Liability for damages in the event of prohibited subletting of commercial property

The Higher Regional Court of Munich has decided that a tenant is obliged to pay damages to the landlord if the tenant can foresee the issuing of an eviction order against him and sublet in violation of the contract in order to prevent or complicate enforcement, whereby a personal liability of the managing director of a GmbH as a tenant can also be considered.

The owner of a house had concluded a lease agreement with a GmbH, which was to operate the rooms as a boarding house. Already after few months the GmbH was with the rent payments in the delay and was terminated. A lawsuit and also an eviction title against the tenant followed. Shortly before enforcement, the GmbH concluded a sublease agreement with a stock corporation. As a result the execution failed, only after some time the title could be extended and the eviction could take place.
The landlord considered the behaviour of the managing director, who was incidentally the same natural person as the supervisory board of the public limited company as subtenant, to be a considerable violation. It therefore demands not only from the GmbH as the tenant the rent arrears and compensation for the damage incurred, but also from the managing director personally.
Since insolvency proceedings have meanwhile been opened against the tenant's assets, the proceedings against her have been suspended. The judgement only concerned the claims against the managing director.

The OLG Munich sentenced the managing director to damages.

In the opinion of the Higher Regional Court, the conclusion of the sublease contract represents an immoral damage to the detriment of the landlord. The managing director is personally liable for an abuse of the corporate limitation of liability. When the tenancy agreement was concluded, the tenancy had already been terminated and the subletting had thus been unlawful. It was reprehensible because the eviction had already been initiated when the subletting agreement was concluded. Therefore, the managing director had to be held personally responsible for this action and had to pay a considerable part of the claimed damages.

The fact that the managing director had acted deliberately in order to cause further damage to the landlord had been particularly decisive here.


Source: Press release of DAV MietR 11/2019 v. 01.10.2019