Cologne Higher Regional Court, 29.01.2019, Ref.: 22 U 30/17
In commercial tenancy law, in contrast to residential tenancy law, the law treats both parties to the tenancy agreement as equal opponents. According to Section 580a II BGB, the statutory ordinary notice period is therefore the same for landlords and tenants and is six months to the end of a calendar quarter.
In addition to the ordinary notice period, the respective parties may also have certain special termination rights, which may arise either from the law or from the tenancy agreement itself. In the case discussed here, the Cologne Higher Regional Court had to decide whether the tenancy had been properly terminated by the tenant on the basis of his notice of termination because at least 30% of the entire retail space had been vacant for a period of more than 6 months. Such a clause was contained in the parties' tenancy agreement.
Facts of the Case:
Operator of a shoe shop cancelled commercial lease due to vacancy
The plaintiff sought a declaration that the existing tenancy between it and the defendant for a shoe shop in a shopping centre was effectively terminated on 31 December 2015 by the termination notice issued by the plaintiff on 2 July 2015.
Rental agreement contained vacancy clause
The lease agreement included the following provision:
§ Section 21(4)(2): The tenant has the right to terminate the lease if at least 30% of the total retail space is vacant for a period of more than 6 months. The notice period is then 3 months to the end of the quarter."
The rental property was handed over on 2 September 2008. In a letter dated 2 July 2015, the plaintiff terminated the rental agreement with reference to Section 21 (4) of the rental agreement and, submitting the plans which it claimed had been provided to it by the estate agent in advance of the agreement and which were not to scale, claimed that more than 30% of the retail space had been vacant since December 2014 at the latest. On the basis of the areas and dimensions stated in the exposé, she had assumed a total retail area of around 20,000 square metres and marked the alleged vacant areas "red" in the plans and estimated the area concerned at around 6,600 square metres.
According to the tenant, the rental agreement was not limited in time
In addition, the plaintiff had argued that the termination was effective as an ordinary termination due to the lack of an effective time limit on the rental agreement. The written form requirement pursuant to Section 550 BGB had not been complied with. The original tenancy agreement was based on general terms and conditions. In the absence of specific information on the time of handover of the rental property, a contract concluded for an indefinite period was to be assumed, which could be cancelled within the statutory periods.
The Cologne Regional Court, which was initially seised, dismissed the action and ruled that neither an ordinary nor an extraordinary termination had ended the tenancy.
The plaintiff then lodged an appeal against this judgement in due time and form and also justified it in due time and form and then pursued the claim for declaratory judgement asserted at first instance.
Appeal judgement of the Cologne Higher Regional Court
The Higher Regional Court of Cologne, which heard the appeal, has now also ruled that the application for a declaratory judgement is unfounded and that the Regional Court was right to dismiss the claim. The existing tenancy between the parties had not been terminated on 31 December 2015 due to the plaintiff's termination on 2 July 2015.
The plaintiff could not successfully invoke a right of cancellation pursuant to Section 21 (4) (2) of the rental agreement due to the vacancy of retail space amounting to at least 30% over a period of 6 months.
Tenant did not prove in the legal dispute that there was actually a vacancy of over 30%
The plaintiff had not sufficiently explained and proven that at the time of the cancellation there was a vacancy of the retail space of at least 30%. Since the plaintiff would invoke a right of termination, it was obliged to demonstrate and prove that the requirements for the right of termination were met. Insofar as the defendant, as the landlord, had a secondary obligation to provide evidence at least with regard to the size of the entire retail space and the individual retail spaces rented to other parties, the plaintiff had not specifically countered the factual submission supplemented by the defendant in the appeal proceedings.
It is no longer in dispute between the parties that the "retail space" within the meaning of Section 21 (4) (2) of the lease only includes "retail space", not also catering space or other rented space such as offices, etc. Insofar as the parties were in dispute about the inclusion of the space of the fitness studio on the 2nd floor, the Senate had already stated in the hearing on 20 March 2018 that this space should not be considered as "vacant space". The parties were essentially in dispute as to the size of the total retail space and the size of the individual retail spaces affected by the vacancy. The lease agreement and its annexes do not contain any agreements or information regarding the size of the total retail space or the size of the retail spaces.
