FACTS OF THE CASE

In the case at hand, a woman gave a condominium to her step-grandson, who was only 5 years old at the time of the donation. After an agreement with the child’s parents on the donation, it was notarised that the donor could use the flat herself and, under certain conditions, also demand to retransfer the condominium. They agreed on the registration of the usufruct (Nießbrauch) and priority notice of reconveyance. However, only the change of ownership was entered in the land register, not the usufruct. The child’s parents wanted to apply for registration about half a year later, but the land registry office refused the registration. They demanded approval from the family court. As the Court of Appeal ruled in favor of the land registry, the donor turned to the Federal Supreme Court.

NECESSITY OF FAMILY COURT APPROVAL

It had to be clarified whether such authorization of the family court was required in the present case. In principle, according to § 1643 Abs. 1 BGB in conjunction with § 1821 Abs. 1, Nr. 1 BGB parents require the permission of the family court to dispose of their child’s home. In the case at hand, it was already doubtful whether the creation of the usufruct and the registration of the reconveyance constituted a disposition. In principle, the encumbrance of the child’s property with a usufruct is a disposition requiring approval, since such a disposition is not merely legally advantageous for the minor. However, approval is not required if the encumbrance of the property already takes place upon acquisition by the minor. If the encumbrance takes place with the transfer of ownership, this is to be equated with the acquisition of property already encumbered. The decisive factor here was therefore whether there was no direct connection between the acquisition and the encumbrance of the property.

BGH, DECISION OF 11.03.2021 – V ZB 127/19

The decision of the V. Zivilsenat of the BGH states: In the case of a donation of an encumbered dwelling to a minor, no approval of the family court is required if the donor wishes to retain the usufruct of it. All that is required is the approval of the parents. The content of the deed of donation, which showed that the flat had already been given away encumbered with the usufruct and the conditional priority notice of reconveyance, was relevant for the decision of the Federal Supreme Court. Section 1821 (1) no. 1 of the Civil Code only protects the minor’s existing real property. In this case, the encumbrance of the condominium was already part of the acquisition process, the conveyance was declared at the same time as the in-rem agreement on the encumbrance. The minor’s existing assets were therefore not affected..

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However, if the written form requirement is not complied with, the rental agreement is deemed to have been concluded for an “indefinite period” in accordance with § 550 p. 1 BGB. As a result, it is subject to the statutory provisions and can be terminated in accordance with § 542 I in conjunction with § 573c BGB with a statutory period of notice of three to nine months depending on the length of the previous term of the agreement. The notice of termination can only be issued according to § 550 S. 2 BGB at the earliest one year after the transfer of the living space – and in connection with § 578 I BGB of the commercial space – but completely independent of what was originally agreed between the parties to the contract with regard to the duration of the lease. Changes or additions must be handled with caution, because their irregularity of form leads to a lack of written form for the whole contract.

Historically, the background to the strict written form requirement is the protection of the purchaser. In the draft version of the German Civil Code (BGB), it was decided to apply the principle “Purchase does not break rent” according to § 566 BGB, which stipulates that the purchaser of a property enters into the liability of the old landlord towards the current tenant. In compensation for the fact that the acquirer cannot break away from the tenancy, however, he may rely on the contracts submitted to him in the course of the evidential value of the written form.

The desire to a law change of the § 550 BGB arose now by the fact that in practice the written form requirement was used again and again to get rid of unpleasant become contracts, in that tenants or landlords looked for form errors in the contracts and additional agreements. As soon as such was found, the contract was considered as not in written form closed and it could be quit to the contracting party promptly. In particular after the BGH 2017 declared the written form cure clauses in rental agreements to be invalid, the problem became increasingly acute. The protection of purchasers is no longer at the forefront of § 550 BGB. Instead, the normative scope of application has changed into a scene of tenant-landlord disputes.

Particularly in the area of commercial tenancy law, considerable legal uncertainty has developed, as evidenced by the increasing number of revision rulings in the last 20 years. When renting commercial space, it is particularly important for the tenant and landlord to know the duration of the contract period in order to be able to adapt the investments to it. The tenant often considers financial assistance as well as conversion work and the landlord secures regular income for the agreed period. Trust in the existence of the contract is therefore of great importance for both parties.
In the course of this, the state of North Rhine-Westphalia submitted a bill to the Bundesrat, which passed it on to the federal government in 2019. At the beginning of 2020, the draft as well as the federal government’s statement to this effect were sent to the Bundestag. A decision by the parliamentarians is still pending.

BILL OF THE FEDERAL STATE OF NRW AND THE BUNDESRAT

The draft law contains above all a deletion of § 550 BGB and the inclusion of paragraph III in § 566 BGB in the following form:
“(3) If the lease is not concluded in writing for a period of more than one year, the purchaser is entitled to terminate the lease in accordance with the statutory provisions. The termination can only be effected within three months after the purchaser has become aware of the agreement concluded without observing the required written form. It is, however, permissible at the earliest one year after the transfer of the living space. The notice of termination shall become invalid if the tenant objects to it within two weeks of receipt and, by continuing the tenancy, declares his willingness to comply with the agreements made in writing while maintaining the required written form. The notice of termination cannot be based on such violations of the written form that were only made after the acquisition”.
The Bundesrat argues that by the regulation of paragraph III in sentence 1 a reduction of the normative protective purpose to the protection of the acquirer could be achieved, which was historically already intended. Furthermore in sentence 2 it is standardized that the period of notice of the landlord is limited to three months, so that the tenant does not have to count in the long run on a notice on the part of the Erwerber. Sentence 3 clarifies that the notice is permissible in any case at the earliest after one year after housing supply. Sentence 4 creates the possibility for the tenant to object in the case of an ordinary termination by the acquirer due to lack of written form. He can decide to continue the tenancy under the conditions of the agreements made in conformity with the written form. Furthermore, the termination of the acquirer pursuant to sentence 5 may not be based on a lack of written form of agreements made after the acquisition.

Three alternatives have been added to the draft law, which, however, have been expressly described by the Bundesrat as unsatisfactory. The first alternative provides for a deletion of § 550 BGB without replacement and the introduction of a liability of the seller. However, this is rejected, as the purchaser would be deprived of the possibility to inform himself sufficiently about the restrictions of his property right. In addition, the seller is already liable to the purchaser for culpable breaches of duty according to the general rules on damages. The second alternative also considers a deletion of § 550 BGB without replacement. To compensate for this, the introduction of a public register for rental contracts has been proposed. This is to be disapproved with the argument of considerable effort for the public administration as well as for the contracting parties. Finally, the third alternative could be the deletion of the validity of § 550 BGB for the area of commercial rental law. On the other hand, the Bundesrat objected that there would be a fragmentation of tenancy law without any objective reason for the unequal treatment of residential and commercial tenancy law, that also in residential tenancy law the possibility of termination due to lack of written form constitutes a disproportion and that the acquirer’s interest in information would be unreasonably restricted.

