BGH, Decision of March 7, 2012 – XII ZR 13/10

If the tenant has provided security to the landlord for the fulfillment of his obligations, the acquirer enters into the rights and obligations established thereby in the case of a sale and transfer of the real property pursuant to Section 566 a of the German Civil Code (BGB). So far, there was no high-court decision as to whether the acquirer can also be held responsible for the repayment of the rent deposit, if this is no longer possible vis-à-vis the old landlord who has become insolvent. This ambiguity has now been clarified by the German Federal Court of Justice (BGH) in its decision of March 7, 2012.

HEAD NOTE

The obligation to repay the rent deposit to the tenant passes to the acquirer of a leased real property by virtue of law, That even applies if the previous owner, who has become insolvent, did not invest the rent deposit, which he had received from the tenant, separately from his other assets.

FACTS

With regard to the lease of commercial premises, the plaintiff paid an agreed rent deposit to the landlord, who did not invest it separately from his other assets. After the commencement of insolvency proceedings for the assets of the landlord, the real property was auctioned off by the insolvency administrator. The defendant became the new owner. The plaintiff then demanded repayment of the rent deposit, which was due to be repaid. The Local Court allowed a lawsuit in this respect, during the appellate instance, however, the defendant prevailed.

CONTENT AND SUBJECT OF THE DECISION

To substantiate its decision, the District Court stated that the defendant did indeed enter into the obligation of the previous owner pursuant to Section 566 a of the German Civil Code (BGB). But the claim for repayment of the rent deposit did not exist or was at least not due. The tenant was not entitled to a claim for repayment against the acquirer, if the acquirer is in turn prevented under insolvency law to enforce his claims against the seller for payment of the rent deposit. This was the case, if the underlying claim has turned into an insolvency claim due to the occurrence of insolvency. The District Court bases its decision on the consideration that the protection of Section 566 a BGB could not go so far that the tenant obtained a position in respect to the rent deposit due to the replacement of the landlord, which he no longer had before. It did not make sense that the legislator had wanted to strengthen the position of the tenant so much. The wording rather suggested that only the duties that actually exist at the time of the transfer of rights could be meant. It was generally up to the tenant to take care that the landlord invests the rent deposit separately from his own assets.

These considerations do not stand up to a review by the BGH. The acquirer was obliged to repay the rent deposit when it becomes due for repayment. Whether and under which circumstances he is in turn able to take recourse to the previous owner was irrelevant according to the BGH because the tenant’s rights falling into the auction conditions are to be fulfilled irrespective from that. According to Section 44 paragraph 1 ZVG, only those bids are admitted during the auction, which cover the rights that are senior to the claim of the creditor as well as the costs of the proceedings (so-called lowest bid). The auction conditions furthermore determine, into which additional obligations the acquirer enters. This includes according to Section 57 ZVG the obligation to pay back any security provided by the tenant pursuant to Section 566 a BGB. According to the BGH, the latter did not distinguish according to whether this obligation existed in the relationship of the tenant to the old landlord. Pursuant to the provision preceding, however, Section 572 BGB old version, the acquirer was obliged to return the security only, if it is surrendered to him or if the acquirer takes over the obligation to return it vis-à-vis the landlord. After the revision of Section 566 a BGB, the acquirer is obliged to repay the security to the tenant irrespective of whether he has received the rent deposit or can still receive it from the old landlord. According to the BGH, this was based on a statutory judgment for the benefit of the tenant, according to which the acquirer bears the insolvency risk of the former landlord, if the latter has neither invested the rent deposit in an insolvency-proof manner nor surrendered it to the acquirer.

IMPACT ON DAY-TO-DAY BUSINESS

It was indeed disputed, whether the protection of the tenant intended by Section 566 a BGB goes so far that he may obtain a better position in respect to the rent deposit through a replacement of the landlord than the one that existed in relation to the old landlord. The BGH decided in favor of a tenantfriendly interpretation here and substantiated this in a dogmatically clean manner. In the end, it emphasizes logically correctly that the legislator has essentially created an encumbrance of the leased real property with the revision of Section 566 a BGB.