Required Disclosures and Notices for Commercial Landlords

Commercial landlords in Hesse have a duty of disclosure regarding the physical and legal state of the property. Since its commencement on 1 January 1900, the German Civil Code (Bürgerliches Gesetzbuch – BGB) has established the foundation for pre-contractual duties. This was further augmented by the Building Energy Act (GEG), effective since 1 November 2020. Failing to provide accurate information on energy performance or zoning can lead to costly litigation and lease termination.

Although commercial tenancy law in Hesse is largely governed by freedom of contract, several statutory disclosure obligations still apply. These arise from energy law, contract law, and industry-specific regulations.

Key Disclosure Obligations

1. Energy Certificate

Applies to Commercial

Properties The energy certificate obligation applies to commercial properties in Hesse as well.

When leasing, the landlord must:

• Present the certificate at the latest during viewings (GEG § 80 (2))
• Include energy performance data in property listings (certificate type, energy demand/consumption, year of construction, heating system)
• Provide a copy immediately (unverzüglich) after the contract is concluded (GEG § 80 (4))

Fines

Violations carry fines of up to €10,000 (GEG § 108 (2)).

2. Pre-Contractual Disclosure Duties

Despite contractual freedom, landlords have extensive pre-contractual disclosure obligations derived from BGB § 311 (2) (culpa in contrahendo) and the principle of good faith (BGB § 242). Furthermore, under BGB § 536d, any agreement excluding or limiting the landlord's liability for defects is void if the landlord has maliciously concealed the defect.

Property Defects

The landlord must inform prospective tenants about material defects relevant to the intended use:

• Known moisture or mold issues
• Structural problems or construction defects
• Hazardous materials (e.g., asbestos in older buildings)

Contamination and Environmental Issues

For properties with known or suspected soil contamination, there is a heightened disclosure duty.

Concealing such issues can entitle the tenant to rescind the contract and claim damages.

Public Law Restrictions The landlord should disclose known restrictions:

• Zoning regulations that limit the intended use
• Heritage protection requirements for historic buildings
• Planned construction in the surrounding area (if known)
• Missing permits for the intended commercial use

3. Operating Cost Transparency

Contractual Basis

Unlike residential law, there is no mandatory statutory framework for commercial operating cost pass-through.

The allocation is governed by the lease agreement:

• Recoverable costs must be individually listed or defined by reference to the Operating Costs Ordinance (BetrKV § 2)
• In commercial leases, management fees, center management, and expanded insurance can also be recovered
• The billing period and deadline should be contractually specified

Transparency Requirement Operating cost statements must be comprehensible.

The tenant has a right to inspect original receipts.

4. VAT Option (Umsatzsteueroptierung)

Under UStG § 4 Nr. 12 (a), the letting and leasing of real estate is generally exempt from VAT. However, the landlord may opt for VAT taxation (Umsatzsteueroption) under UStG § 9 (1) if the lease is to another entrepreneur for their business. This option must be clearly communicated. The lease should include clear VAT provisions, as changes in the tenant's tax status can create a retrospective VAT correction risk for the landlord.

5. Fire Safety

Under the Hessian Building Code (Hessische Bauordnung – HBO § 14 (1)), buildings must be designed, constructed, and maintained to prevent the start and spread of fire and smoke, ensuring the safety of occupants and effective firefighting. Landlords should disclose:

• Existing fire protection equipment (extinguishers, sprinklers, smoke detectors)
• Escape and rescue routes
• Current fire safety certificate - especially for hospitality or industrial use

Best Practices for Landlords

1. Present the energy certificate proactively during marketing
2. Document pre-contractual disclosures in writing
3. Check contamination registers - especially for commercial sites in the Rhine-Main area
4. Detail the operating cost allocation clearly in the lease
5. Clarify the VAT option upfront and review it periodically

Landager helps you manage all disclosure obligations for your commercial properties in Hesse with structured workflows and deadline reminders.

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