STATEMENT OF THE FEDERAL GOVERNMENT

The Federal Government rejects the bill of the Bundesrat in the result. It replies that there are no practical problems with § 550 BGB in the residential tenancy law and therefore there is no need for legislative action for a possible change in this area. Furthermore, she argues that the effects of the proposed change in the law could be considerable, since after the deletion of § 550 only the written form requirement of § 575 I BGB would apply to residential rents, which only provides for the written form requirement when a time limit on the tenancy is established and not for other contractual provisions as § 550 BGB does. In addition it criticizes the fact that with the new bill the tenant would have no possibility of notice with lack of writing at all with the new law, while the landlord could sell the real estate to close persons and could get rid thereby further unpleasant become contracts with tenants. In addition, the landlord-purchaser would have the right to choose whether to continue the informally concluded agreement tacitly or to have it declared invalid. Finally, the German government argues that there could be a general decline in written rental agreements, which could lead to an increase in litigation and disadvantage the weaker parties.

CONCLUSION

Including all the above-mentioned aspects, there is a clear case for a change in the law.

In view of the historical context of § 550 BGB, the reduction of the normative protective purpose to the protection of the acquirer appears to be necessary. In addition, this would also reduce the number of legal disputes in practice, because § 550 BGB could no longer be used by landlords and tenants to give proper and thus usually premature notice of termination to a contractual partner who has become unpopular under the guise of a lack of written form in the rental agreement. Whether without the written form requirement of § 550 BGB the protection of evidence and the protection of landlord and tenant against haste would be lost – which the Federal Government and the Federal Supreme Court have given cause for concern – remains questionable, since the written form of tenancy agreements is already used by nature. If empirically seen a decrease of formally correct rental agreements should be determined nevertheless, a written form requirement for rental agreements could remedy the problem. In any case, the requirement of § 550 BGB obviously does not provide the desired protective effect for agreements made orally or informally, but leaves much more room to trick a contractual partner who is not familiar with the law and legal practice. This argument therefore does not lead to a justification of the current imbalance and, furthermore, has historically not been covered by the protective purpose of § 550 BGB. The limitation of § 550 BGB to residential tenancy law is not to be considered by the purchaser of the real estate to compensate his limited property right, especially with regard to the right and interest in information. Furthermore, a fragmentation of the tenancy law should be avoided.

The standardization of a period of notice of three months “from knowledge” of the lack of the written form for the purchaser appears to be more problematic, because this creates unreasonable uncertainty for the tenant. For the tenant, there is no clear way of proving whether and when the purchaser has acquired “knowledge” of the agreements made verbally or informally – apart from his own reference. This is, however, far removed from practice, as the tenant would thereby give his new landlord the opportunity to have the corresponding agreement declared effective or invalid at his free discretion. Thus the tenant would have to live several years in uncertainty about the existence of his agreements.
Rather therefore a three-month period of notice is meaningful with lack of writing for the Erwerber “starting from acquisition” of the living or trade area. The buyer would have to ask the seller expressly for verbal or informal agreements with the tenant and the seller would be forced to pass on all information in order to protect himself from the challenge of the purchase contract due to fraudulent deception as well as possible claims for damages. Ultimately, it would not be prevented that verbal or informal agreements can be declared invalid by the purchaser against the tenant. However, the risk of invalidity always exists if an agreement between parties does not have a clear evidentiary function. In any case, the regulation would lead to the fact that the tenant would have to endure the uncertainty regarding the possibility of termination in case of a lack of written form only for a foreseeable time. At the same time, this is also sufficient for the historically intended protection of the acquirer, because informing the acquirer about ancillary agreements does not represent an unreasonable burden for him, since he is in any case in the contract negotiations about the purchase with the seller.
In addition, it should also be built in that the tenant can offer the acquirer a cure. If a main rental agreement suffers from a lack of written form, then the tenant’s possibility of objection would not be able to save him from the end of the rental relationship.
The criticism that a landlord could sell a room to persons close to him in order to promptly terminate an unwelcome contractual partner, captures a rather unrealistic or at least rare scenario, since the acquisition involves a land transfer tax as well as some further expenses. Furthermore, this is likely to be considered an immoral transaction.

Dass eine zweiwöchige Widerspruchsfrist des Mieters hinsichtlich der Kündigung durch den Erwerber gilt, ist gutzuheißen. Es besteht somit nämlich keine verfrühte außervertragliche Kündigungs-möglichkeit, wenn der Mieter sich mit den Vereinbarungen, die schriftformkonform getroffen wurden, zufrieden erklärt. Das ist auch im Sinne des Erwerberschutzes, da dieser lediglich vor Unklarheiten des Mietverhältnisses, in das er gemäß § 566 BGB eintritt, geschützt werden soll. Ferner verhindert die Widerspruchsfrist, dass eine formwidrige Nebenabrede direkt zur Unwirksamkeit des ganzen Vertrages führen kann, so wie es vorher möglich war.

Die Regelung über den frühestmöglichsten Kündigungszeitpunkt, welcher auf den ersten Tag nach Ablauf eines Jahres nach Überlassung des Mietraumes terminiert ist, erscheint fair.

Genauso gibt es keine Einwände gegen das Kündigungsverbots wegen Schriftformmangels durch den Erwerber bezüglich einer formwidrigen Vereinbarung, die nach dem Erwerb des Wohn- oder Gewerberaumes getroffen wurde.

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During the pandamic commercial tenants were mostly unable to record any turnover, but still had to continue paying rent. Many tenants were therefore of the opinion that they were not obliged to pay the (full) rent for this period. In the legal literature, solutions on the right to reduce the rent and on the adjustment after the so-called cessation of the basis of the transaction were extensively discussed.

PREDOMINANT VIEWS IN CASE LAW: OBLIGATION TO PAY RENT REMAINS IN FULL FORCE AND EFFECT

Now several courts have ruled that commercial tenants must pay the rent in full despite the closure orders and are not entitled to reduce the rent. Even if the tenant cannot continue his business due to the closure orders or only makes losses, he is in principle still obliged to pay rent and ancillary costs. The economic risk is borne by the tenant.

