Berlin Regional Court, May 31, 2016, Case No.: 29 O 382/15
Tenancy disputes often arise from situations where the rented premises are not approved for the contractually agreed-upon use, and these disputes are frequently the subject of court decisions. In such cases, the main issues are whether the tenant can reduce the rent due to the lack of a building permit and/or whether the tenant is entitled to terminate the lease without notice.
In this case, however, the situation was reversed. The responsibility for obtaining the necessary public permits was placed on the tenant. Since the tenant did not provide the permit quickly enough, the landlord issued both an extraordinary and an ordinary termination of the lease.
The court case:
The plaintiff was the landlord, and the defendant was the tenant.
The plaintiff had rented his Unit No. 2 in a condominium building to the defendant under a lease agreement dated November 8, 2011.
According to Section 3, Clause 1 of the lease agreement, the defendant was permitted to use the rented property as a bakery/restaurant, provided that the necessary public permits were obtained.
The defendant operated a successful bakery on the premises.
Initially, the defendant’s baking activities were conducted between 3 a.m. and 3 p.m., as per the permits obtained. However, after achieving significant business success, the defendant later expanded the bakery’s operations to 24 hours a day and began supplying organic supermarkets, among others, in a scope disputed between the parties.
Following the resulting problems with the community of owners, the defendant was informed by the Mitte district office on 18 November 2014 that there were no objections to the extension of the baking times from a planning law perspective and that there was no requirement for approval in this regard.
The district office initiated a permit process for the expansion of operations.
After issues arose with the condominium association, the defendant received a communication from the Mitte District Office on November 18, 2014, stating that there were no planning concerns regarding the extension of baking hours and that no permit was required. However, under pressure from other co-owners, the district office reversed its position after an on-site inspection by the building authorities and initiated a permit process. On January 19, 2015, the defendant submitted the necessary building application. Despite this, the plaintiff demanded in a letter dated January 28, 2015, that the defendant reduce the bakery’s operating hours to those outlined in the original permit and submit a new permit by February 28, 2015. On February 25, 2015, the defendant requested an extension of this deadline, citing the ongoing permit process and a letter from the district office indicating that no prohibition on use would be issued during the permit process.
The tenant did not reduce the bakery’s operating hours during the ongoing permit process – landlord terminates without notice, alternatively with notice.
Nevertheless, on March 2, 2015, the plaintiff issued a notice of termination, without notice, and alternatively with notice. On March 7, 2015, the district office granted the defendant the requested building permit in accordance with the operational description, which only included the changed baking hours. Members of the condominium association unsuccessfully filed an objection, followed by a legal challenge in administrative court. Subsequently, the plaintiff repeatedly issued further notices of termination, the last one being on February 4, 2016.
Finally, the plaintiff filed a lawsuit for eviction.
The decision of the Berlin Regional Court:
In its aforementioned ruling, the Berlin Regional Court dismissed the eviction lawsuit.
The plaintiff’s argument that he had expected a „neighborhood bakery“ when the lease was signed and that the extended baking hours and off-premises deliveries were breaches of contract was rejected by the court, which noted that the lease contained no such restrictions.
The court saw no limitation on the bakery’s operations to a „neighborhood bakery.“
There were no restrictions on baking hours, production volume, or third-party deliveries. Therefore, the bakery was permitted to use the premises in any way legally permissible under public law.
Furthermore, the Berlin Regional Court held that the failure to timely provide the amended permit did not constitute a valid reason for termination in this case.
This was because the key issue was whether the use was substantively permissible under public law, while the permit itself was a formal act that would merely confirm this after examination.
Lack of a public permit does not entitle the landlord to terminate.
While the absence of a permit renders the use formally illegal, it is not the landlord’s responsibility to ensure that the tenant complies with the law, at least as long as the landlord’s own legal position or interests are not affected.
As the tenant clearly intended to comply with the law, had obtained the necessary permit, and the authorities had indicated that no prohibition on use would be issued, no official measures against the landlord were expected. Therefore, it was reasonable for the landlord to wait for the outcome of the permit process.
As a result, the plaintiff’s eviction lawsuit was dismissed.
Source: Source: Berlin Regional Court
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