Cologne Regional Court, 16 April 2024, Ref.: 14 O 89/23
The Cologne Regional Court ruled on 16 April 2024 (case no. 14 O 89/23) that the economic consequences of the war in Ukraine do not justify a claim for adjustment of a commercial tenancy agreement in accordance with the principles of frustration of contract (Section 313 BGB). In the specific case, the court rejected the claim for a rent reduction and ordered the defendant to pay rent arrears in the amount of 144,767.32 euros.
Background of the Case
The parties had a rental agreement for commercial space in North Rhine-Westphalia. The tenant had arbitrarily reduced the rent by % 50 due to a significant drop in turnover, which it attributed to rising raw material prices and energy costs as a result of the war in Ukraine. The plaintiff, as landlord, then demanded full payment of the agreed rent and sued for back payment of the outstanding amounts.
Court Decision
The court clarified that the economic effects of the war in Ukraine do not lead to an adjustment of the lease. § 313 BGB only applies if there is a serious change in the contractual basis that makes it unreasonable for the parties to adhere to the original contract. The court argued as follows:
- Utilisation risk lies with the tenant
In the case of commercial rental agreements, the tenant generally bears the risk of making a profit from the rented space. The landlord is therefore not responsible for economic failure or a decline in sales. - Immediate utilisation of the rental space guaranteed
In contrast to closures due to the pandemic, where it was temporarily impossible to use the rented premises, the commercial space here remained fully usable. Only the defendant's sales figures developed worse than expected due to external factors. - No unbearable burden for the defendant
The court found that the defendant continued to generate substantial sales and that there was no existential emergency. Commercial success was not guaranteed and represented a typical business risk.
Effects on commercial leases
The judgement makes it clear that case law is strict when it comes to adjustment claims in the context of the war in Ukraine. While pandemic-related closures have led to rent reductions in individual cases, a general deterioration in economic conditions is not sufficient to enforce an adjustment to a commercial lease.
Relevance for landlords and tenants
For landlords, the judgement strengthens the security of contractual agreements. For tenants, on the other hand, the ruling shows that economic uncertainties in business operations must be carefully factored in. A contract adjustment is only possible in exceptional cases and requires proof of existential unreasonableness.
This landmark judgement provides guidance for similar disputes and strengthens legal certainty in commercial tenancies.
Source: Cologne Regional Court
Important Note: The content of this article has been prepared to the best of our knowledge and belief. However, due to the complexity and constant changes in the subject matter, liability and guarantees are excluded.Important Note: The content of this article has been prepared to the best of our knowledge. However, due to the complexity and constant changes in the legal field, we exclude liability and warranties.
If you need legal advice, please feel free to call us at 0221- 80187670 or email us at info@mth-partner.de
Lawyers in Cologne provide advice and representation in tenancy law.