Guest contribution: rental moratorium and bankruptcy law in corona times. By Wilfried Stechow

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Updated 29.03.2020

Im Posted on March 27.03.2020, XNUMX the regulations on tenancy law in corona times have been set out on the basis of the laws passed by the Bundestag on March 25.03.2020th, XNUMX.

In addition, the following points should also be mentioned - also from the perspective of insolvency law:

1. Application moratorium

1.1. Scope of application

Contrary to the draft of the federal government published on March 20/21.3.2020, XNUMX, the final law has above all severely restricted the areas of application of the regulations in the moratorium, i.e. the right to refuse performance. If all debtors were originally entitled to refuse their services, this now only applies to consumers and micro-entrepreneurs.

a) Consumers

A person is a consumer whenever he concludes a legal transaction, the purposes of which can largely not be assigned to his commercial or independent professional activity (§ 13 BGB). It is not the person that matters, but the question of whether the legal transaction serves private or commercial / self-employed activities.

b) micro entrepreneurs

Micro-entrepreneurs are to be determined according to the EU guidelines using the following key data:

Screenshot 2020-03-29 to 13.30.09.png

The scope of the moratorium thus includes micro-entrepreneurs with max. 9 employees, whereby it should be noted that the limit values ​​have to take into account interrelationships with other companies.

The number of employees is given in annual work units (AWU). Everyone who has worked full-time in a company throughout the reporting year counts as one unit. For part-time employees, seasonal workers and people who have not worked all year, the respective share is to be counted towards the unit. Apprentices don't count.

c) What are landlords in this context?

The landlord can assert a refusal to perform as a consumer from § 1 (1) of the moratorium if he is also a consumer in this function. Since renting your own apartment is usually. Asset management and therefore part of the consumer term in § 13 BGB, this would have to be answered in the affirmative. The landlord becomes an entrepreneur within the meaning of Section 14 of the German Civil Code (BGB) if he conducts his asset management in the manner of a regular business operation with appropriate time and organizational effort (BGH NJW 2002, 368). In other words: Those who own and rent one or a few apartments remain consumers; those who own and manage a large number of apartments are entrepreneurs. Flat-rate demarcations are not possible here. The landlord of an apartment building usually remains a consumer.

As a consumer, the landlord can then assert a right to refuse performance in accordance with § 1 (1). If he is no longer a consumer, a right to refuse performance under Section 1 (2) could possibly be enforced as a micro-entrepreneur (then only for essential long-term obligations, which, however, should be largely identical to those mentioned above). The prerequisite would be that one wants to consider the landlord as an entrepreneur in the sense of recommendation 2003/361 / EG of the European Commission of May 6th 2003. So far, this has not been the case, which was also due to the lack of application of the legal consequences associated with the EU regulation (especially funding programs). The reason for the law does not say anything about this question, but this should be permissible with reference to the above distinctions of the BGB in §§ 13,14, although in these cases we have no balance sheets and therefore no balance sheet totals. However, the question must be described as currently open.

1.2. Legal consequence

The aforementioned groups, i.e. consumers and micro-entrepreneurs, can therefore refuse their services in relation to all essential long-term obligations.

Art. 240 EGBGB, § 1 (1) differentiates between essential long-term debt relationships according to whether they are consumers or micro-entrepreneurs: for consumers, the costs of covering the general interest must remain secured, for micro-entrepreneurs those that are used to cover services reasonable continuation of his business.

2. Loans

The regulations on credit relationships also do not apply to all loans, but only to consumer credit agreements that were concluded before March 15.03.2020, 3. According to Section 1 Paragraph XNUMX, the loan entitlements are deferred if the consumer is unable to reasonably be expected to pay the loan due to his own corona-related loss of income. This unreasonableness exists if the livelihood of the consumer would otherwise be endangered.

So whether the landlord, whose tenant ceases to make payments due to corona, can in turn suspend payment on his loans depends on whether he is a consumer himself (which he is based on the above considerations) and whether this will jeopardize his own cost of living. If he had also lost his current income from other activities, for example due to corona, this would probably be the case.

