Düsseldorf Higher Regional Court, 19 February 2013, Ref.: I - 24 U 157/12
For commercial tenants, it can be of existential importance that there are no other businesses offering the same products or services in the large property in which they have rented a shop.
For this purpose, commercial tenancy agreements often contain so-called anti-competition clauses.
Non-competition clauses can cover different protective purposes. Competition protection clauses can also relate to a single large property (e.g. a shopping centre) but also to entire districts if the landlord owns several properties in this district.
If the landlord undertakes not to let retail space to another company that sells the same goods as the tenant during the rental period, this includes comprehensive protection against competition according to case law (see BGH NJW-RR 1986, 9; OLG Celle WuM 1992, 538).
In the case mentioned above, the Düsseldorf Higher Regional Court had to decide whether the operator of a martial arts school was entitled to extraordinary termination because the landlord had rented another part of the same warehouse to the operator of another martial arts school.
Introduction and facts
In this case, the plaintiff had leased a section of a warehouse to the defendant for the operation of a martial arts school. The lease was concluded for three years and contained a non-competition clause which prohibited the landlord from letting to a competitor of the tenant who offered the same goods or services. Despite this clause, the plaintiff rented another part of the warehouse to another tenant who also ran a martial arts school. The defendant objected to this letting and invoked the contractually agreed anti-competition clause.
Termination and legal dispute before the regional court
After consulting a lawyer, the defendant declared extraordinary termination of the tenancy with effect from 31 December 2010 due to a breach of the protection against competition. Alternatively, ordinary notice of termination was also given. The plaintiff did not accept this and brought an action before the regional court. The regional court ruled in favour of the plaintiff and pointed out that the defendant could not sufficiently prove a breach of the protection against competition.
Appeal and decision of the Düsseldorf Higher Regional Court
The defendant appealed against the judgement of the regional court. The Düsseldorf Higher Regional Court (OLG) found in favour of the defendant and ruled that the extraordinary termination was effective. The OLG found that the plaintiff had breached the non-competition clause as it rented to another tenant who ran a martial arts school. In the court's opinion, the breach of the anti-competition clause constituted good cause for extraordinary termination in accordance with Section 543 (2) No. 1 BGB.
Legal basis and significance of the non-competition clause
Pursuant to Section 543 (2) sentence 1 no. 1 BGB, good cause for extraordinary termination exists in particular if the tenant is deprived of the contractual use of the rental property. Such a withdrawal can also be caused by a breach of an anti-competition clause, as was the case here. The defendant did not have to accept the fact that a competitor opened a similar business in the immediate vicinity. The OLG emphasised that the continuation of the tenancy was unreasonable for the defendant under these circumstances.
Conclusion
The judgement of the Düsseldorf Higher Regional Court shows the importance of anti-competition clauses in commercial tenancy agreements. Landlords are bound by these clauses and breaching them can give tenants the right to extraordinary termination. This judgement strengthens the position of tenants who rely on contractually guaranteed property rights.
Source Higher Regional Court Düsseldorf
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