Insofar as the plaintiff initially stated at first instance - in the absence of dimensioned plans submitted by the defendant - that the total retail space on the ground, first and second floors was approx. 20,000 square metres, estimated the size of the individually marked vacant shops at approx. 6,600 square metres and put the vacancy rate at over 30% on the basis of the exposé handed over to it by the estate agent before the conclusion of the rental agreement, these size specifications were not decisive. The plaintiff had not sufficiently demonstrated that these plans were the subject matter or contractual basis of the rental agreement signed by the defendant in autumn 2005. The defendant had already argued at first instance with reference to the plans for the basement, the ground floor, the first floor and the second floor and the list HK 7 that there had been changes to the plans - with the consent of the tenants - and that when the rental property was handed over and the shopping centre opened in autumn 2008, there was actually only a total retail space of approx. 17,893.19 sqm. Taking into account the area sizes of the vacant shops contained in the plans submitted by the tenant, the vacancy rate was only less than 18%.
Expert opinion was rejected due to lack of sufficient presentation
After hearing the witnesses K. and V., who confirmed the accuracy of the list and plans submitted by the defendant, the Regional Court was unable to establish that the plaintiff's assertion regarding the vacant areas was correct. It rejected the request by the plaintiff to obtain an expert opinion due to the lack of a concrete explanation of the area sizes by the plaintiff. Taking into account the alleged procedural errors criticised by the plaintiff and the objections raised against the statements of the Regional Court on the scope of the burden of proof and against the assessment of evidence by the Regional Court, the Senate saw no reason to repeat or to take additional evidence. At the request of the Senate, the defendant had submitted the dimensioned plans requested by the plaintiff for inspection during the appeal proceedings. The plaintiff was therefore now able to make a concrete submission on the size of the total retail space and the size of the vacant space. However, it had not made any further submissions in this regard. Insofar as it had requested the submission of dimensioned plans relating to the year 2003, it had not been sufficiently demonstrated that these plans had been the subject or basis of the contract when the rental agreement was signed in June 2005. Moreover, the building had not yet been constructed at that time. Furthermore, reference is made to the statements of the Senate in the decision of 2 July 2018, according to which the condition at the opening of the shopping centre in 2008 is decisive. In particular, the tenants - including the plaintiff - had not objected to the actual condition and any rescheduling carried out at the time of handover as being contrary to the contract.
Accordingly, the plaintiff had not provided concrete and comprehensible evidence that - contrary to the statements of the witnesses heard at first instance - at least 30% of the retail space had actually been vacant for more than 6 months from December 2014.
Tenancy agreement had not been terminated by the ordinary termination
The tenancy agreement was also not terminated on 31 December 2015 on the basis of an ordinary termination in accordance with Section 580 a (2) BGB contained in the declaration of 2 July 2015.
The parties had agreed a contract term of 10 years from the handover of the rental space, which undisputedly took place on 2 September 2008, in Section 3 (1) of the written rental agreement dated 21 October 2003/3 June 2005 signed by the contracting parties. According to the contract, this therefore ended on 1 September 2018 at the earliest. The plaintiff was therefore not entitled to early ordinary termination with effect from 31 December 2015 at the time of the notice of termination. A fixed term of the tenancy agreement generally excludes the possibility of ordinary termination during the term of the agreement (Section 542 (2) no. 1 BGB).
Contrary to the plaintiff's submission, the written form of the tenancy agreement required pursuant to Section 550 sentence 1 BGB was also complied with in the present case; there is no open-ended tenancy.
The fact that the rental agreement had already been signed by the plaintiff in October 2003, but by the defendant only in June 2005, was harmless. Since the acceptance of the offer submitted by the plaintiff was not made within a reasonable period of time, this may have led to the cancellation of the application pursuant to §§ 146, 147 para. 2 BGB; however, the defendant's late acceptance could be regarded as the submission of a new offer pursuant to § 150 para. 1 BGB, which was subsequently accepted by the plaintiff, whereby this agreement also required the written form. If a rental agreement in due form was not initially concluded due to a lack of timely acceptance, a rental agreement with overall formal validity is concluded in any case by means of a supplementary agreement in due form that refers to the original document (BGH NJW 2009, 2195).
As a result, the tenancy had not been terminated either by the special right of termination contained in the tenancy agreement or by ordinary termination of the tenancy agreement.
Source: Higher Regional Court of Cologne
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