The Bureaucracy Relief Act IV (BEG IV) will enter into force on January 1, 2025, and brings a significant change for commercial lease agreements.
Commercial lease agreements with a term of more than one year are currently subject to the strict written form requirement pursuant to Section 550 of the German Civil Code (BGB). If this is not complied with, the lease agreement is automatically deemed to have been concluded for an indefinite period and can be terminated prematurely despite the agreed fixed term.
However, significant changes are ahead. While the written form requirement for residential lease agreements remains unchanged, commercial lease agreements will only require text form in the future. This change simplifies and accelerates the conclusion of contracts, as agreements can now be finalized via email or other text-based formats without physical signatures.
Transitional arrangement for existing contracts
The new text form requirement applies not only to commercial lease agreements concluded after the introduction of the BEG IV, but also takes effect for existing contracts. To facilitate the transition, the law provides for a 12-month transitional period during which the current written form requirement continues to apply. This transitional period ends on December 31, 2025. After this date, existing commercial lease agreements can no longer be terminated due to a violation of the written form, but only for a violation of the text form. It is therefore crucial to review existing contracts for any violations of the written form and, if termination is being considered, to act in good time before the transitional period expires.
What should you do now?
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For new lease agreements: Prepare to adapt your processes to the new text form requirements, which simplify and modernize the conclusion of commercial lease agreements.
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For existing lease agreements: Review your existing contracts for potential violations of the written form. If termination is being considered, you should act in good time within the transitional period.
The transition to text form is a welcome modernization that takes increasing digitalization into account. However, companies should take proactive measures to ensure compliance with the new regulations and to safeguard their rights in existing contracts.
If you require support in implementing these changes or in reviewing your lease agreements, our team will be happy to assist you.
