BGH, Decision of July 25, 2012 – XII ZR 22/11
Rules concerning the payment of the security deposit are indispensable in real property purchase agreement for leased real property. The German Federal Court of Justice (BGH) had to deal with the question, which party is entitled to a security deposit that became due prior to the transfer of ownership of a sold real property, but had not been paid by the lessee yet.
The acquirer of a leased commercial building enters into the seller’s due claim for payment of the security deposit, which arose prior to the transfer of ownership, pursuant to Sections 566 paragraph 1, 578 of the German Civil Code (BGB).
The former owners and lessors (“Sellers”) of leased commercial premises demanded from a lessee of the sold real property payment of the contractually agreed security deposit to the new owner (“Acquirer”).
As agreed, the lessee had pledged German federal treasury notes (Bundesschatzbriefe) as a security deposit to the Sellers and had asked the Sellers to release these notes upon their maturity. It was agreed in this context that equivalent security could also be provided in a different form. The Sellers granted the release of the federal treasury notes. In spite of a request prior to the transfer of ownership to the Acquirer, the lessee did not provide a new security deposit. It was then agreed in the purchase agreement between the Sellers and the Acquirer that the Sellers should assert the claim for the security deposit against the lessee, which was now open (again). The Sellers then sued the lessee for payment of the security deposit to the Acquirer.
CONTENT AND SUBJECT OF THE DECISION
The BGH first finds that the Sellers are able to assert the security deposit in a lawsuit by way of derivative action (Prozessstandschaft) for the benefit of the Acquirer.
From the perspective of substantive law, the Acquirer is entitled to the claim for payment of the security deposit. According to Section 566 paragraph 1 BGB, which also applies to commercial leasing law via Section 578 BGB, an acquirer enters into the rights and duties resulting from the lease for the duration of his ownership instead of the seller. A new lease between acquirer and lessee arose upon transfer of ownership, the content of which was identical to the one formerly existing with the seller. Section 566 BGB only covered those rights and obligations, which (i) either had to be classified as leasing law-related or (ii) were inseparably related to the lease agreement. Rights and duties outside of the lease were not covered, even if they were governed by the lease agreement. In accordance with these criteria, the obligation to pay the security deposit had to be classified as leasing law-related, since it served to secure claims of the lessor under the lease and was therefore inseparably related to it. The fact that the claim for payment of the security deposit had already been due prior to the transfer of ownership to the acquirer was irrelevant. Even though claims that had become due already prior to the transfer of ownership generally remained with the seller, this did not apply to the payment of a security deposit that had become due prior to the transfer of ownership, since the purpose of the security deposit was to secure all claims of the lessor throughout the entire term of the lease agreement, which also included the claims of the acquirer under the newly-created lease agreement with the same content. This result is also supported by the fact that an acquirer enters into the rights and obligations established by the paid security deposit pursuant to Section 566a sentence 1 BGB and that the seller’s liability is only subordinate pursuant to Section 566 sentence 2 BGB. It would therefore not make sense to attribute the already due claim for payment of the security deposit to the seller, if the acquirer was to be primarily liable for it. The acquirer is therefore also entitled to the claim for payment of the security deposit by the lessee, if the claim had become due prior to the transfer of ownership to the acquirer.
The follow-up question, whether the above also applies if the seller is entitled to claims against the lessee under the lease, which arose prior to the transfer of ownership, did not have to be decided and was therefore left open.
IMPACT ON DAY-TO-DAY BUSINESS
The parties of a real property purchase agreement should formulate the rules concerning rent deposits carefully (also) considering this case law. It should be set forth as detailed as possible, which security deposits are owed in which amount, which have already been paid, and which may have already been utilized by the seller. It should then e.g. be set forth, who should be entitled to any unpaid security deposits and who asserts these against the lessee. In addition, the seller should protect himself against the (subordinate) claims of lessees for repayment of paid security deposits, e.g. through an indemnification agreement.