Updated, taking the BEG IV into consideration (textual form instead of written form). As of: April 2026

Lawyer Helmer Tieben

Note: This article is for general information only and does not replace individual legal advice. Commercial lease agreements are complex; every contractual situation is different. Please have your specific contract reviewed by a specialist lawyer before signing.

240,000 euros. That's how much money is at stake if you sign a ten-year commercial lease with a monthly rent of 2,000 euros. At a rent of 3,000 euros, it is 360,000 euros. This is not an abstract scenario: it is the everyday life of restaurateurs, retailers, doctors, agencies and craft businesses in Germany.

Nevertheless, many entrepreneurs sign the lease agreement presented to them by the landlord without having it checked. Or they just skim over it. This is understandable: the premises fit, time is pressing, the landlord has other interested parties. But it is a mistake that is difficult to rectify later.

Because in commercial tenancy law, there prevails Freedom of contract. That sounds neutral. In practice, this means that the statutory tenant protection, which you may know from residential tenancy law, does not apply to commercial premises. No rent cap. No social Protection against dismissal. No legal deadline for the utility cost statement. What's in the contract counts. What's missing, you will have to bear the cost of.

This article will show you the ten most common mistakes in commercial lease agreements, the relevant legal bases, and the most important protective measures. It takes into account the regulations that have been in force since January 2025 Text form obligation (BEG IV), whose transitional period for old contracts expired on 1 January 2026.

Commercial rent is not residential rent

The key difference in one sentence: In residential tenancy law, the legislator protects the tenant. In commercial tenancy law, only the contract provides protection.

The legal basis is formed by §§ 535 et seq. of the German Civil Code (BGB) in conjunction with § 578 BGB. The protective provisions of §§ 549–577a BGB do not generally apply to commercial lease agreements. The following overview highlights the differences:

Subject	Residential rent	Commercial rent
Protection against dismissal	Comprehensive legal protection (§ 573 BGB)	None. Purely contractual arrangement.
Rental price	Rent cap, rent cap (§§ 556d ff. BGB)	No legal limit. Index rent, stepped rent, free agreement.
Operating costs	Catalogue of the BetrKV, billing period 12 months	Freely negotiable. Administrative and maintenance costs are also transferable.
Maintenance	Landlord obligation; only minor repairs transferable	Largely transferable to tenants (GTC: only with upper cost limit)
Form (from 2025)	Written form (§ 550, § 126 BGB)	Form (§ 578 para. 1 sentence 2, § 126b BGB)
Freedom of contract	Severely restricted by mandatory law	Virtually unlimited. What you do not negotiate is regulated by the landlord.

 

The draft contract almost always comes from the landlord. It is designed so that the economic risk is transferred to you as the tenant as far as possible. This is legal. And that is precisely why you need to know what to look out for.

The ten most common mistakes in commercial leases

Unclear operating costs regulation

In residential tenancy law, the Operating Costs Ordinance (BetrKV) provides an exhaustive catalogue of apportionable costs. This does not exist in commercial tenancy law. The landlord can contractually allocate almost any type of cost to the tenant as long as the agreement is transparent and specific.

Many draft contracts take advantage of this. Blanket formulations such as „operating costs in accordance with Section 2 BetrKV and other operating costs“ leave open what „other operating costs“ actually are. In practice, centre management costs, administration fees or maintenance levies for communal areas then appear that no one had anticipated.

The Berlin Court of Appeal (judgement of 8 October 2001, Ref. 8 U 6267) and the Rostock Higher Regional Court (judgement of 10 April 2008, Ref. 3 U 158/06) have declared clauses that merely list the term „administrative costs“ without a definition to be non-transparent and invalid.

Protection Insist on a final list of all reclaimable costs. Anything not explicitly stated in the contract cannot be billed to you.

2. Unlimited maintenance obligation

The Federal Court of Justice, in its ruling of 06.04.2005 (XII ZR 158/01), drew a clear line: A standard form transfer all The transfer of maintenance and repair costs to the tenant without limiting the amount is invalid. It violates § 307 BGB.

Nevertheless, such clauses are found in a variety of draft contracts. „The tenant assumes all maintenance and repair work on the rented property“: This or similar is the wording. It sounds clear. But in this form, it is regularly invalid.

The Higher Regional Court of Frankfurt (Judgment of 06.11.2020, File Ref. 2 U 47/20) has tightened this stance: without ensuring that the tenant is not also held liable for damages from the period before the lease began, the clause is void. The case concerned a claim for damages amounting to almost €250,000. The court dismissed it.

Effective maintenance clauses must fulfil three requirements: The obligation must be limited to damage that is attributable to the tenant's use of the property. There must be an upper cost limit per individual case and per year. And for communal areas, a cap of 8-10 % of the annual net cold rent is standard market practice.

3. Lack of protection against competition

Did you know that every commercial tenant has statutory protection against competition even without an express agreement? The landlord is not permitted to let premises to direct competitors on the same property or in the immediate vicinity (BGH, NJW 1979, 1404). This is called protection against competition inherent in the contract.

