Miet- und Pachtrecht: Allocation of Facility Management Costs in Smallprint Leases Not Unlawful

Commercial leases in Germany usually feature a long list of operating charges (Betriebskosten) to be shared by the tenants as part of their monthly down payments and annual charges accounts. While some positions on this list, such as electricity for lighting shared spaces or cleaning of lobbies and staircases, are pretty obvious and transparent, others sometimes border on the surprising and unclear. Objections to this effect have especially been raised when costs of the latter category are contained in Allgemeine Geschäftsbedingungen, i.e. smallprint lease conditions for multiple use, instead of individually negotiated leases. One position particularly under attack were the "costs of commercial and technical facility management", often specified only by a flat (and fat) percentage of the gross annual rent. Arguably, virtually any of the facility managers' activities may go under this header, including, but not limited to, the cost of running the landlord's own tenancy business operation.

However, in a judgment of 9 December 2009 (file ref. XII ZR 109/08) only recently published, the Bundesgerichtshof (Federal Supreme Court) held that allocating this type of cost to tenants was by no means so unusual as to have to be deemed surprising to commercial tenants, even when the position was contained in business smallprint type leases. There was no need to specify the relevant costs in advance, and tenants were sufficiently protected against misuse by the prevailing general principle of cost-effectiveness which obligates landlords to hold tenants free from the allocation of unnecessary costs. Also, the Court saw no infringement of the principle of transparency. The judges held that the term "costs of commercial and technical facility management" reflected existing wording in the Ordinance on Operating Costs (Betriebskostenverordnung) and preceding legal instruments.

The Court's decision takes up a general tendency in …