Commercial Tenancy Law in Lower Saxony: A Comprehensive Guide

Commercial tenancy law in Lower Saxony and throughout Germany differs fundamentally from residential tenancy law. Governed primarily by the German Civil Code (Bürgerliches Gesetzbuch - BGB), which came into effect on 1 January 1900, the principle of freedom of contract applies to commercial properties (offices, retail, gastronomy, warehouses). While residential tenants are extensively protected, commercial landlords and tenants interact at "eye level" as business partners.

Legal DisclaimerThis guide provides general legal information. Lease laws can change. Always consult a licensed notary or lawyer in this region.

Key Regulations at a Glance

Contract Design and Written Form

Freedom of contract allows landlords to pass almost all risks on to the commercial tenant. A element, however, is the written form (§ 550 BGB): If a commercial lease agreement is concluded for a fixed term longer than one year (e.g., a 5-year contract), it is mandatory that it be set down in writing in its entirety and without gaps (including all addenda, appendices, and sketches).

If this formal requirement ("Schriftformerfordernis") is violated, the contract is legally deemed to be "concluded for an indefinite period." The tenant could then terminate at any time with statutory notice (6 months) despite the fixed term.

Read our guide on Commercial Lease AgreementsPreview unavailable.

Security Deposit

Unlike residential property, there is no statutory upper limit of three net cold rents for commercial property. Landlords in Lower Saxony can (and should) demand much higher deposits (often 6 months or more) to cover default risks and dismantling costs. The obligation to invest in an interest-bearing escrow account also does not apply in the absence of a statutory provision, provided the contract does not stipulate otherwise. While landlords typically have 3 to 6 months to inspect the property and settle claims, this period can extend up to 12 months for commercial tenancies if final utility bill settlements are pending. Furthermore, a recent BGH ruling (July 10, 2024, Case No. VIII ZR 184/23) clarified that landlords can still offset damage claims against the security deposit even after the 6-month limitation period for such claims has expired, provided the claim existed and could have been offset before that period ended (§ 215 BGB).

We explain the details in the article on Commercial Security DepositsPreview unavailable.

Rent Increases and Value Securing

Strict rules such as the rent brake or the cap from residential areas do not exist in the commercial sector. Instead of pointing to local comparative rents, landlords generally secure their returns through value-securing clauses or index-linked lease agreements regulated by the Price Clause Act (Preisklauselgesetz - PrKG). This means the rent automatically rises in parallel with the inflation rate (Consumer Price Index).

You can find more information in our guide on Commercial Rent IncreasesPreview unavailable.

Maintenance and NNN Leases

According to the German model of the BGB, the landlord is actually obliged to maintain "roof and structure" (structural framework, roof, external walls). In commercial tenancy law in Lower Saxony, however, the international trend to transfer all maintenance and repair costs to the tenant has been adapted. Such "Double Net" or "Triple Net" (NNN) regulations are partially permissible subject to terms and conditions controls.

Details on this in the article Commercial MaintenancePreview unavailable.

Eviction and Termination

There is no special tenant protection in the event of termination. If the contract is open-ended, landlords can terminate it without giving reasons (e.g., without personal need) with the statutory notice period. The period for business premises according to § 580a BGB is usually at the latest on the 3rd working day of a calendar quarter to the end of the next calendar quarter (effectively almost six months).

Information on termination without notice and eviction in the event of default of payment is available in the article Commercial Eviction ProcessPreview unavailable.

Duty to Operate and Protection Against Competition

In the case of shops and shopping centers, a contractual duty to operate (Betriebspflicht - duty to keep the shop open at certain times) is often agreed upon. In return, the case law grants the tenant an unwritten, contract-inherent protection against competition: The landlord may not lease the same business (main assortment) to another tenant in the same building or shopping center to protect the first tenant from ruin.

Managing Commercial Properties with Landager

Managing commercial units requires meticulous monitoring of payments (such as value-securing claims) and precise deadline control to avoid formal written defects. Use Landager to automatically adjust index-linked rents and to monitor expiring options of your commercial tenants in Lower Saxony in good time.

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