However, this regulation does not apply to micro-entrepreneurs; however, Section 3 (8) provides that a regulation can also extend the scope of this standard to micro-entrepreneurs, possibly even to small entrepreneurs.

3. Insolvency law regulations

3.1. Insolvency filing

The central rule in Article 1 § 1 of the COVInsAG is:

"The obligation to file for bankruptcy under Section 15a InsO and Section 42 (2) BGB is suspended until September 30, 2020. This does not apply if the bankruptcy is not due to the consequences of the spread of the SARS-CoV-2 (COVID-19 pandemic) or if there is no prospect of eliminating an existing insolvency. If the debtor was not insolvent on December 31, 2019, it is believed that the bankruptcy maturity is due to the effects of the COVID-19 pandemic. "

This means that the otherwise existing and criminally enforced duty to file for insolvency on time (applies to AG, GmbH, UG, but also to GmbH & Co KG, but not for sole proprietorships or partnerships such as a OHG or a KG with a natural person as full liability) for the Period suspended until September 30, 2020. This only does not apply if the bankruptcy maturity is not based on the consequences of the spread of the SARS-CoV-2 virus (Covid-19 pandemic), whereby the legislature has inserted a pleasant legal fiction according to which all companies operating on December 31, 2019 were not insolvent, it is presumed that the bankruptcy is due to the effects of the Covid-19 pandemic. So you only have to provide evidence that shows your solvency as of December 31.12.2019, XNUMX.

Furthermore, in order to apply the suspension of the application obligation, there must be prospects of eliminating existing insolvency. This could be difficult to prove, but here too the fiction applies that such a prospect exists for all companies that were solvent on December 31.12.2019, 1 (§ 3 sentence XNUMX COVInsAG).

In practice, every crisis company should create a liquidity status as of December 31.12.2019, 19, in order to be able to prove that a later insolvency situation is based on Covid-XNUMX, in order to temporarily avoid the obligation to apply with all its consequences.

COVInsAG primarily deals with the question of insolvency. However, it generally suspends the obligation to file for insolvency irrespective of the underlying reason for the insolvency, so that even in the case of an over-indebted company, the obligation to file an application should be suspended if it was solvent as of December 31.12.19, XNUMX.

It should be noted that bankruptcy filing applications are of course still permitted if the applicant is insolvent and / or over-indebted.

3.2. Section 64 GmbHG

At the same time, the very sharp liability for the managing director becomes effective from September 64th, from the date of insolvency maturity from § 30.9 GmbHG. suspended for payments made by the managing director in the ordinary course of business in the period in which insolvency is required under normal law.

However, this exception is subject to the proviso that the insolvency application pursuant to § 1 COVInsAG is actually suspended - for a company that was already insolvent on December 31.12.2019, 64, this does not apply according to the above statements, with the result that the managing director also applies to everyone further payments are liable according to § XNUMX GmbHG.

3.3. Disadvantage for creditors

The extensive risks associated with the granting / repayment of loans in times of crisis or comparable regulations, in particular also agreements on collateral, changes to collateral, but also changes in payment terms or granting payment facilities and payments by third parties on instructions from the debtor are described in Section 2 (1) No. 2-4 COVInsAG expressly presented as generally not contestable, specifically also for companies that are not subject to an application and also for those that are neither insolvent nor over-indebted.

This allows landlords and their tenants to make installment payments, etc. without having to fear later that such payments in the subsequent insolvency of the lessee will be challenged by the trustee.

4. Detailed questions

The questions raised by RA Scheidacker cannot currently be answered with certainty given the new legal situation.

4.1. The general rule:

a) The introduction of the moratorium leads to the debtor's right to refuse performance. He must assert this, so it does not automatically apply. Anyone who is unable to settle their obligations (especially payment obligations) from a long-term debt obligation due to corona must notify the contractual partner of this and at the same time justify it. It makes sense to do this in writing or in any case by email.

b) The civil law consequence is that the debtor is not in default (see also § 320 BGB) because he is entitled to refuse his performance (attention, this is different with the regulation on rent claims from § 2!). There is therefore no default interest and, for example, the attorney's costs are not borne by the debtor.

c) It only applies to long-term obligations that were concluded before March 08.03.2020, 310 and only to consumer contracts, i.e. those that were concluded between companies and consumers (Section 1 (XNUMX) BGB).

