OLG Brandenburg, decision of October 17, 2012 – 11 O 153/10

Since the introduction of the Price Clause Act of September 7, 2007, which replaced the Price Clause Directive (Preisklauselverordnung), the legal consequence of a violation against the provisions by an indexation clause under the previous law is unclear. The transition provision applies only to explicitly approved clauses. Beyond this, Section 8 PrKlG applies, according to which price clauses are ineffective only after a judicial determination.

FACTS

The legal dispute deals, inter alia, with subsequent increased rent claim of the lessor as plaintiff for the period from December 2004 until May 2008 based on a contractual indexation clause from 2000. The parties agreed a leasehold term of five years with the lessee being entitled to unilaterally extend the term by further five years. According to the contractual provisions, the lessee had to bear the service charge himself directly and reimburse the lessor only for a few precisely specified kinds of service charge costs upon invoice. Subsequently, the parties orally agreed on a monthly service charge payment (unclear whether as advance payment or lump sum) to the lessor.

CONTENT AND SUBJECT OF THE DECISION

The court correctly assesses the validity of the indexation clause pursuant to the new Price Clause Act, although the agreement dates from 2000. The reason is, that the transitional rule under Section 9 paragraph 1 PrKlG provides for the continued application of the Price Clause Directive (PrKlV) only for existing clauses which have been either explicitly permitted or for which a permit has been confirmed to be unnecessary (negative clearance). In the case at hand, the indexation clause had not been permitted but was initially agreed based on the fictitious approval according to the stipulation of the Price Clause Directive. The respective stipulation has been included in the Price Clause Act without changes and requires either the lessor’s waiver of its ordinary termination right for a time of at lease ten years or the lessee's unilateral right to extend the lease term to ten years. At hand, the lessee was entitled to extend the term to ten years in total.

However, such fictitious approval is discontinued upon the pre-requirements not being met anymore. In particular, a non-compliance with the writtenform requirement entails the invalidity of the agreed term. The lease agreement can be terminated by either party at any time. In the present case, the violation of the written-form requirement consists of the subsequent oral amendment of the contract. The court considers the subsequent change regarding service charge payments as a material change of the contract. This is substantiated by the court primarily with the relative amount of the payment, which amounts to nearly 15 percent of the base rent and the expansion of the lessor’s abilities to terminate the agreement and; because the non-payment by the lessee in respect to this service charge payment on two dates opens up the ability to terminate pursuant to Sections 581 paragraph 2, 543 paragraph 2 sentence 1 No. 3 of the German Civil Code (BGB).

According to the court, however, the invalidity of the indexation clause occurs not only when determined by the court, but immediately as soon as the writtenform requirement is violated.

According to the Price Clause Act, a clause that violates the provisions of the law is invalid (Section 1 PrKlG). However, the invalidity is caused only once it has been established by a court in a legally binding way and only for the future (Section 8 paragraph 1). In deviation from this, earlier invalidity, e.g. from the outset or from the time of assertion of the invalidity, may be agreed upon.

Section 8 PrKlG is interpreted differently in respect to its effect on clauses already agreed prior to its introduction. One legal view derives from the wording of the transition provision that all clauses, which were not previously approved or for which an explicit negative clearance was obtained, are subject to the Price Clause Act and thus also the rule regarding invalidity. Accordingly, the judicial establishment of invalidity would have to be caused also for (invalid) indexation clauses under the former legal situation. Otherwise, the clauses would remain applicable. Another view considers – as interpreted by the court – the reference to the violation “against this law” (i.e. the Price Clause Act) as evidence that this rule is only meant to apply to those clauses, which were agreed in accordance with the provisions of the Price Clause Act. The court adopts this view, however, the interpretation by the court is based on a misunderstanding. According to the cited view, this citation pertains only to the relationship to the invalidity of a clause due to other reasons, e.g. as an unreasonably discriminating general term and condition. The applicability of Section 8 PrKlG to all previously agreed indexation clauses, however, is not questioned.

Finally, the court argues that the invalidity of the clause had occurred already prior to the introduction of the Price Clause Act at the time of violation against the written-form requirement. The invalidity occurred immediately under the former legal situation and the mere introduction of the Price Clause Act was not capable of making the clause effective. The court refers to case law of the German Federal Court of Justice (BGH) regarding other matters of law in its argument here, according to which the annulment of a prohibiting statute leaves unaffected the invalidity of legal transactions, which were concluded prior to the annulment in violation of the statute. In the present case, the prohibiting statute (i.e. the Price Clause Directive) had merely been modified by the Price Clause Act.

IMPACT ON DAY-TO-DAY BUSINESS

The rule of Section 8 Price Clause Act appears neither particularly well-worded to leave no doubt, nor does it seem that the legislator has considered the economic consequences in their entirety. It is nevertheless doubtful, whether the dogmatic explanation of the court can be reconciled with the statutory rule and the will of the legislator.

The eventual result of the court’s decision is that the introduction of the Price Clause Act would have no factual effect on all contracts concluded prior to September 14, 2007 with fictitiously approved indexation clauses. It remains to be seen, whether this case law will prevail and how the German Federal Court of Justice will decide in respect to this issue. If the fictitious approval of an indexation clause is cancelled – as in most cases due to a violation of the written-form requirement or otherwise – or does not apply, it will particularly depend on whether this violation occurred prior to the introduction of the Price Clause Act. If this was the case, a lessee should not rely on the immediate invalidity for reasons of precaution, but also pursue the judicial establishment of the invalidity. On the other hand, a lessor as a matter of precaution will have to take into account that the clause already may be invalid without a court decision and that subsequent claims for rent might not be enforceable.

Other alternatives to immediately enforcing an adjustment also face difficulties in practice: even though the parties had also agreed in the present case that an effective rule, which resembles the economic intent, should be included if the indexation clause was invalid; however, according to the correct view of the court, the other party will first have to be sued for the issuance of a corresponding declaration in order to enforce this claim. The court sets high standards for the lessor’s statements for the adjustment of the rent for reasons of equitableness. It must be demonstrated that the adjustment is justified due to not only the general increase of the rent level but in particular for comparable objects. However, depending on the particularities of the object, there may not be any comparable data or comparable objects at all.