REGIONAL COURT OF ZWEIBRÜCKEN: NO RIGHT TO NON-PAYMENT OR REDUCTION OF RENT

The Regional Court of Zweibrücken ruled in September 2020 (AZ: HK O 17/20) that the temporary closure of commercial rental space due to an official ban on operations as a result of the Corona pandemic does not constitute a right to non-payment or reduction of rent for the commercial tenant (a retail company).

A reduction can only be considered in the event of a defect in the rental object within the meaning of § 536 BGB. However, the tenant’s loss of turnover in particular does not constitute a defect in the rented property. The same applies to restrictions under public law that do not have their cause in the rented object.

Thus, the pandemic-related closure orders were – according to the Regional Court – business-related and therefore did not justify a claim for a reduction of the rent. In particular, the landlord fulfilled his main contractual obligation to provide the property for use. Something else could apply if, for example, special rules were made for visiting shopping centers. In such cases, the location of the rented property in a shopping centre was the decisive factor. The official prohibition then refers to a circumstance that affects the rented property made available by the landlord. If the complete closure of a shopping center is ordered by the authorities, a partial rent reduction is conceivable.

NO DISTURBANCE OF THE BASIS OF THE CONTRACT

As a rule, a claim for adjustment of the contract due to a disturbance of the basis of the contract pursuant to Section 313 of the German Civil Code (Bürgerliches Gesetzbuch – BGB) and an accompanying reduction of the rent is also out of the question. The provision of § 313 BGB is applied very restrictively. It is true that the business basis of the tenancy agreement ceased to exist due to the pandemic-related prohibition of operation. However, it was reasonable for the tenant to adhere to the contract, as the tenant generally bears the risk of use of the rented property. In particular, the commercial tenant bears the risk of being able to make a profit with the leased property.

In addition, the rented property could in most cases continue to be used for storage purposes and as an office during the lockdown.

At most, if sticking to the contract would lead to unacceptable results, in particular to a threat to the tenant’s existence, a contract adjustment could be made. In addition, the risk of termination without notice by the landlord due to arrears of payment would be temporarily absorbed under the conditions of Article 240 § 2 EGBGB.

Impossibility within the meaning of sections 275 and 326 of the German Civil Code (Bürgerliches Gesetzbuch – BGB) was also out of the question, as the closure order issued by the authorities was only valid for a certain period of time and there was no (permanent) obstacle to performance.

REGIONAL COURT FRANKFURT/MAIN: RISK OF USE WITH THE TENANT – NO RIGHT TO REDUCtion of RENT

The Regional Court of Frankfurt/Main decided on 08.08.2020 (AZ: 2-05 O 160/20) that the termination barrier of Art. 240 § 2 EGBGB does not affect the tenant’s obligation to pay. In principle, the risk of use was with the tenant. In the case of commercial leases, this distribution of risk was established by settled case-law. Loss of turnover is therefore always at the sole risk of the tenant. The prohibition of termination does not contradict this, as it only aims at protecting the commercial tenant from “homelessness”. A right to reduce the rent would not exist in favour of the defendant tenant (a retail chain).

MUNICH REGIONAL COURT: RESTRICTIONS AS A RESULT OF THE CORONA PANDEMIC ENTITLE THE TENANT TO A RENT REDUCTION

While courts predominantly deny the possibility of reduced rent payments, the Regional Court of Munich (LG München I, final judgment of 22.09.2020 – 3 O 4495/20) is of the opinion that this may be possible.
Since it has been recognised since the early days of the application of the German Civil Code that a prohibition on the opening of retail or hospitality outlets can be a defect within the meaning of section 536(1) sentence 1 of the German Civil Code, the restrictions in the Corona pandemic on the letting of a business premises for the operation of a retail business also constitute a defect; according to the leading sentence of the ruling.

NEW LAW PROVIDES PRESUMPTION OF DISTURBANCE OF THE BASIS OF THE CONTRACT

The legislator is now trying to counteract this legal uncertainty with a new law of 17.12.2020 (BT Drucksache 761/20):

Art. 240 EGBGB § 7
Disturbance of the Basis of Tenancy and Lease Agreements
(1) If, as a result of government measures to combat the COVID-19 pandemic, leased land or leased premises that are not residential pandemic are not usable for the tenant’s business or are usable only with considerable restrictions, it is it shall be presumed that a circumstance within the meaning of section 313, paragraph 1 of the Civil Code, which has become the basis of the tenancy agreement, has changed seriously after the conclusion of the agreement.
(2) Paragraph 1 shall apply mutatis mutandis to lease agreements.

According to the legislator’s justification, the new regulation is intended to relieve the following service providers in particular:

• Service businesses in the field of personal care – for example hairdressers, cosmetic studios and massage practices,
• Commercial overnight accommodation
• Retail shops
• Theatres, concert halls, cinemas and other cultural institutions
• Swimming pools and fitness studios
• Catering establishments as well as bars, clubs, discotheques, pubs and similar establishments
• Premises used for recreational purposes

On the one hand, the law is intended to eliminate the uncertainties that sometimes exist in practice. On the other hand, the negotiating position of commercial tenants is to be strengthened. The regulation should clarify that § 313 BGB (disturbance of the basis of the contract) applies in principle and thus appeals to the willingness of the contracting parties to negotiate. General and tenancy law warranty and structuring rights would continue to take precedence over section 313 BGB.

For cases in which a court decision is necessary, [with § 44 EGZPO] an accompanying procedural regulation is made to accelerate the court proceedings so that legal certainty can be achieved more quickly.

§ SECTION 44 EGZPO
Priority and acceleration requirement
(1) Proceedings concerning the adjustment of the rent or lease of land or premises other than residential premises because of government measures to combat the COVID 19 pandemic shall be given priority and expedited.
(2) In proceedings under subsection (1), an early first hearing shall be held not later than one month after service of the
of service of the statement of claim.

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Der Beitrag COMMERCIAL TENANCY LAW: TENANT’S OBLIGATION TO PAY RENT AND PANDEMIC-RELATED CLOSURES erschien zuerst auf JUR LAW.

During the pandamic commercial tenants were mostly unable to record any turnover, but still had to continue paying rent. Many tenants were therefore of the opinion that they were not obliged to pay the (full) rent for this period. In the legal literature, solutions on the right to reduce the rent and on the adjustment after the so-called cessation of the basis of the transaction were extensively discussed.

PREDOMINANT VIEWS IN CASE LAW: OBLIGATION TO PAY RENT REMAINS IN FULL FORCE AND EFFECT

Now several courts have ruled that commercial tenants must pay the rent in full despite the closure orders and are not entitled to reduce the rent. Even if the tenant cannot continue his business due to the closure orders or only makes losses, he is in principle still obliged to pay rent and ancillary costs. The economic risk is borne by the tenant.