4.2 Details

a) private costs

  • Current supply costs of the debtor concerned are explicitly included, i.e. electricity and gas supplies, possibly water, etc. (if not included in the rent), telecommunication services etc.
  • The application to GEZ contributions is questionable because there is no contract here.
  • Contributions to insurance, including private or voluntary statutory contributions to your own health insurance, are expressly included in the regulation (whereby the legislator only mentions compulsory insurance here in its justification - BTDrucksache 19/18110). This should also apply to contributions to the pension fund or another professional pension scheme.
  • In view of the meaning of the law, other insurances may also fall under this, especially motor vehicle liability insurance (especially since this is a compulsory insurance), but also life insurance and the like.
  • Maintenance payments to relatives, on the other hand, are not included because they are not consumer contracts and, moreover, the maintenance of the debtor and dependents is to be ensured.
  • Whether current nursing home costs for the parents are also covered by this regulation is open - if they are privately concluded and agreed, yes, it is not a question of claims that the state asserts as an alternative.
  • In my opinion, school fees for children and childcare contributions should be refused if they do not (or cannot) deliver their services; otherwise, however, are also the permanent obligations from consumer contracts and are therefore subject to the moratorium.
  • One-off expenses, such as craftsman invoices, etc., definitely do not fall under the norm and have to be paid because it is not a permanent obligation.

b) object-related costs

The problem is whether a landlord can also refuse to pay for his rented apartment if the tenant stops paying his rent due to corona. This probably depends on the individual case.

If one wants to affirm the right to refuse performance, the question arises which could be affected:

  •  In principle, housing allowance payments to the WEG can also be discontinued, because these are also - essential - long-term obligations, unless the payment of the WEG could not be expected. This would be conceivable, because if several owners stop making payments, the WEG may no longer be able to meet its obligations itself and thus endanger the economic basis of its own business, which would preclude the application of the right to refuse performance (provided one sees one's own in a WEG Business operations). The WEG itself would have no right to refuse performance in accordance with the above legal requirements, unless it would be considered a small company, which was not the case in the previous areas of application of the SME definitions because there was no business activity of its own .
  • Supply contracts such as water, electricity, gas, heating, etc. fall under this.
  • The situation is difficult for insurance companies. Compulsory insurance is recorded for consumers and micro-entrepreneurs after the law was justified. The insurance would then be obliged to provide benefits in the event of a justified refusal to pay benefits, but there is fear that it will deny a right to refuse benefits and will therefore refuse benefits.
  • Long-term contracts such as pest control, house cleaning, garden maintenance are likely to be subject to the right to refuse performance if the owner has concluded it.
  • The moratorium does not apply to current taxes and duties such as property tax and street cleaning, possibly also waste disposal, because there is no contractual relationship here and taxes and contributions are based on public notices. However, special rights apply here, especially for taxes.
  • Loan interest and repayments are specifically regulated in § 3, see see above.

5. Use of your own assets?

One must think separately about the question of whether one's own assets must be used primarily, and if so, liquid or illiquid, or whether it is only the loss of income that matters. It should certainly arise at Adidas & Co.

The law itself does not relate to this, in any case the reasoning speaks of consumers in § 1 as for micro-entrepreneurs of lost income, but also that otherwise the cost of living would be endangered. If you have 100.000 euros in your current account, this should not be the case. However, it is unclear where the limit is and how far in the future the threat may be anticipated in view of the spreading economic uncertainty.

In tenancy law, neither the law nor the reasons give an indication of the assets to be used. Although the tenant has to prove that the non-payment is due to Corona, on the other hand he only has to make it credible, which in turn (according to the reasoning) is sufficient to make the closure of his shop credible. That should be the case with Adidas & Co. So, despite the Justice Minister's excited reaction, the companies may well be right here.

Wilfried Stechow
Attorney-at-law / graduate in finance
Artejura PartnG

Secretary Wilfried Stechow
Phone +49 (30) 833 06 33
Fax + 49 (30) 833 21 95
Kleiststrasse 23-26
10787 Berlin

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