Lease Agreement

Lease Agreement

Peter Harlander
Harlander & Partner Rechtsanwälte „Während im Mietrecht zahlreiche gesetzliche Bestimmungen existieren, ist dies bei der Pacht nicht der Fall“

Lease vs. rent – isn’t that the same thing?

Not at all. While numerous statutory provisions exist in tenancy law – and thus also for the tenancy agreement – this is not the case with leases. Even the few statutory regulations that do exist can generally be amended by contract and thus circumvented to a certain extent. This is surprising, given that leasing is of enormous importance in practice.

Who is the lessor?

In practice, it can certainly happen that the owner of a leased property is not the actual lessor. In such constellations, it is important to clarify what usage agreement exists between the owner and the lessor and whether leasing is even possible.

Rent or lease?

Do you want to “pass on” an existing company (including customer base and inventory) to a third party without selling it? In this case, a typical lease agreement exists.

A tenancy agreement exists in any case if only “empty” rooms are rented.

Important:

If the lessee buys the entire inventory (often by way of an “investment compensation”), this may constitute a company acquisition. This means that the acquirer assumes all of the predecessor’s liabilities. In such a case, it is advisable to draw up a detailed purchase agreement and precisely regulate existing old debts.

Unlimited or limited?

An unlimited lease agreement can be terminated by either party without stating reasons, subject to compliance with the agreed periods and deadlines, or, in the absence of an agreement, with six months’ notice to the half-calendar year. The agreement of a contractual waiver of termination for a certain period of time may be useful and necessary to protect the lessee, especially if they have made investments.

There is No Statutory Protection against Termination.

A fixed-term contract means that neither the lessor nor the lessee can terminate for the duration of the term. However, it is permissible to contractually agree on a termination option in addition to the term.

Maintenance obligations

There is no legally clear regulation regarding maintenance obligations. In principle, there is largely freedom of contract – the maintenance obligations can therefore be individually agreed between the parties.

Conversions

In principle, conversions are not permitted by law. Already planned conversions should therefore always be regulated or permitted in the lease agreement.

Return of the leased property

The leased property must always be returned in the condition in which it was taken over, taking into account natural wear and tear.

Investment compensation

An investment compensation (e.g. for inventory taken over) is generally excluded in practice. Should it be the unanimous will of the parties that an investment compensation is owed, an express contractual agreement should be made here.

In this context, it should also be noted that regulations are structured in such a way that, from a legal point of view, there is a pure lease agreement and not a company acquisition.

Operating costs

Since there is no statutory regulation or a statutory definition of operating costs, operating costs should be conclusively (not: “in particular”) defined and listed in the lease agreement, as well as a settlement method (e.g. monthly flat rates with annual offsetting up to June of the following year) should be agreed.

Lease payment

It is recommended to make a precise regulation regarding the lease payment, as this can no longer be unilaterally changed afterwards. An index adjustment is permitted if this has been contractually agreed.

Contracts

Contracts (such as employment contracts of existing employees) do not automatically transfer to the lessee. If this is desired, an express contractual agreement is required in any case.