Vol 21 (2024) - Issue 6

Article preview

Real Estate Companies in Insolvency: The Landlord’s Perspective

Synopsis
A tenant’s insolvency hits landlords particularly hard.
Existing rental securities (e.g. rent deposit, landlord's lien) cannot always cushion the loss of rent and operating costs. Especially in times of the current energy crisis and rising costs, this issue is becoming increasingly explosive in Germany. This is demonstrated by the numerous German insolvencies in the fashion retail
sector, such as Galeria, Peek & Cloppenburg, KaDeWe and Esprit. High rents are often of the main reasons for insolvency.
This short article provides an overview of the most important challenges that landlords in Germany have to overcome when their tenants become insolvent.
The article outlines the rights to which landlords are entitled in this situation (i.e. in preliminary insolvency proceedings and in main insolvency proceedings) and which aspects in particular need to be taken into account. It is assumed that the rented property was already made available to the tenant before the tenant filed for insolvency.