REGIONAL COURT OF ZWEIBRÜCKEN: NO RIGHT TO NON-PAYMENT OR REDUCTION OF RENT

The Regional Court of Zweibrücken ruled in September 2020 (AZ: HK O 17/20) that the temporary closure of commercial rental space due to an official ban on operations as a result of the Corona pandemic does not constitute a right to non-payment or reduction of rent for the commercial tenant (a retail company).

A reduction can only be considered in the event of a defect in the rental object within the meaning of § 536 BGB. However, the tenant’s loss of turnover in particular does not constitute a defect in the rented property. The same applies to restrictions under public law that do not have their cause in the rented object.

Thus, the pandemic-related closure orders were – according to the Regional Court – business-related and therefore did not justify a claim for a reduction of the rent. In particular, the landlord fulfilled his main contractual obligation to provide the property for use. Something else could apply if, for example, special rules were made for visiting shopping centers. In such cases, the location of the rented property in a shopping centre was the decisive factor. The official prohibition then refers to a circumstance that affects the rented property made available by the landlord. If the complete closure of a shopping center is ordered by the authorities, a partial rent reduction is conceivable.

NO DISTURBANCE OF THE BASIS OF THE CONTRACT

As a rule, a claim for adjustment of the contract due to a disturbance of the basis of the contract pursuant to Section 313 of the German Civil Code (Bürgerliches Gesetzbuch – BGB) and an accompanying reduction of the rent is also out of the question. The provision of § 313 BGB is applied very restrictively. It is true that the business basis of the tenancy agreement ceased to exist due to the pandemic-related prohibition of operation. However, it was reasonable for the tenant to adhere to the contract, as the tenant generally bears the risk of use of the rented property. In particular, the commercial tenant bears the risk of being able to make a profit with the leased property.

In addition, the rented property could in most cases continue to be used for storage purposes and as an office during the lockdown.

At most, if sticking to the contract would lead to unacceptable results, in particular to a threat to the tenant’s existence, a contract adjustment could be made. In addition, the risk of termination without notice by the landlord due to arrears of payment would be temporarily absorbed under the conditions of Article 240 § 2 EGBGB.

Impossibility within the meaning of sections 275 and 326 of the German Civil Code (Bürgerliches Gesetzbuch – BGB) was also out of the question, as the closure order issued by the authorities was only valid for a certain period of time and there was no (permanent) obstacle to performance.

REGIONAL COURT FRANKFURT/MAIN: RISK OF USE WITH THE TENANT – NO RIGHT TO REDUCtion of RENT

The Regional Court of Frankfurt/Main decided on 08.08.2020 (AZ: 2-05 O 160/20) that the termination barrier of Art. 240 § 2 EGBGB does not affect the tenant’s obligation to pay. In principle, the risk of use was with the tenant. In the case of commercial leases, this distribution of risk was established by settled case-law. Loss of turnover is therefore always at the sole risk of the tenant. The prohibition of termination does not contradict this, as it only aims at protecting the commercial tenant from “homelessness”. A right to reduce the rent would not exist in favour of the defendant tenant (a retail chain).

MUNICH REGIONAL COURT: RESTRICTIONS AS A RESULT OF THE CORONA PANDEMIC ENTITLE THE TENANT TO A RENT REDUCTION

While courts predominantly deny the possibility of reduced rent payments, the Regional Court of Munich (LG München I, final judgment of 22.09.2020 – 3 O 4495/20) is of the opinion that this may be possible.
Since it has been recognised since the early days of the application of the German Civil Code that a prohibition on the opening of retail or hospitality outlets can be a defect within the meaning of section 536(1) sentence 1 of the German Civil Code, the restrictions in the Corona pandemic on the letting of a business premises for the operation of a retail business also constitute a defect; according to the leading sentence of the ruling.

NEW LAW PROVIDES PRESUMPTION OF DISTURBANCE OF THE BASIS OF THE CONTRACT

The legislator is now trying to counteract this legal uncertainty with a new law of 17.12.2020 (BT Drucksache 761/20):

Art. 240 EGBGB § 7
Disturbance of the Basis of Tenancy and Lease Agreements
(1) If, as a result of government measures to combat the COVID-19 pandemic, leased land or leased premises that are not residential pandemic are not usable for the tenant’s business or are usable only with considerable restrictions, it is it shall be presumed that a circumstance within the meaning of section 313, paragraph 1 of the Civil Code, which has become the basis of the tenancy agreement, has changed seriously after the conclusion of the agreement.
(2) Paragraph 1 shall apply mutatis mutandis to lease agreements.

According to the legislator’s justification, the new regulation is intended to relieve the following service providers in particular:

• Service businesses in the field of personal care – for example hairdressers, cosmetic studios and massage practices,
• Commercial overnight accommodation
• Retail shops
• Theatres, concert halls, cinemas and other cultural institutions
• Swimming pools and fitness studios
• Catering establishments as well as bars, clubs, discotheques, pubs and similar establishments
• Premises used for recreational purposes

On the one hand, the law is intended to eliminate the uncertainties that sometimes exist in practice. On the other hand, the negotiating position of commercial tenants is to be strengthened. The regulation should clarify that § 313 BGB (disturbance of the basis of the contract) applies in principle and thus appeals to the willingness of the contracting parties to negotiate. General and tenancy law warranty and structuring rights would continue to take precedence over section 313 BGB.

For cases in which a court decision is necessary, [with § 44 EGZPO] an accompanying procedural regulation is made to accelerate the court proceedings so that legal certainty can be achieved more quickly.

§ SECTION 44 EGZPO
Priority and acceleration requirement
(1) Proceedings concerning the adjustment of the rent or lease of land or premises other than residential premises because of government measures to combat the COVID 19 pandemic shall be given priority and expedited.
(2) In proceedings under subsection (1), an early first hearing shall be held not later than one month after service of the
of service of the statement of claim.

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Der Beitrag COMMERCIAL TENANCY LAW: TENANT’S OBLIGATION TO PAY RENT AND PANDEMIC-RELATED CLOSURES erschien zuerst auf JUR LAW.

Berlin’s housing market is changing. More and more rental apartments are being converted into condominiums. When it became necessary five years ago to have conversions to condominium ownership approved in milieu protection areas, where the composition of the residential population is to be preserved, the number of conversions dropped. In addition, the districts in turn secured a right of first refusal. These policy measures were intended to preserve Berlin’s tenant population and counter the threat of displacement from certain neighborhoods. After all, only when a building is subdivided into condominiums the individual apartments may be sold separately. The trend changed at the start of 2020. The Berlin Senate extended the conversion ordinance for 5 years at the beginning of February 2020. With the rent brake, the rent cap and the ban on misappropriation, the possibilities to make money with rental houses were limited. However, condo prices remain high.

