As a result of the rulings of the Federal Court of Justice, it has long been accepted in residential landlord and tenant law that it is a defect in the rented premises if the floor area stipulated in the rental agreement deviates from the actual rented area by more than 10% (Section 536(1) of the Civil Code). Until recently, this has never been decided clearly for lease agreements for commercial premises. The Dusseldorf Higher Regional Court, in a November 17 2011 ruling (24 U 56/11), has followed the case law of the Federal Court of Justice on residential rental law and decided that it is also a defect in commercial lease agreements if the rented area deviates by more than 10%.

The higher regional court explained that applying the case law to lease agreements for commercial premises is justified because the economic aspect plays an important role in such agreements. It stated that a commercial tenant wishes to earn a profit through its activities in the rented premises, and thus will take particular care to ensure that it pays a rent which reflects the usage value of the rented premises. If the declared floor area differs from the actual area by more than 10%, the court deems that it can no longer be assumed that the rent reflects the actual usage value. According to Federal Court of Justice case law, the court assumes in such a case that the suitability of the premises for the contractual usage is reduced.

Therefore, the court stated that the tenant need only prove that there is a deviation of more than 10% in the floor area. In such cases the court will deem the rented premises to be automatically deficient and a rent reduction to be appropriate. It is irrelevant if the rental agreement claims the floor area to be approximate.

To determine a deviation in the floor area in case of a dispute, however, it must first be established what areas are actually included in the areas stated in the rental agreement and how these areas were calculated. In most cases – including the case on which the ruling was based – these points are not explicitly defined in the rental agreement. Therefore, the higher regional court had to interpret the rental agreement. It argued that if the calculation of the floor space were not explicitly defined when the rental agreement was concluded, the landlord could determine the floor area by using a permissible and possible calculation method. The usual calculation methods in commercial leases are either the standard DIN 277 or the applicable guidelines of the Real Estate Research Association. However, the higher regional court stated that it was important to ensure that the version of these regulations which was in force at the time of conclusion of the agreement must be used. Once the calculation method has been determined, it can then be decided for each individual case which rented areas should be counted as full or partial areas, and which should be excluded.

As this ruling shows, in the event of a dispute it is extremely difficult to determine the floor area if no calculation method is agreed in the rental agreement. As there are fundamentally two possible calculation methods, the landlord can never be sure that the court which decides the case will select the calculation method which the landlord implicitly assumed to apply at the time of the agreement or the method which gives the better result for the landlord.

It is thus recommended that the areas included in the declared floor space and the calculation method should be precisely stated in the rental agreement to avoid any disputes.

For further information on this topic please contact Kerstin Thiel at SIBETH Partnerschaft by telephone (+49 89 38 80 80), fax (+49 89 38 80 81 01) or email ([email protected]).