Text Form Instead of Written Form

What’s Changing for Commercial Lease Agreements

Starting in early 2025, commercial leases with terms longer than one year can finally become more digital. The Bureaucracy Reduction Act IV has clarified that the former written form requirement is now replaced by the text form requirement. At first glance, this sounds like a simple formality. In reality, it changes how leases are drafted, modified, and documented — impacting tenants, landlords, buyers, and everyone involved in real estate. To shed light on these changes, we spoke with attorney Adnan Manzoor.

What Exactly is Different Now?

Previously, if a commercial lease was set for more than one year, it had to be signed on paper. Without a written contract, the lease was considered indefinite. This often created complications, especially in transactions.

Now, the text form (§ 126b BGB) suffices, meaning:

• No signature is required

• No paper document is necessary

• A readable declaration on a durable medium (e.g., email or PDF) is enough

• The sender must be identifiable

This rule applies to all new contracts from January 1, 2025. Existing contracts retain the old written form requirement until the end of 2025 — unless amended, in which case the new rule applies immediately.

Well-Intentioned — But Not Without Pitfalls

At first glance, this is a clear step forward: negotiations and contract changes can be handled more easily, quickly, and digitally. But with this newfound freedom come new challenges:

1. Uniformity Remains Mandatory

Even in text form — whether it’s a lease or a commercial financing agreement — all essential contract terms must be documented clearly and cohesively. A contract attached as a single email file is fine; however, fragmented email chains with unclear agreements can be risky. Courts still demand a clear, unified record. Here, digitalization can quickly become a trap.

2. Increased Risk with Amendments

When lease terms are adjusted or supplemented over months via email, it’s easy to lose track. Who said what and when? What terms really apply? Without clear structure, minor ambiguities can escalate into major disputes.

3. Greater Transactional Importance

For real estate buyers or shareholders, well-documented leases are critical. The new rule makes it harder to distinguish between primary agreements and informal email side agreements. The risk of being bound by unclear side deals rises. Transactions will require even more focus on thorough documentation, guarantees, and completeness declarations.

Practical Tips

A few approaches have already proven effective:

• Contractual form requirements: Clear rules on how changes must be made (e.g., “only via email to a designated address”) create structure and security.

• Use of electronic signatures: Not legally mandatory, but advisable — especially for complex agreements.

• Completeness declarations: Having tenants confirm upon request that all agreements are documented in writing clarifies matters — and aids buyers in due diligence.

More Flexibility — But With a Plan

Text form makes many things easier, but not automatically better. Those aiming to handle contracts digitally must establish clear processes. An unstructured flood of emails cannot replace clean contract documentation.

For all parties, a bit of digital discipline will help make good use of the new rules. But relying on “it’ll probably be fine” can lead to costly disputes down the road.