BACKGROUND TO THE LEGISLATION

In addition to the Berlin Senate, the German government now also wants to make it more difficult to generally convert to condominiums in cities with tight housing. On November 4, 2020, the government passed a draft law on the mobilization of building land. This builds on the recommendations of the Building Land Commission and makes it easier for municipalities to provide building land. It is primarily concerned with the importance of housing construction and promoting the acceleration of housing construction. The coalition agreement stipulates that municipalities are to be supported in activating building land and securing affordable housing. To this end, the German government aims to further improve the construction planning law. In particular, the draft law is intended to expand the municipalities’ scope for action under construction planning law.

REGULATORY CONTENT OF THE CONSTRUCTION MOBILIZATION ACT AND PROHIBITION OF CONVERSION IN SECTION 250 OF THE GERMAN BUILDING CODE (BAUGB)

The main regulatory content of the Construction Mobilization Act includes the expansion of the exemption options and facilitation of construction in the inner and outer areas. With the “ban on conversion subject to approval” in § 250 BauGB, the draft also contains a proposal to reduce the possibilities of converting rental apartments into condominiums in the implementation of the resolutions of the Housing Summit. The regulation authorizes the state governments, limited until Dec. 31, 2025, to define by ordinance areas with a tight housing market in which conversion to condominiums requires approval. The list of cases in which approval for conversion would have to be granted is long. Even owners of multi-family buildings need a permit if they want to sell apartments individually.

EXCEPTIONS TO THE Ban ON CONVERSION TO Apartment OWNERSHIP USING THE EXAMPLE OF SECTION 172 IV 3 NO.2 OF THE GERMAN BUILDING CODE (BAUGB)

However, there are exceptions “to protect the legitimate interests of the owners” with which the ban on conversion can be “circumvented”. For example, according to § 172 IV p. 2 BauGB, approval must be granted if the owner cannot reasonably be expected to forego the conversion, even taking into account the general interest, if the property is to be sold to members of the owner’s family for the owner’s own use, or if the property belongs to an estate and condominium ownership or partial ownership is to be established for the benefit of co-heirs or legatees.

CRITICISM OF THE CONVERSION Ban

The prohibition of conversion is accepted in different ways. On the one hand, concerns are expressed: The law neither protects tenants nor solves the housing shortage. Conversion would not be in conflict with tenants’ interests, as they would often be able to obtain housing more cheaply than expensive new-build apartments. A strict ban on conversion would result in many people being discouraged from becoming homeowners. The conversion ban would make condominiums scarcer and more expensive. Rent increases are to be expected if fewer apartments are offered for rent due to the conversion ban.

On the other hand, the ban on conversion is welcomed: the conversion of rental apartments in tight housing markets is a major problem for long-established tenants, who would be forced out of their neighborhoods. According to the tenants’ association, the converted apartments would also mostly be luxuriously refurbished and resold at high prices.

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Der Beitrag New ban on conversion to apartment ownership erschien zuerst auf JUR LAW.

Berlin’s housing market is changing. More and more rental apartments are being converted into condominiums. When it became necessary five years ago to have conversions to condominium ownership approved in milieu protection areas, where the composition of the residential population is to be preserved, the number of conversions dropped. In addition, the districts in turn secured a right of first refusal. These policy measures were intended to preserve Berlin’s tenant population and counter the threat of displacement from certain neighborhoods. After all, only when a building is subdivided into condominiums the individual apartments may be sold separately. The trend changed at the start of 2020. The Berlin Senate extended the conversion ordinance for 5 years at the beginning of February 2020. With the rent brake, the rent cap and the ban on misappropriation, the possibilities to make money with rental houses were limited. However, condo prices remain high.

BACKGROUND TO THE LEGISLATION

In addition to the Berlin Senate, the German government now also wants to make it more difficult to generally convert to condominiums in cities with tight housing. On November 4, 2020, the government passed a draft law on the mobilization of building land. This builds on the recommendations of the Building Land Commission and makes it easier for municipalities to provide building land. It is primarily concerned with the importance of housing construction and promoting the acceleration of housing construction. The coalition agreement stipulates that municipalities are to be supported in activating building land and securing affordable housing. To this end, the German government aims to further improve the construction planning law. In particular, the draft law is intended to expand the municipalities’ scope for action under construction planning law.

REGULATORY CONTENT OF THE CONSTRUCTION MOBILIZATION ACT AND PROHIBITION OF CONVERSION IN SECTION 250 OF THE GERMAN BUILDING CODE (BAUGB)

The main regulatory content of the Construction Mobilization Act includes the expansion of the exemption options and facilitation of construction in the inner and outer areas. With the “ban on conversion subject to approval” in § 250 BauGB, the draft also contains a proposal to reduce the possibilities of converting rental apartments into condominiums in the implementation of the resolutions of the Housing Summit. The regulation authorizes the state governments, limited until Dec. 31, 2025, to define by ordinance areas with a tight housing market in which conversion to condominiums requires approval. The list of cases in which approval for conversion would have to be granted is long. Even owners of multi-family buildings need a permit if they want to sell apartments individually.

EXCEPTIONS TO THE Ban ON CONVERSION TO Apartment OWNERSHIP USING THE EXAMPLE OF SECTION 172 IV 3 NO.2 OF THE GERMAN BUILDING CODE (BAUGB)

However, there are exceptions “to protect the legitimate interests of the owners” with which the ban on conversion can be “circumvented”. For example, according to § 172 IV p. 2 BauGB, approval must be granted if the owner cannot reasonably be expected to forego the conversion, even taking into account the general interest, if the property is to be sold to members of the owner’s family for the owner’s own use, or if the property belongs to an estate and condominium ownership or partial ownership is to be established for the benefit of co-heirs or legatees.

CRITICISM OF THE CONVERSION Ban

The prohibition of conversion is accepted in different ways. On the one hand, concerns are expressed: The law neither protects tenants nor solves the housing shortage. Conversion would not be in conflict with tenants’ interests, as they would often be able to obtain housing more cheaply than expensive new-build apartments. A strict ban on conversion would result in many people being discouraged from becoming homeowners. The conversion ban would make condominiums scarcer and more expensive. Rent increases are to be expected if fewer apartments are offered for rent due to the conversion ban.

