More legal certainty in times of crisis

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Protection for tenants, interruptions to criminal proceedings may be extended More legal certainty in times of crisis

On Wednesday, the German Bundestag unanimously voted to adopt the bill proposed by the CDU/CSU and SPD to cushion the impacts of the coronavirus pandemic in civil law, insolvency law and criminal procedural law. For instance, tenants who are unable to keep up rental payments as a result of the spread of the coronavirus are to be protected from termination of their rental agreement. 

2 Min. Lesedauer

The spread of the coronavirus has led to drastic restrictions affecting every aspect of private and economic life in the Federal Republic of Germany – restrictions that would have seemed unthinkable only a few weeks ago. The German Bundestag has now passed legislation to cushion the impacts of the pandemic on the affected individuals, the economy and on courts and public prosecutors’ offices. All these regulations are to apply for a limited period of time and a return to the pre-existing legal provisions is guaranteed once the current exceptional situation no longer applies.

Regulations to protect domestic and commercial tenants

The legislation lays out regulations to protect domestic and commercial tenants as well as affected individuals with other long-term payment commitments. This includes restrictions on terminations of rental and lease agreements, regulations for deferral of payment and contractual modification in the law governing consumer loans as well as rights to withhold performance in the case of other long-term payment obligations. Specifically, the regulations apply, for instance, to essential supplies such as electricity, gas and telecommunications. This is designed to protect debtors, tenants and micro businesses that are unable to meet their payment commitments, or unable to do so on time as a result of the corona pandemic.

Suspension of the obligation to file for insolvency

It is to be made possible and easier for companies to continue to operate that are suffering economic difficulties or have become insolvent in the wake of the corona pandemic. To this end the obligation to file for insolvency in such cases will be suspended until 30 September 2020. Incentives are also to be put in place to help affected companies to operate economically again and to uphold their business relations. For a three-month transition period, the rights of creditors to request the opening of insolvency procedures are to be restricted.

Extending permissible interruption to criminal proceedings

For a limited period of one year, the period for which criminal proceedings may be interrupted has also been extended. This is to enable courts to interrupt trials for a maximum period of three months and ten days, where trials cannot be held as a result of measures to prevent the spread of coronavirus infections.

Other regulations

In the fields of cooperative law, company law, the law governing associations, foundations and the private ownership of apartments, as well as transformation law, provisions are to be eased. The aim is to enable the respective bodies to take necessary decisions and act in spite of ongoing restrictions on assembly. It is to be made easier to hold meetings using telecommunications. For a limited period, for instance, the annual general meetings of Aktiengesellschaften (public limited companies) may be held as virtual events without shareholders being present. For GmbH (private companies) it is to be easier to make decisions using written procedures. The proposed changes to the law governing the private ownership of apartments is to make it possible to dispense with annual meetings of owners for the meantime.