not want to pay the full rent, which ultimately ended up in court. However, the Regional Court of Frankfurt am Main did not consider this to be justified (judgment of 5.10.2020, ref. 2.-15 O 23/20).

Even at the beginning of the coronavirus measures, there was a debate across Germany as to whether store operators affected by the shutdown would still have to pay rent. The first ruling on this question has now been handed down by Frankfurt am Main Regional Court. But briefly on the topic.

Rent payment refused due to lockdown

A branch of a Germany-wide clothing chain in Frankfurt am Main had to close from March 18 to April 20, 2020 due to the coronavirus measures. Naturally, sales were lost during this period, in this example by 54% compared to the previous year. For this reason, a financial bottleneck had arisen so that the rent for the business premises in Frankfurt could not be paid for April. The landlord refused to accept this and sued for payment of the rent in the amount of 6,000 euros.

The clothing chain argued that the rent was not payable in full due to a defect. This deficiency exists in the event of a government-ordered closure and the associated disruption to the basis of the business.

Decision and reasoning of the regional court

The regional court ruled that there was no rental defect and no disruption to the basis of the transaction. The clothing chain must therefore pay the rent demanded.

Public law restrictions or prohibitions can certainly lead to a rental defect, especially when renting out commercial premises, but the causes must lie in the rental property itself. The regional court came to the conclusion that the circumstance was due to the favoring of infections and had nothing to do with the rental property itself.

In this case, it cannot be assumed that the basis of the transaction has been disturbed. In the event of unforeseeable events "to avoid an unacceptable result that is incompatible with law and justice", a change to the agreed rent payment can be demanded. However, this extreme case of a threat to the existence of the clothing chain does not exist.

The judgment is not yet final.

Conclusion

Through measures such as short-time work or short-term changes to the law, such as protection against termination of commercial premises in the event of coronavirus-related payment difficulties, the federal government also helped retailers during the first lockdown. However, this does not include a refusal to pay rent or a rent reduction for this period.