Corona Crisis and Lease Law in Germany

Hogan Lovells
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The Corona Crisis has hit the real estate market in general, but in particular it is impacting the retail and hospitality sectors. The scale and business relevance of the Corona Crisis is somehow unprecedented, and therefore there is little safe ground for the market players when it comes to the legal framework for their decision making. In commercial landlord and tenant law terms, the central question is whether the tenants' payment obligations remain unaffected or whether the tenants are entitled to reduce the rent or even stop payment altogether. The quick response of many retail and hospitality chains was to stop paying rent or to announce a rent payment stop for April and the following months. One may assume that in many cases this was more borne out of an urgent need to keep cash in the company or to level the field for negotiations, rather than based on the outcome of a detailed legal analysis. However, going forward the legal situation will become decisive where quick settlements cannot be found.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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