On the other hand, the ban on conversion is welcomed: the conversion of rental apartments in tight housing markets is a major problem for long-established tenants, who would be forced out of their neighborhoods. According to the tenants’ association, the converted apartments would also mostly be luxuriously refurbished and resold at high prices.

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Berlin’s housing market is changing. More and more rental apartments are being converted into condominiums. When it became necessary five years ago to have conversions to condominium ownership approved in milieu protection areas, where the composition of the residential population is to be preserved, the number of conversions dropped. In addition, the districts in turn secured a right of first refusal. These policy measures were intended to preserve Berlin’s tenant population and counter the threat of displacement from certain neighborhoods. After all, only when a building is subdivided into condominiums the individual apartments may be sold separately. The trend changed at the start of 2020. The Berlin Senate extended the conversion ordinance for 5 years at the beginning of February 2020. With the rent brake, the rent cap and the ban on misappropriation, the possibilities to make money with rental houses were limited. However, condo prices remain high.

BACKGROUND TO THE LEGISLATION

In addition to the Berlin Senate, the German government now also wants to make it more difficult to generally convert to condominiums in cities with tight housing. On November 4, 2020, the government passed a draft law on the mobilization of building land. This builds on the recommendations of the Building Land Commission and makes it easier for municipalities to provide building land. It is primarily concerned with the importance of housing construction and promoting the acceleration of housing construction. The coalition agreement stipulates that municipalities are to be supported in activating building land and securing affordable housing. To this end, the German government aims to further improve the construction planning law. In particular, the draft law is intended to expand the municipalities’ scope for action under construction planning law.

REGULATORY CONTENT OF THE CONSTRUCTION MOBILIZATION ACT AND PROHIBITION OF CONVERSION IN SECTION 250 OF THE GERMAN BUILDING CODE (BAUGB)

The main regulatory content of the Construction Mobilization Act includes the expansion of the exemption options and facilitation of construction in the inner and outer areas. With the “ban on conversion subject to approval” in § 250 BauGB, the draft also contains a proposal to reduce the possibilities of converting rental apartments into condominiums in the implementation of the resolutions of the Housing Summit. The regulation authorizes the state governments, limited until Dec. 31, 2025, to define by ordinance areas with a tight housing market in which conversion to condominiums requires approval. The list of cases in which approval for conversion would have to be granted is long. Even owners of multi-family buildings need a permit if they want to sell apartments individually.

EXCEPTIONS TO THE Ban ON CONVERSION TO Apartment OWNERSHIP USING THE EXAMPLE OF SECTION 172 IV 3 NO.2 OF THE GERMAN BUILDING CODE (BAUGB)

However, there are exceptions “to protect the legitimate interests of the owners” with which the ban on conversion can be “circumvented”. For example, according to § 172 IV p. 2 BauGB, approval must be granted if the owner cannot reasonably be expected to forego the conversion, even taking into account the general interest, if the property is to be sold to members of the owner’s family for the owner’s own use, or if the property belongs to an estate and condominium ownership or partial ownership is to be established for the benefit of co-heirs or legatees.

CRITICISM OF THE CONVERSION Ban

The prohibition of conversion is accepted in different ways. On the one hand, concerns are expressed: The law neither protects tenants nor solves the housing shortage. Conversion would not be in conflict with tenants’ interests, as they would often be able to obtain housing more cheaply than expensive new-build apartments. A strict ban on conversion would result in many people being discouraged from becoming homeowners. The conversion ban would make condominiums scarcer and more expensive. Rent increases are to be expected if fewer apartments are offered for rent due to the conversion ban.

On the other hand, the ban on conversion is welcomed: the conversion of rental apartments in tight housing markets is a major problem for long-established tenants, who would be forced out of their neighborhoods. According to the tenants’ association, the converted apartments would also mostly be luxuriously refurbished and resold at high prices.

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Der Beitrag New ban on conversion to apartment ownership erschien zuerst auf JUR LAW.

Berlin’s housing market is changing. More and more rental apartments are being converted into condominiums. When it became necessary five years ago to have conversions to condominium ownership approved in milieu protection areas, where the composition of the residential population is to be preserved, the number of conversions dropped. In addition, the districts in turn secured a right of first refusal. These policy measures were intended to preserve Berlin’s tenant population and counter the threat of displacement from certain neighborhoods. After all, only when a building is subdivided into condominiums the individual apartments may be sold separately. The trend changed at the start of 2020. The Berlin Senate extended the conversion ordinance for 5 years at the beginning of February 2020. With the rent brake, the rent cap and the ban on misappropriation, the possibilities to make money with rental houses were limited. However, condo prices remain high.

BACKGROUND TO THE LEGISLATION

In addition to the Berlin Senate, the German government now also wants to make it more difficult to generally convert to condominiums in cities with tight housing. On November 4, 2020, the government passed a draft law on the mobilization of building land. This builds on the recommendations of the Building Land Commission and makes it easier for municipalities to provide building land. It is primarily concerned with the importance of housing construction and promoting the acceleration of housing construction. The coalition agreement stipulates that municipalities are to be supported in activating building land and securing affordable housing. To this end, the German government aims to further improve the construction planning law. In particular, the draft law is intended to expand the municipalities’ scope for action under construction planning law.

REGULATORY CONTENT OF THE CONSTRUCTION MOBILIZATION ACT AND PROHIBITION OF CONVERSION IN SECTION 250 OF THE GERMAN BUILDING CODE (BAUGB)

The main regulatory content of the Construction Mobilization Act includes the expansion of the exemption options and facilitation of construction in the inner and outer areas. With the “ban on conversion subject to approval” in § 250 BauGB, the draft also contains a proposal to reduce the possibilities of converting rental apartments into condominiums in the implementation of the resolutions of the Housing Summit. The regulation authorizes the state governments, limited until Dec. 31, 2025, to define by ordinance areas with a tight housing market in which conversion to condominiums requires approval. The list of cases in which approval for conversion would have to be granted is long. Even owners of multi-family buildings need a permit if they want to sell apartments individually.

EXCEPTIONS TO THE Ban ON CONVERSION TO Apartment OWNERSHIP USING THE EXAMPLE OF SECTION 172 IV 3 NO.2 OF THE GERMAN BUILDING CODE (BAUGB)

However, there are exceptions “to protect the legitimate interests of the owners” with which the ban on conversion can be “circumvented”. For example, according to § 172 IV p. 2 BauGB, approval must be granted if the owner cannot reasonably be expected to forego the conversion, even taking into account the general interest, if the property is to be sold to members of the owner’s family for the owner’s own use, or if the property belongs to an estate and condominium ownership or partial ownership is to be established for the benefit of co-heirs or legatees.

