Text Form Now Sufficient For Long-Term Commercial Leases In Germany

Fourth Bureaucracy Reduction Act (BEG IV) Entered Into Force Jan. 1, 2025

The Fourth Bureaucracy Reduction Act (BEG IV) took effect Jan. 1, 2025, introducing a major change for commercial leases. Compliance with the statutory written form pursuant to section 126 BGB of the German Civil Code (BGB) will no longer be required to meet the form requirement for long-term commercial lease agreements stipulated at section 550 BGB. Instead, compliance with the statutory text form pursuant to section 126b BGB will be sufficient. As a result, commercial leases with a fixed term of longer than one year will now only have to comply with the text form requirement.

As was previously the case, lease agreements concluded without complying with this form requirement will not be invalid. Rather, they will be deemed to have been concluded for an indefinite period and may be terminated after one year, complying with the statutory notice period for ordinary termination.