Commercial Leases in Text Form: What Changed in 2025

What changed for commercial leases

For decades, commercial leases in Germany with a term of more than one year had to be concluded in written form (Schriftform). If they were not, they were deemed concluded for an indefinite period and could be terminated with the statutory notice period, regardless of the agreed fixed term. Because the courts required that all essential terms – parties, premises, rent, term – be contained in a document signed by both parties, including later amendments, many leases had hidden formal defects. Parties wanting to leave a lease early, or to renegotiate rent, searched for such defects and used them as leverage.

The Fourth Bureaucracy Relief Act (Viertes Bürokratieentlastungsgesetz, BEG IV) changed the rule for commercial leases with effect from 1 January 2025. § 578(1) sentence 2 BGB now provides that § 550 BGB applies with the proviso that a lease concluded for longer than one year that is not in text form (Textform) is deemed concluded for an indefinite period. The rule applies to leases of land and, through § 578(2) BGB, of premises that are not residential – offices, retail, logistics, hotels and other commercial premises. Residential leases remain subject to written form under § 550 BGB.

This article explains what text form means, how the transitional rule worked, which disputes are ending and what landlords and tenants of commercial leases should still watch in 2026.

Text form explained

Under § 126b BGB, text form requires a readable declaration in which the person making it is named, given on a durable medium. A durable medium is any medium that allows the recipient to store or save a declaration addressed to them personally, so that it remains accessible for a period appropriate to its purpose, and that is suitable for reproducing the declaration unchanged.

In practice, this means:

• an exchange of emails, PDF documents or scanned signed copies can satisfy text form;
• no handwritten or qualified electronic signature is required;
• the declaring party must be named, so anonymous or unattributed communications are insufficient;
• a website text that can be changed by the provider is generally not a durable medium unless it is provided to the recipient in a storable form.

What has not changed is the substantive requirement: the essential terms of the lease must be documented in the required form. Text form makes compliance easier, but a lease whose material terms are scattered across informal emails and oral agreements can still fail to meet it.

The transitional rule for existing commercial leases

Commercial leases created before 1 January 2025 were covered by a transitional provision. Under Article 229 § 70(1) of the Introductory Act to the Civil Code (EGBGB), the old version of § 578(1) BGB – with its written-form requirement – continued to apply to such leases up to and including 1 January 2026. However, if the parties agreed an amendment from 1 January 2025 onwards, the new version applied to that lease from the date of the amendment agreement.

The consequence is that, from 2 January 2026, all commercial leases are judged by the text form standard. A formal defect under the old written-form rule that affected a lease concluded before 2025 can no longer be used to terminate it from that date onwards, provided the lease satisfies text form. Since almost every lease that was signed on paper also meets text form, the practical effect is that most old written-form defects have been cured by operation of law.

Whether terminations declared during the transitional period, on the basis of a written-form defect, remain effective is a separate question that depends on the facts and on the timing of the notice. Parties involved in such disputes should take advice on the specific case.

The end of written-form disputes – almost

Written-form disputes had become a distinct feature of German commercial lease practice. The Federal Court of Justice (BGH) developed detailed case law on when annexes, side letters and amendments complied with written form, and in 2017 held that so-called written-form cure clauses (Schriftformheilungsklauseln) – clauses obliging the parties to remedy defects and not to rely on them – were invalid, because the written-form rule also protects a future purchaser of the property. That decision removed the most common contractual safeguard and made due diligence on lease form a standard part of real estate transactions.

The move to text form addresses the root of the problem. Commercial leases signed on paper, by email exchange or with simple electronic signatures now generally satisfy the form requirement. Side letters and amendments sent by email can do so as well. Transaction due diligence can therefore focus on the content of the leases rather than on their formal history.

Some risks remain. A lease can still fail text form if essential terms were agreed only orally or by conduct, or if the documents do not identify which version was agreed. A further risk is evidential: when agreements are concluded by email, it can be harder to establish which draft became binding. Good document management is therefore more important than ever.