CRITICISM OF THE CONVERSION Ban

The prohibition of conversion is accepted in different ways. On the one hand, concerns are expressed: The law neither protects tenants nor solves the housing shortage. Conversion would not be in conflict with tenants’ interests, as they would often be able to obtain housing more cheaply than expensive new-build apartments. A strict ban on conversion would result in many people being discouraged from becoming homeowners. The conversion ban would make condominiums scarcer and more expensive. Rent increases are to be expected if fewer apartments are offered for rent due to the conversion ban.

On the other hand, the ban on conversion is welcomed: the conversion of rental apartments in tight housing markets is a major problem for long-established tenants, who would be forced out of their neighborhoods. According to the tenants’ association, the converted apartments would also mostly be luxuriously refurbished and resold at high prices.

JUR | URBAN ADVISES OWNERS ON REAL ESTATE LAW AND CONDOMINIUM LAW. DO YOU HAVE ANY QUESTIONS?
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Der Beitrag New ban on conversion to apartment ownership erschien zuerst auf JUR LAW.

Someone acts unfairly if he or she fulfils one of the elements of §§ 4-7 UWG, which concretize the prohibition as well as the undefined legal concept of unfairness from § 3 I UWG. The legal consequence can be a claim for removal, injunction and damages as well as a claim for the return of the profit from §§ 8-10 UWG. In addition to the consumer protection regulations, the most important case groups of competitor protection are found in § 4 UWG. In particular in connection with the offences of insult of §§ 185 ff. StGB and insinuations in business transactions, the no. 1 and 2 of § 4 UWG are relevant in civil lawsuits.

§ 4 UWG: ACTING UNFAIRLY

“Unfair acts are those who disparages or denigrates the marks, goods, services, activities or personal or business relationships of a competitor
claims or disseminates facts about the goods, services or business of a competitor or about the entrepreneur or a member of the management of a competitor which are liable to damage the business of the enterprise or the credit of the entrepreneur, unless it is proved that the facts are true; if the information is confidential and the person making the communication or the recipient of the communication has a legitimate interest in it, the act is unfair only if the facts have been claimed or disseminated contrary to the truth;
(…).“

In what way may a business partner express himself to you? What are the civil-law consequences of an insult or an insinuation that criminal acts are being carried out between entrepreneurs?

B. SCOPE OF LEGAL PROTECTION UNDER § 4 NOS. 1 AND 2 OF THE UWG

The UWG is applicable if the unfairness of a business act according to § 3 I, II UWG in conjunction with § 2 I No. 1 UWG is given. In addition, the protection of competitors from § 4 No. 1 and 2 according to § 2 I No. 3 only applies if there is a concrete competitive relationship between the companies concerned which is affected by the respective business act.
An insult or imputation between competitors can therefore only be punishable under competition law if there is a concrete competitive relationship between the two entrepreneurs, the insult or imputation is a business act and there is a causality between the two elements, so that an impairment can be assumed.

I. § 4 NO. 1 UWG

§ Section 4 No. 1 UWG prohibits disparaging or disparaging business conduct towards a competitor with regard to his trade marks, goods, services, activities or personal or business relationships. This protects the competitive interest of the competitor – but not his private honour (OLG Brandenburg, judgement of 13.12.2016 – 6 U 76/15; BGH, judgement of 12.12.2013 – I ZR 131/12).
The reduction is the objectively unjustified reduction of the esteem of the competitor, his company or his services. The denigration is an increased form of reduction (OLG Hamm, judgement of 22.4.2010 – 4 U 226/09). The scope of protection includes expressions of opinion, but also implicit assertions and statements of fact (Statement of the Federal Government 2003 BT-Drucksache 15/1487, p. 18; LG Wuppertal, MD 2007, 321 f.). Factual statements are statements about facts or events that claim to be true to reality and whose accuracy can be objectively verified by gathering evidence (BGH, judgment of 14 May 2009 – I ZR 82/07). Legal or moral evaluations, on the other hand, are expressions of opinion (OLG Düsseldorf, judgment of 1.9.2009 – I-20 U 89/09).
In each individual case, an overall assessment of all circumstances is always decisive for the evaluation of a case. This is particularly important against the background of the conflicting fundamental rights of the persons concerned. The protection of the competitor results from the freedom of occupation and the general right of personality from article 12 GG and article 2 I GG in connection with article 1 GG and the right to objective criticism of the other person exists on the basis of the freedom of opinion and press freedom according to article 5 GG. As regularly anti-competitive the abusive criticism, the use of swear words as well as derogatory or unobjective flat-rate devaluations were classified (OLG Frankfurt, judgement of 27.3.2014 – 6 U 75/12; OLG Munich, judgement of 11.11.2010 – 29 U 2391/10).
In summary it can be said that § 4 No. 1 UWG protects against the impairment of the esteem in business transactions, which can be caused by true factual claims as well as expressions of opinion. It is therefore a prohibition against damage to reputation between entrepreneurs.

II. § 4 NO. 2 UWG

The scope of protection of Section 4 No. 2 UWG refers to the damaging assertion or dissemination of facts which are not demonstrably true and which relate to a member of management, a competitor or his goods, services or company. As far as confidential information is concerned, in which a legitimate interest exists, only untrue factual claims and their dissemination are prohibited.
An assertion is the making of one’s own statements of facts and the dissemination is the passing on of other people’s statements of facts (BGH, judgement of 23.2.1992 – I ZR 75/93). For not provably true facts a reversal of the burden of proof takes effect, so that the injuring party must prove the truth content of its statement (OLG Cologne, judgement of 23.8.2000 – 6 U 181/99). That means that he bears the risk that the truth cannot be proven.

The BGH has for example classified disqualifying terms like “plagiarism”, “imitation”, “illegality”, “fraud”, “sleight of hand” or “official fraud” as damaging factual claims (BGH, judgement of 17.11.1992 – VI ZR 344/91; judgement of 22.6.1982 – VI ZR 255/80; judgement of 12.1.1960 – I ZR 30/58).

The essential difference of § 4 No. 1 to 2 is that the defamatory nature of the statement towards the competitor does not play a role in No. 2, but rather a tendency to damage the company is much more important there (BGH, judgement of 7.2.1984 – VI ZR 193/82). No. 1 also includes the protection against expressions of opinion and true factual claims and is therefore further than No. 2. It is true that the two areas of protection complement each other and that the claims arising from them can exist side by side.

