Friday February 12, 2021
Court judgment in Munich
C&A has to pay the rent including interest
In the first lockdown, several retail chains withheld or cut the rent. Including a C&A branch in Munich. However, the district court now gives the landlord right, so that the fashion chain has to pay for April 2020. The judges speak of an individual decision.
The fashion department store C&A suffered a defeat in the dispute over rent withheld in the Corona crisis. The Munich district court agreed with the complaining landlord of a branch in downtown Munich. C&A should now pay the rent for April plus interest. C&A had cited the corona-related closings in order to refuse the rent. During this time, the rooms were not suitable for running a textile department store, which represented a defect in the rental property, the company now argued in court.
The fact that a shop is accessible to the public is a basic condition for leasing to retailers. This usability risk affects the landlord. The landlord had argued against it that there was no material defect. The judge came to the same conclusion. The use risk cannot be passed on to the landlord, according to his decision. The judge also did not see an adjustment of the lease as mandatory. For this, the rent payment for C&A should have been unreasonable, which the court denied.
It is reasonable for the company to build up a reserve of one month's rent "in general and also on the basis of the results from the previous three financial years". The court did not say how much the retained monthly rent was. However, the amount in dispute, which was around one million euros, provides a clue.
H&M and Deichmann also cut rent during lockdown
The verdict is not yet legally binding. In addition, the court emphasized that it was an individual decision. In addition to C&A, several other retail chains stopped or cut rental payments during the first Corona wave, including the shoe retail chain Deichmann and the H&M boutiques.
Landlords protested sharply against it. The federal government gave the impetus to stop rents with its first rescue package. Among other things, it stated that pandemic-related rental suspensions in the period from April to June did not constitute grounds for termination.
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