Many landlords contractually exclude this protection. This is generally permissible. However, in its landmark ruling of 26 February 2020 (XII ZR 51/19), the BGH set an important limit: If the protection against competition is excluded and at the same time there is an obligation to operate with a fixed product range, this combination is invalid as a general terms and conditions.

The reasoning makes sense: The tenant cannot defend itself against new competition, is not allowed to adapt its product range and still has to maintain the business. This is a triple trap.

What you should ask for: An express non-competition clause. If the landlord rejects this, the operational obligation must at least be waived, or you must be able to adjust your product range.

4. uncontrolled index-linked rent

3.000 Euro Kaltmiete, Indexklausel ohne Deckelung, 8 % Inflation. Ergebnis: 240 Euro Mieterhöhung pro Monat, 2.880 Euro pro Jahr. Diese Erhöhung bleibt dauerhaft bestehen und bildet die Basis für alle weiteren Anpassungen. Die Inflationsspitzen von 2022 und 2023 haben vielen Gewerbemietern gezeigt, wie schnell eine Indexklausel zur existenziellen Belastung wird.

An index-linked rent agreement ties the rent to the Consumer Price Index (CPI) published by the Federal Statistical Office. This is a fair instrument in normal times. Without a cap, it becomes a risk factor.

Negotiation options: A pro-rata adjustment (e.g. 70 %of the CPI increase) or an annual cap of 3–4 %. Both are common practice but are rarely offered by landlords. You need to ask for them.

5. Fixed runtime without exit

Five years, ten years, sometimes longer. Commercial rental agreements are concluded for the long term. This provides location security but also ties you down financially. A 10-year contract for €3,000 per month means: a total volume of €360,000 for which you are liable. Even if you have long since vacated the premises.

You can find detailed information on notice periods and cancellation options in our article on the Termination of commercial leases.

Three clauses can limit the risk: a break option (special right of termination) after 24 or 36 months. A contractually secured right to provide a subtenant under objective conditions. And a clear regulation on subletting.

6. Area deviation without tolerance limit

48,000 Euros. That's how much extra you'll pay over a 10-year term if your commercial space is 10 % smaller than stated in the contract and the monthly rent is 4,000 Euros. In commercial tenancy law, there is no statutory threshold like in residential tenancy law.

Some contracts even expressly exclude rent adjustments for area deviations of up to 10 %. That is simply too much.

Agree a maximum tolerance of 3 %. Have the area measured independently before the contract is concluded. Pay attention to which area measurement standard is used: DIN 277 or the MFG guideline from gif e.V. are the common standards.

7. The new text formatting trap

Since 1 January 2025, commercial tenancy agreements no longer have to be concluded in writing, but only in text form (Section 578 (1) sentence 2, Section 550, Section 126b BGB). A handwritten signature is no longer required. This is the biggest reform in commercial tenancy law for years.

For old contracts (concluded before 01.01.2025), a transitional period applied until 31.12.2025. This deadline has passed. From 01.01.2026, the text form will also apply to existing contracts. The previously common „written form termination“ as an exit strategy will therefore no longer work.

However, the simplified form has a downside: If an email or WhatsApp message can constitute the conclusion of a contract, the risk of unintended contract changes increases. A quick message to the landlord („We agree to the amended ancillary cost arrangement“) can already be binding. Read more about the details of written and text form for commercial lease agreements in our Contribution to written form in commercial lease law.

8. Decommissioning and Conversion Costs

A caterer is extending his rented premises for 80,000 euros: Kitchen, ventilation system, catering area. At the end of the contract, the landlord demands that the premises be restored to their original state. Costs: another 40,000 euros. Without a clear contractual provision, this is the legal starting position (Section 546 BGB).

Regulate before Start of tenancy: Which conversion work requires approval, who bears the approval risk? Is there an obligation to demolish, and if so, to what extent? Can the tenant take fixtures and fittings with them? Is there compensation for value-enhancing investments? An acceptance report at the start of the tenancy is essential.

9. Unilateral termination clauses

Under the statutory model (§ 543 para. 2 no. 3 BGB), termination without notice is generally only possible when arrears amount to two months' rent. However, commercial lease agreements often stipulate deviating, stricter termination provisions. These are generally permissible but are subject to the control of general terms and conditions and may be invalid in individual cases.

Conversely, the tenant also has termination rights that are often unknown. The BGH confirmed this in its judgement of 06.10.2021 (XII ZR 11/20): If the landlord deliberately prepares incorrect utility bills and sticks to them despite justified objections, the tenant can terminate the lease without notice.

Ensure that an immediate termination by the landlord is only permissible after a warning has been issued and has been unsuccessful. Check automatic renewal clauses and objection periods. You can find a detailed explanation in our article on Cancellation in commercial tenancy law.