III. COMPETITION IN TORT LAW

In relation to general tort law, fairness law is considered a special tort law. This means that a violation of the UWG law does not necessarily constitute a general offence. Furthermore, regardless of whether a business act according to § 2 I No. 1 is involved, a claim for defense can exist from § 1004 BGB analogously in combination with § 824 BGB because of credit risk, § 826 BGB because of intentional immoral damage as well as § 823 II BGB in the case of violation of protective law in connection with the offences of insult of §§ 185 ff. StGB (BGH, judgement of 26.1.2017 – I ZR 217/15; OLG Cologne, 6.2.2013 – 6 U 127/12). A claim for culpable violation of the general right of personality from § 823 I BGB and right to a name from § 823 I, 12 BGB can only exist if no claim has arisen from § 4 I No. 1 and 2 UWG (OLG Schleswig, judgment dated 30.11.2016 – 6 U 39/15). An exception is the protection of the right to the established and exercised business enterprise according to § 823 I, which is subsidiary to the laws on competition (OLG Cologne, judgement of 4.9.2015 – 6 U 7/15).

C. OFFENCES OF INSULT OF THE §§ 185 FF. STGB

Since the offences of insult of §§ 185 ff. StGB play a major role in the context of the tortious claim for damages from § 823 II BGB as protective laws of civil law, their scope of protection must be considered.
A defamation according to § 187 StGB is to be assumed if the perpetrator claims an untrue fact against a third party via another person against his better knowledge, which is suitable to disparage this person or to disparage him in his public opinion as well as to endanger his credit. A slander according to § 186 StGB is already present if the alleged fact is not provably true in the essential points. An insult in the context of § 185 StGB is the catching offense of these three offences. According to case law, it is an unlawful attack on the honor of another person by intentional announcement of disregard. Honor is a legal right protected by fundamental rights and the inner and outer value of a person. It is therefore its dignity and validity within human society. The disregard or disrespect can be announced orally, in writing, physically or in any other way.
The punishability within the scope of the offences of insulting behaviour is therefore excluded if the object of a declaration is true, even if it is defamatory. Furthermore, expressions of opinion are generally permitted within the framework of §§ 185-187 StGB. It is not unlawful if the announcement is a rebuking judgement about scientific, artistic or commercial achievements, reprimands from superiors or official assessments, or the representation of legitimate interests according to § 193 StGB (Werner Raik, Creifeld’s dictionary of law, 24th edition 2020, Insult, 3.b)). However, formal insults are always punishable under § 192 StGB.
In summary, it can be said that the criminal offences of insulting behaviour only prohibit the disclosure of untrue factual statements. This means that their protective effect is incorporated into civil law, but a claim for damages under tort law exists only if a violation of legal rights has occurred through untrue factual assertions. This is similar to the protective effect of § 4 No. 2 UWG, since this primarily protects against untrue factual claims with a tendency to damage the company. In addition, there is, however, the protection according to § 4 No. 1 UWG, which also covers expressions of opinion and true factual claims, if these damage the competitor. Consequently, this competition law regulation is much stricter with regard to insults in business dealings. As a businessman or woman, statements towards competitors which may influence his competitive position must therefore be made with particular care.

D. IMPUTATION OF CRIMINALLY RELEVANT ACTS AGAINST COMPETITORS

It is questionable what effects the imputation of criminally relevant actions to competitors has. Some guiding principles in this respect result from case law:

“A factual statement in the sense of § 4 No. 8 UWG (old version) can be ruled out and a value judgement can be present, if a criminally relevant accusation is raised, which requires a complex legal assessment and in which the evaluative content of the statement overlaps a possible factual core (here: “I consider this to be organized white-collar crime, in which investors are deliberately ruined”). (BGH, judgement of 31.3.2016 – I ZR 160/14).
“1. expressions of opinion which also serve competitive purposes are – in continuation of BGH MMR 2012, 101 – to be assessed more strictly than those which are not subject to the requirements of fairness law. 2. if a competitor is accused of “trademark theft”, this indicates dubious business conduct and could induce the interested public to turn away from the competitor accused of trademark infringement or not to turn away at all. The prerequisites for a reduction within the meaning of § 4 No. 1 UWG are thus met. (OLG Frankfurt, judgement of 25.4.2019 – 16 U 148/18).
“The designation of the plaintiff’s website as an “illegal intermediary website” represents an expression of opinion. The accusation of illegality is generally to be regarded as a value judgment, unless it simultaneously evokes in the addressee the idea of concrete events that are covered by the judgment and are accessible to a review of evidence. The accusation of illegality is (…) here not placed in the concrete context of the objective debate (…). Rather, the accusation of illegality is expressed in an unspecified and general manner, so that it must give the addressee the impression of a moral evaluation rather than a verifiable fact. (…) The statement in dispute that the defendant operates an “unlawful intermediary website” is therefore unlawful according to §§ 3 para. 1 i. in connection with § 4 No. 7 UWG (old version) as an unfair competitive act. (LG Frankfurt, judgment dated 18.5.2011 – 2/ 06 O 85/10).
“Furthermore, the term “sham organic seal” implies, beyond the unfounded factual claim, an unnecessary devaluation and reduction of the plaintiff’s quality seal. Even if the quality seal were in no way to provide for stricter quality criteria than for conventional mineral water, this would be communicated in a more restrained manner than by using the term “sham”, which is reminiscent of deception and fraud. (LG Hamburg, judgement of 9.7.2019 – 406 HKO 22/19).
“Even statements that are correct in terms of valuation – a certain business model is legally doubtful – can constitute an impermissible reduction (within the scope of) § 4 No. 7 UWG (old version) – of a company if the party making the statement primarily pursues the goal of inducing advertising customers of the attacked company to place their advertising with the company of the party making the statement. (OLG Cologne, judgement v. 4.9.2015 – 6 U 7/15).

SUMMARY

In summary, the insinuations that a competitor is carrying out criminally relevant actions constitute expressions of opinion. They are distinguished from factual claims by means of the criterion that the allegation must be placed in a concrete context of a factual discussion. Value judgements or expressions of opinion are unspecific and general and give the impression of a moral evaluation rather than a verifiable fact. This means that imputations to competitors are generally covered by § 4 No. 1 UWG and are absolutely prohibited. If they represent a business act that impairs the competitiveness of the other entrepreneur, then claims for removal, injunction and damages against the injuring party arise. In addition, an incorrect factual claim can also be considered as a reduction – just like a true factual claim, if they are intended to damage the competitiveness of the competitor as a business act. It can therefore be concluded that insinuations and insults in business dealings are subject to strict punishment. Entrepreneurs may express objective criticism towards their competitors, but never with anti-competitive tendencies.

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