No Limitation on Tenants‘ Claims for Defects

Commercial and residential tenants alike should note an interesting development in German tenancy jurisprudence. In a judgment pronounced on 17 February 2010 (file ref. VIII ZR 104/09), the Bundesgerichtshof (Federal Supreme Court – BGH -) held that a tenant’s claim for remedy of a defect in the leased object continues to exist for the entire duration of the lease, and is not subject to any limitation period. In view of this leading decision, landlords will be expected in future cases to have defects inspected and repaired promptly, rather than wait for tenants to come back – or not. The judgment was handed down in a residential tenancy case, however, doubtlessly also finds application to commercial leases.

In their reasoning, the judges – correctly – assign the sole responsibility for keeping the leased premises in good order (referred to in legal German as „vertragsgemäßer Zustand“ = a state of conformity with the contract) to the landlord. That obligation was permanent in character, existed for the entire duration of the lease and, therefore, was not caught by statutory limitation. Landlords not only had to deliver the premises in a „vertragsgemäßer Zustand“ at the outset of a lease, but to keep them that way thereafter.Limitation had to be ruled out already because during the whole lease period, the relevant duty of the landlord „arose anew every day“.

Like in most other cases involving landlord/tenant relationships in Germany, tenants are strongly advised to communicate in writing when announcing remedy claims – if the case should end up in court at a later stage, solid evidence – as opposed to witness statements and your own recollection – will be of the essence.

By: Thomas Krümmel, LL.M., Rechtsanwalt, Berlin

Field of Law: Commercial Leases