Text form requirement for long-term commercial leases! And now?

Since January 1, 2025, text form has been required for commercial leases concluded after this date that are concluded for longer than one year. In the event of non-compliance, the rental agreement has an indefinite term and thus the possibility of ordinary termination within the statutory notice periods, at the earliest at the end of one year after the rental object has been handed over, even if the contracting parties had agreed a longer fixed term excluding the possibility of ordinary termination

While the legal consequences of breaches of the previously applicable written form have thus remained unchanged, there are still unresolved questions regarding the drafting of contracts, in particular with regard to the requirements of text form and the transferability of the previously applicable supreme court rulings on breaches of written form.

Differences between text and written form

In contrast to the written form, the text form requires (only) three things: a legible declaration on a durable medium, the naming of the person making the declaration and the recognizability of the conclusion of the declaration.

While the written form requires a personally signed document, a suitable data carrier, e. g. in the form of email, SMS/messenger services, memory card or fax, is sufficient for the text form. In future, the contracting parties will no longer have to worry about the physically fixed connection required for a deed by means of a binding, eyelet or cord and seal.

However, the question of how the assignment of annexes to the main contract text can be ensured in future is currently still unanswered. The literature assumes that the legislator intended to make things easier by switching to text form and therefore the same strict standards as for written form cannot apply (Kranzkowski, MietRB 2024, 367 (369)). In case of doubt, the contracting parties are advised to process the main agreement and annexes in one file or at least to ensure that the annexes make sufficient reference to the main agreement – as was previously the case.

With the move away from the written form, the requirement for a handwritten signature no longer applies. The circulation of signatures, which is predominantly perceived as bureaucratic and – depending on the location of the signatories – logistically time-consuming, is no longer necessary with the text form.

It is currently still unclear whether representative relationships of the contracting parties must continue to be identified within the declaration in text form. As the text form requires the person making the declaration to be named, there is much to be said for expressly identifying representatives as such in future as well (Kranzkowski, MietRB 2024, 367 (370)).

The text form also means that contracts are concluded and amended more quickly and perhaps even unconsciously, for example through the mere exchange of emails. It is therefore advisable to include disclaimers in emails in order to avoid unwanted explanatory content.

Since the text form refers to a contract, the prevailing view is that both declarations of intent required to conclude the contract must satisfy the text form requirement (see Messerschmidt/Voit/Lenkeit, 4th ed. 2022, BGB Section 650i marginal no. 33).

Supplements and additions

The text form that has been in force since January 1, 2025 also applies to addenda and supplementary agreements to existing tenancy agreements concluded after this date. In principle, it is irrelevant whether the already concluded tenancy agreement itself was still subject to the written form requirement.

Up to now, addenda – if they wanted to comply with the written form – had to at least ensure a complete reference to all previous rental agreements according to the BGH's relaxation case law; in particular, they had to refer to the rental agreement itself and all addenda concluded up to that point (BGH, judgment of 09.04.2008 - XII ZR 89/06 = NZM 2008, 484; judgment of 26.02.2020 - XII ZR 51/19 = NZM 2020, 429). Whether this reference also applies to addenda and supplementary agreements that are subject to the text form is still open (in contrast, Kranzkowski, MietRB 2024, 367 (371))

Since it is generally accepted that the purpose of the form requires that the parties involved can reliably inform themselves about the content of the declaration, the meaning and purpose of the text form speak in favor of transferring the principle of uniformity. If the entire content of the contract did not have to be contained in a declaration, this could not be guaranteed. Pending clarification by the supreme court, tenants should therefore be advised as a precautionary measure to ensure that sufficient reference is made to the tenancy agreement and any addenda concluded to date, e. g. in the subject or introductory part of an email.

Written form clauses

The parties are at liberty to contractually agree a stricter form than the text form (Section 127 (1) BGB). However, if the parties wish to return to the usual written form by contractual agreement and in a supposedly simple way, they must note that in the event of breaches of the (now contractual) written form, the previous legal consequence of the indefinite term and the possibility of ordinary termination does not apply, but rather, according to Section 125 sentence 2 BGB – at least without further provisions – nullity regularly applies.

The legal agreement of the written form or a form stricter than the text form does not change the fact that a subsequent form-free individual agreement can cancel the form agreed in the form contract.

Cure clauses

Whether cure clauses will experience an unexpected renaissance as a result of the new form requirement is currently being discussed in the literature. In 2017, the Federal Court of Justice rejected the validity of regularly agreed written form cure clauses (BGH, Urt. v. 27.09.2017 - XII ZR 114/16 = NZM 2018, 38). The Federal Court of Justice justified this primarily by stating that written form clauses are incompatible with the indispensable provision of Section 550 BGB and are therefore invalid.

Whether these considerations also apply to text form cure clauses, which are now obvious, is at least questionable. With reference to the explanatory memorandum to the law, according to which the weakening of the formal requirements to text form is no longer able to guarantee the protective purpose of Section 550 BGB between the original contracting parties, it can be well argued that text form cure clauses with the restriction that they do not bind a property purchaser can (again) be effectively agreed (Neumann, NZM 2024, 931 (932)).

There should at least be agreement that the agreement of text form cure clauses, insofar as these are drafted as independent provisions separate from the rest of the contract text, should not have any negative effects. In the worst case, they are ineffective in line with the case law on clauses curing written form.

Transition period for old contracts

During a transitional period of twelve months after the new regulation comes into force, tenancies concluded before January 1, 2025 can still be terminated due to a breach of the written form. After the end of the transition period, premature ordinary termination requires a breach of the written form. It remains to be seen whether the fear sometimes expressed in practice that a wave of terminations of tenancies that have become unpleasant due to breaches of the written form will follow in 2025 (Hofele, NZM 2024, 363 (371)).

Conclusion

The change from written to text form simplifies many things at first glance; however, it also presents landlords and tenants with new challenges that now need to be regulated in tenancy agreements.

Contracts can be concluded and amended unintentionally in day-to-day business transactions. In order to prevent this, appropriate awareness must be created and suitable measures taken. The parties are free to continue to contractually agree on the written form. However, in the event of breaches, appropriate provisions should be made for dealing with these breaches

The inclusion of text form cure clauses in rental agreements should certainly make sense. Whether such clauses can be effectively agreed, at least as long as they do not bind a property purchaser, is still unclear. Invalidity would at best mean that the parties could not invoke them

It remains to be seen to what extent the case law on the written form pursuant to Section 550 BGB can be applied to the text form. This is still largely unclear, which is why the principles established to date regarding written form can at best serve as a guide.