Federal Court of Justice, 17.12.2014, Ref.: XII ZR 170/13
The general economic efficiency requirement protects the tenant both in residential tenancy law (Section 556 (3) BGB) and in commercial tenancy law against the allocation of excessive or unnecessary costs by the landlord.
The general economic efficiency requirement represents the landlord's contractual secondary obligation based on good faith to only charge the tenant with ancillary costs that are necessary and reasonable.
The problem here, both before the court and in court, is determining whether the allocated costs actually violate the general principle of economic efficiency. If the tenants consider the costs charged by the landlord to be excessive, they must prove this themselves. Otherwise, they must pay the agreed apportionment.
In the above-mentioned judgement of the Federal Court of Justice, it had to deal with the question of the burden of presentation and proof with regard to the economic efficiency of allocated administrative costs in a commercial tenancy.
Facts of the Case:
The parties to this legal dispute were parties to a commercial tenancy agreement
The parties to this dispute were parties to a commercial tenancy agreement and were in dispute over the reimbursement of administrative costs.
The plaintiff was the landlord of commercial space in a self-service department stores'. The defendant had rented space from the plaintiff's legal predecessor in 1997 to operate a drinks shop.
In the lawsuit, the plaintiff demanded additional payments for ancillary costs
In the lawsuit, the plaintiff demanded additional payments for ancillary costs on the basis of statements for the years 2002 to 2004, of which the administrative costs of € 1,299.54 per year (gross) were still in dispute in the appeal before the Federal Court of Justice.
In this respect, the tenancy agreement contained the formally agreed obligation of the tenant to pay ancillary costs, in which "administration costs" were listed among the "operating costs".
The regional court initially appealed to had dismissed the action with regard to the administrative costs totalling € 3,898.62.
The first appeal by the plaintiff ended with the Higher Regional Court dismissing the action with regard to the administrative costs. This judgement was overturned by the Federal Court of Justice and the legal dispute was referred back to the Higher Regional Court, which then ordered the defendant to pay the administrative costs in full.
The defendant has now appealed against this judgement of the Higher Regional Court to the Federal Court of Justice.
Appeal judgement of the Federal Court of Justice
The Federal Court of Justice has now ruled that the judgement of the Higher Regional Court was ultimately lawful
The Federal Court of Justice has now ruled that the judgement of the Higher Regional Court was ultimately lawful and that the defendant's appeal was unsuccessful. The BGH stated:
In its decision, the Court of Appeal had assumed in accordance with the first judgement of the BGH of 24 February 2010 (XII ZR 69/08 - NZM 2010, 279) that the administrative costs could be apportioned in principle.
There was no dispute between the parties that the invoiced costs fell under the contractual concept of administrative costs. Accordingly, the defendant as tenant was in principle obliged to bear the costs in the amount incurred
The tenant is protected against the allocation of excessive or unnecessary costs by the general principle of economic efficiency
The tenant is protected against the allocation of excessive or unnecessary costs by the general principle of economic efficiency. This refers to the landlord's secondary contractual obligation based on good faith to only charge the tenant ancillary costs that are necessary and reasonable.
The landlord may only charge such costs. For residential leases, this obligation is set out in Section 556 (3) sentence 1 half-sentence 2 BGB. According to Section 242 BGB, it also applies to commercial leases. The landlord of commercial premises may also, in good faith, only pass on costs to the tenant that fulfil the principle of economic efficiency.
If the landlord causes excessive costs to be incurred, he is in breach of the principle of economic efficiency
If the landlord causes excessive costs to be incurred, he is in breach of the contractual secondary obligation arising from the economic efficiency requirement and is obliged to indemnify the tenant in this respect.
Accordingly, the landlord only has the burden of presentation and proof that the allocated costs were incurred and covered by the contractual agreement.
On the other hand, the categorisation of the economic efficiency requirement as a contractual secondary obligation, the breach of which would trigger a claim for damages pursuant to Section 280 (1) in conjunction with Section 241 (2) BGB, would mean that the burden of proof would lie with the tenant. In conjunction with Section 241 (2) BGB, it follows that the burden of presentation and proof in this respect would lie with the tenant.
In principle, the landlord would also not bear a secondary burden of proof in this respect, which would oblige him to provide more detailed information on the facts relevant to economic efficiency, such as a price comparison
The assessment of the appropriateness of administrative costs, of which the tenant can gain knowledge by inspecting the accounting documents, is just as possible for the tenant as it is for the landlord. There was therefore no justification for a secondary burden of proof on the part of the landlord.
The judge of fact is primarily responsible for assessing the arguments regarding the lack of reasonableness or necessity of the invoiced costs. On the one hand, the requirements for the tenant's presentation of the circumstances that speak in favour of a violation of the economic efficiency requirement should not be overstretched.
In particular, the requirements for the presentation should not go so far as to convince the court of the accuracy of the alleged fact. On the other hand, it is not sufficient to demonstrate a breach of secondary obligations by the landlord if the tenant merely disputes the reasonableness and customary nature of the costs or merely asserts in general terms that the services in question were procured at excessive prices. Rather, the tenant should be expected to demonstrate that equivalent services could have been procured at a significantly lower price according to local conditions.
Only then could the landlord, who was to be granted a margin of discretion in the selection of his contractual partners, be accused of a breach of duty. As a result, the contested decision fulfils these standards and would therefore withstand the attacks of the appeal.
The appeal would be right to criticise the requirement set by the Court of Appeal that the tenant's submission must show that he has come to the conclusion that the landlord has paid an excessive price for the underlying service.
According to the above principles, it cannot be demanded that the tenant convinces the court of the landlord's violation of the economic efficiency requirement through his factual submission alone, which the wording chosen by the court of appeal could indicate.
However, the contested decision was not based on such an understanding. Rather, the Court of Appeal had failed to state that the fee paid by the plaintiff would exceed the customary and reasonable prices for the management of the rental property in such a way that the plaintiff would have violated its secondary obligation to avoid unnecessary costs, even taking into account the discretionary leeway to which it was entitled.
Contrary to the opinion of the appeal, the plaintiff did not have to present how the management fee - agreed as a lump sum - would be broken down into the individual management activities. As stated, the plaintiff as landlord would lack a secondary burden of proof in this respect.
Furthermore, the defendant was not prevented from making a reliable price comparison, especially since even the individual management activities covered by the lump sum had been presented by the plaintiff.
If the Court of Appeal did not consider the comparative properties named by the defendant - which it rented in other locations - to be sufficient evidence because they were not readily comparable in terms of the content of the contract, size and regional reference, this was still within the framework of the aforementioned principles. The Court of Appeal had therefore not overstretched the requirements for the presentation of a breach of secondary obligations by uneconomically awarding the management of the rental property.
Source: Federal Court of Justice
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