Commercial lease - a complete guide

Whether you are a shopkeeper, doctor or entrepreneur: Anyone who wants to run their own business will need their own premises sooner or later. As soon as the premises are not used for private living, a commercial lease agreement is concluded. Since there is no separate commercial lease law and freedom of contract applies, tenants and landlords should inform themselves in detail about the legal situation. The following article provides a detailed overview of the most important aspects of a commercial lease.  


  1. Commercial lease - definition and purpose of use 
  2. Form of a commercial lease
  3. Content of the commercial lease agreement 
  4. Agreement of the type of use 
  5. Term and termination options 
  6. Rent amount and operating costs
  7. Checklist for drawing up a commercial lease agreement

1. commercial lease - definition and purpose of use 

A commercial lease agreement applies when premises are used commercially, i.e. for business purposes. The provisions are largely regulated in sections §§535ff and §580a of the German Civil Code (BGB), which cover general tenancy law. 

Commercial premises can be, for example, stores, medical offices, offices, restaurants or warehouses. 

In contrast to the private lease contract, the contracting parties are equal under commercial law; accordingly, the paragraphs protecting the tenant as opposed to the landlord do not apply. There is much more room for negotiation and freedom when drafting the contract: For example, there is no prescribed formal requirement for leases of less than one year. From this point of view, the entire drafting of the lease depends on the contracting parties.

Landlord and tenant can be: 

2. form of a commercial lease agreement 

As already mentioned, the written form is not mandatory for commercial leases, however, provided that the lease term is less than one year . If the rental period exceeds one year, the contract must be concluded in writing, see BGB §550.

In general, however, a written contract is recommended even for a short rental period so that disputes cannot arise in the first place. 

3. content of the commercial lease agreement 

The content of rental agreements is often specified by the landlord. Nevertheless, tenants can also contribute suggestions for wording and content.  

As free as the landlord is in the drafting of the commercial lease agreement, the drafting of the agreement is subject to Section 307 of the German Civil Code (BGB ) and thus to content control. Content control means that no party may be "unreasonably disadvantaged" and all clauses must be formulated "clearly and understandably". 

In contrast, the contract may be concluded on the basis of joint negotiations between the landlord and the tenant. §Section 307 of the German Civil Code (BGB) then does not apply, provided that the content was not specified by the landlord and the principles of good morals (Section 138 of the German Civil Code (BGB)) and good faith (Section 242 of the German Civil Code (BGB)) are taken into account accordingly. 

Tip: In order to be on the safe side legally, it is advisable to consult a specialist lawyer for individual agreements. 

The following content points are important for both tenants and landlords: 

4. agreement of the purpose of the lease 

The exact wording of the rental purpose or intended use is very important for tenants, especially if the activity requires a permit. For example, a restaurant permit must be available for operating a restaurant in the commercial premises. 

It is the responsibility of the tenant to obtain the appropriate permits and authorizations for the operation of his business from the authorities. 

The landlord has the responsibility to comply with the agreed purpose of use . In the case of a restaurant, for example, this means complying with building regulations or hygiene regulations. The landlord is liable at all times for the suitability of the leased property. This cannot be excluded by a corresponding clause in the rental agreement. 

The exact formulation of the purpose of use is also advantageous for the landlord: if the formulation is too general, the tenant can change his purpose of use on his own. The landlord then cannot and may not prevent this, but is still responsible for providing the premises to be used properly. 

5. term and termination options 

There are no statutory provisions for the term. Here, the lease can be concluded either for a fixed term or for an indefinite term. In the event that a fixed-term lease is to be extended, there is no need for action: the contract is tacitly extended in accordance with Section 545 of the German Civil Code (BGB ). 

If the tenant continues to use the property after the expiry of the rental period, the fixed-term contract automatically becomes an indefinite contract, unless one of the contracting parties objects to this within two weeks

Option clause for fixed-term commercial leases

In practice, most fixed-term commercial leases have a term of at least five years. Provided that business is good, the tenant finds himself in an unfavorable situation after the contract expires, because moving is particularly unfavorable for doctors or restaurants, for example. To prevent landlords from exploiting this situation by offering unfair terms, there is the option of agreeing an option clause in advance.  