10. Lack of Regulation on Subletting

Relocation, restructuring, merger: there are many reasons why a business owner might want to assign or sublet their lease. Without contractual provision, you need the landlord's consent. Clauses that permit or block an assignment „at their sole discretion“ leave you incapable of action in a difficult situation.

Agree objective approval criteria: Creditworthiness of the new tenant, industry compatibility, suitable utilisation concept. The landlord may then only refuse for objective reasons.

Already signed? What you can do now

Not everyone reads this article before signing. If you are already bound by a commercial lease agreement with unfavourable clauses, there are still options available:

• Identify ineffective clauses: Many of the clauses described above (unlimited maintenance, non-competition exclusion with operating obligation) are invalid as standard terms and conditions. They do not need to be complied with, even if they are included in the contract.
• Negotiate contract amendment An existing tenancy agreement can be amended by addendum. Landlords often have a vested interest in revising a contract, for example in cases of a change of ownership or refinancing.
• Check operating cost statements The three-year limitation period also applies to commercial tenancy law. Incorrect statements can be challenged retroactively.
• Check special termination rights: Defects in the form of the agreement, breach of non-compete clauses or significant defects in the rental property can be grounds for extraordinary termination or lead to ordinary termination rights. Have this reviewed by a legal professional.

Checklist: Before signing

Systematically check the following points:

• Operating costs Final list of all cost types? Cap for maintenance costs?
• Area Independent measurement? Tolerance limit maximum 3 %? Uniform standard (DIN 277 or MFG)?
• Rent adjustment Index-linked rent with a cap? Is the threshold fairly set?
• Runtime Is the running term appropriate? Is a break option available? Has the automatic extension been checked?
• Non-compete clause Agreed or excluded? If
• Purpose of use Is it flexible enough for future business adjustments? Who bears the risk of planning permission?
• Refurbishment and demolition Is the approval process regulated? Is the decommissioning obligation defined? Has a handover protocol been agreed?
• Termination Termination without notice only after a warning? Is the objection period for an extension realistic?
• Subletting Objective approval criteria agreed?
• Deposit Is the amount and type (security deposit, cash deposit) appropriate? Is the settlement period after the end of the tenancy regulated?
• Previous requirement: Textual form adhered to? All persons entitled to representation named? Old written form clauses adapted?
• Cosmetic repairs Scope defined? Condition documented on handover? Colour choice clauses effective?

Frequently asked questions about the commercial lease

Can I terminate my commercial lease agreement early?

Generally not for fixed-term contracts. Exceptions: A contractual break option, an extraordinary reason for termination in accordance with Section 543 BGB (e.g. significant defects) or a mutually agreed cancellation of the contract. Cancellation agreement. For a comprehensive overview, please see our article on Termination of commercial leases.

As a commercial tenant, do I have to bear maintenance costs?

Only if this is expressly agreed in the contract. Without any contractual provision, the landlord remains responsible (§ 535 (1) of the German Civil Code). However: Standard clauses that impose all maintenance costs on the tenant without an upper limit are invalid according to BGH case law (XII ZR 158/01).

What is the situation regarding the written form for commercial lease agreements from 2025 onwards?

From 01/01/2025, the text form (§ 126b BGB) is sufficient for new contracts. A handwritten signature is no longer required. For existing contracts, there was a transitional period until 31/12/2025; from 01/01/2026, the text form also applies to these contracts.

Do I have protection from competition as a commercial tenant?

Yes, even without an express agreement, there is protection against competition inherent in the contract. The landlord is not permitted to let premises to direct competitors in the immediate vicinity. This protection can be contractually excluded, but not in combination with an operating obligation and product range commitment (BGH, XII ZR 51/19).

Who bears the costs for cosmetic repairs?

In commercial tenancy law, cosmetic repairs can be contractually transferred to the tenant. However, rigid deadline schedules („paint every 3 years“) should also be viewed critically in this context. The condition at the time of handover should be documented, as premises handed over in an unrenovated state can limit the tenant's obligation.

What is the maximum security deposit for commercial premises?

Unlike residential tenancy law (a maximum of three months' rent), there is no legal upper limit for commercial properties. Six months' rent is common practice, sometimes more. The form (cash deposit, guarantee, combination) is freely negotiable. Ensure a clear settlement period after the end of the tenancy.

Contract review: What we do for you specifically

Depending on the scope of the contract, a contract review by a lawyer takes a few days and usually costs a fraction of the sums involved in a long-term commercial lease.

Specifically, you will receive from us: An analysis of the draft contract with all critical clauses. Concrete wording suggestions for renegotiations. And an assessment of which clauses are customary in the industry and where the draft deviates from market standards to your disadvantage.

If you would like to have a commercial tenancy agreement checked before signing or have questions about an ongoing tenancy: Give us a call or write to us.

This article has been compiled with the greatest possible care and makes no claim to completeness. It does not replace individual legal advice. The legal situation may change at any time due to changes in the law or new case law. Status: April 2026.