What the reform means for landlords and tenants

For landlords, the main benefit is stability. A fixed-term lease with a creditworthy tenant can no longer be undermined by a missing annex or an informal rent amendment. That matters for valuations and financing. Landlords should, however, be careful when communicating with tenants by email: a message that appears to agree a concession – a rent reduction, a different use or an extension – may now satisfy the form requirement and bind the landlord if it is accepted. Internal rules on who may agree changes to leases, and in which format, are therefore advisable.

For tenants, the reform removes an exit option that was occasionally used to escape unattractive leases or to renegotiate rent. In return, tenants benefit from the same stability when they have invested in fit-out and rely on long-term occupation. Tenants should also ensure that agreements in their favour, such as rent-free periods, landlord contributions to fit-out or exclusivity commitments, are documented in text form so that they bind a future purchaser of the property under § 566 BGB.

For property managers, the reform makes day-to-day administration easier, but it also increases the importance of disciplined communication. Many routine messages now carry legal weight, so templates for standard communications – rent indexation notices, consents to subletting or alterations, and confirmations of agreed changes – help avoid unintended commitments.

Practical impact on transactions and financing

For buyers of real estate and lenders, rental income is a key value driver. A buyer steps into existing leases by operation of law under § 566 BGB, which applies to commercial premises through § 578 BGB. A lease that can be terminated early because of a formal defect reduces the value of the property and the security for the lender.

With the switch to text form, the formal risk has fallen significantly. Due diligence should nonetheless verify:

• that a complete set of lease documents, including all amendments and side letters, exists in text form;
• that oral agreements or practices that changed key terms (rent, area, term) have been documented;
• that index and turnover rent clauses, renewal options and break options are documented consistently;
• that the seller's data room reflects the lease as currently lived, not just as originally signed.

Sale and purchase agreements typically include seller guarantees on the completeness of lease documentation. These remain useful, and their scope can now focus on substantive content and the absence of undisclosed side agreements.

Drafting and managing commercial leases after the reform

Landlords and tenants can take simple steps to make the most of the new rules:

1. Single source of truth: maintain a consolidated lease file with the signed lease, annexes and all amendments, each identified by date and version.
2. Clear amendment process: agree that amendments require a document in text form that expressly refers to the lease and is confirmed by both parties.
3. Email discipline: distinguish negotiation emails from binding agreements, for example by using a confirmation format or electronic signature workflow.
4. Annex references: refer to plans, specifications and descriptions of premises precisely, so that the content of the lease can be identified.
5. Review standard clauses: outdated clauses addressing written-form cures can be removed or replaced by clauses on the amendment procedure.
6. Residential components: mixed-use leases with a residential element may still be subject to written form; check the classification.

Electronic signature tools are a practical way to combine convenience with clarity. They are not legally required for text form, but they create a clear record of which document both parties accepted and when, which is valuable evidence if the content of the lease is later disputed.

Other issues in commercial leases in 2026

The form reform does not change the substantive law. Leases of business premises remain largely subject to freedom of contract, but standard terms are reviewed under §§ 305 ff. BGB, which affects clauses on operating costs, cosmetic repairs, maintenance of common areas and liability. Energy efficiency and ESG obligations, including green lease clauses and the allocation of costs for building upgrades, are increasingly negotiated. Index-linked rents are common and need careful drafting. And the question of rent adjustment in crises – addressed through § 313 BGB during the pandemic – remains relevant for supply shocks, as discussed in our article on force majeure and hardship.

How TRW & Co helps

We advise landlords, tenants, investors and lenders on commercial leases in Germany. We draft and negotiate office, retail, logistics and hotel leases, set up amendment and documentation processes that work under text form, review lease portfolios in acquisitions and financings, and handle disputes about lease terms, terminations and rent adjustments. Our work connects with our real estate transactions practice and our real estate and public law team, and with our article on share deals and asset deals. Please contact us. This article is general information and not legal advice.