Good to know: The option clause gives the tenant the right to extend the contract unilaterally. 


Termination options 

In the case of fixed-term contracts, the lease generally ends upon expiration of the agreed lease term without the need for a corresponding notice of termination, unless an option clause has been agreed. 

An indefinite contract may be terminated depending on the individual agreement of the notice periods. If no notice periods have been agreed, the statutory notice periods apply: 

Legal notice period: 

Pursuant to Section 580a of the German Civil Code (BGB ), the statutory period of notice is 6 months, provided that the notice of termination was served no later than the 3rd working day of the quarter. Otherwise, it is extended to 9 months

Important to know: For commercial leases, Saturday also counts as a working day

Extraordinary termination: 

In addition, there is the option of extraordinary termination for both fixed-term and permanent contracts. 

This is usually possible in the following cases in particular: 

  • Legal: Important reasons that allow an extraordinary termination by law can be disturbance of domestic peace, unauthorized subletting, serious breaches of contract and much more. 
  • Contractual: reasons contractually agreed in advance, for example insolvency 

In practice, in the case of minor violations, the other party is given the opportunity to change its behavior by means of a warning before extraordinary termination occurs. 


Special termination rights: 

In addition, there are special termination rights that can lead to premature termination of the lease. These special termination rights apply in the following cases: 


  • In the event of the tenant's insolvency, the insolvency administrator may terminate the lease with three months' notice to the end of the month
  • In the event of the insolvency of the landlord, the new owner shall have a special right of termination subject to the statutory notice period in the event of the sale of the premises by the insolvency administrator. 

Refusal to sublet: 

If subletting is not expressly excluded in the lease agreement, the tenant may exercise his special right of termination in the event of refusal on the part of the landlord. 

Modernization measures: 

In the event that the landlord wishes to carry out a modernization of the business premises, the tenant may give extraordinary notice of termination, provided that it concerns measures that significantly affect the leased premises. The landlord has a duty of notification and must inform the tenant three months before the start of the planned work. 

Death of a tenant:

  • If the tenant dies, both heirs and the landlord may terminate the tenancy extraordinarily in compliance with the statutory notice period. (§ 564 BGB) 
  • If there are several tenants,the heir can terminate the lease together with the other tenants in accordance with § 563a of the German Civil Code (BGB), also subject to the statutory period of notice. The landlord has no special right of termination in this constellation. 


In the event of a foreclosure sale, the new purchaser also has the right to terminate the contract on the first possible termination date after acceptance of the bid, irrespective of whether the contract is for a limited or unlimited period. If the new purchaser does not terminate the contract on the first possible date, the special right of termination expires. 

6. amount of rent and operating costs

The amount of the rent is usually agreed individually. There are no legal restrictions, such as a local rent index. The rent that the landlord can demand depends on the property, the location and the comparative rents

In the rarest cases, there is still a fixed-price rent. As a rule, landlords charge index or graduated rents. In the case of index-linked rents, the landlord can increase the rent accordingly in line with the consumer price index. In the case of a graduated rent, the rent increases annually by the corresponding contractually agreed amount. 

Incidental expenses

There is also freedom of design with regard to ancillary costs. In practice, however, the ancillary costs, similar to those in residential leases, are calculated on a pro rata basis from the classic operating costs such as garbage collection, janitorial services, and consumption-dependent water and heating costs. 

For tenants, it is essential to clarify in advance whether there are any other additional costs, such as security services or the like. 

Rental deposit

There is also no legal basis for the rental security or deposit. The amount is freely negotiable and, depending on the sector and the duration of the tenancy, it may well be more than three months' rent. 

Perhaps also interesting: A detailed checklist for commercial leases


The contents of this article are for information purposes only. It is not legal advice and no liability is accepted for the contents.

Sebastian Wengryn

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