Index clauses in commercial leases: BGH ruling opens up clawback risks for landlords

Value assurance provisions in the form of index clauses in standard commercial leases are not only subject to the restrictions of the Price Clause Act, but also to the content review under general terms and conditions law. This was decided by the Federal Court of Justice in its ruling of March 11, 2026 (case no. XII ZR 51/25) and declared the value assurance clause used there to be invalid from the outset. All rent increases based on this clause were therefore paid by the tenant without legal justification and must be reimbursed by the landlord. Landlords should therefore review their model formulations for indexation clauses at short notice.

This was the issue in the case on which the decision was based

In the case decided, the BGH declared the value adjustment clause invalid from the outset due to unreasonable disadvantages and a lack of transparency. The landlord had to refund all rent increases already paid. The BGH ruling was based on a rental agreement for commercially used premises with a start date of September 1, 2019 and a minimum rental period of ten years. According to a value adjustment clause in the form, the net cold rent was to be based on the consumer price index for Germany (CPI); the starting point for any changes in value was to be the index level in May 2017. On the one hand, the rent should be automatically adjusted in proportion to the index change, but on the other hand, the increase should only take effect after a written request by the landlord.

Price Clause Act and GTC law apply in parallel

The BGH clarified that value assurance clauses in commercial leases are not only subject to the German Price Clause Act (PrKG), but also to the full content review under general terms and conditions law pursuant to sections 307 et seq. BGB. In this respect, the BGH rejected the primacy of Section 8 PrKG as lex specialis and emphasized that both sets of rules apply alongside each other. The different legal consequences are decisive in practice: if a clause only violates the Price Clause Act, it only becomes invalid under Section 8 PrKG once it has been legally established (ex nunc). Claims for repayment of increase amounts already paid are then generally out of the question. If, on the other hand, it violates Section 307 BGB, it is deemed void from the outset (ex tunc) in accordance with Section 306 BGB. The rent increases based on this are made without legal grounds and can – within the limitation periods – be reclaimed.

Background: The Price Clause Act primarily pursues stability and price policy objectives and defines the conditions under which price clauses are permissible in long-term contracts. § 2 para. Section 1 sentence 2 PrKG requires the clause to be sufficiently specific and not unreasonably disadvantageous to either party, which would be the case, for example, if the clause only regulated rent increases but not reductions. In contrast, the review of the content of general terms and conditions in accordance with Section 307 BGB serves to protect the contractual partner from unilateral form-based regulations. Clauses must be formulated clearly and comprehensibly (Section 307 (1) sentence 2 BGB) and they must not unreasonably disadvantage the interests of the other party (Section 307 (1) sentence 1 BGB).

It is true that the Price Clause Act and the law on general terms and conditions work with similar criteria. However, their assessment standards are not identical due to the different protective purposes and can therefore lead to different results. This is precisely what the BGH decided in the underlying case.

This is why the value protection clause did not stand up to the general terms and conditions review

In the case decided, the value retention clause was invalid for two reasons:

Firstly, it contained an unreasonable disadvantage

The BGH found that the clause was unreasonably disadvantageous because it was based on the consumer price index for May 2017, even though the tenancy did not begin until September 1, 2019. The inflation that has occurred since May 2017 was thus imposed in full on the tenant, although she had no option to use the property during this period. According to the BGH, value protection clauses may not be based on pre-contractual periods for which the tenant has not received any consideration.

Secondly, the clause was non-transparent

According to the BGH ruling, the rent adjustment mechanism was not described clearly and without contradiction and was therefore non-transparent. On the one hand, the rent is to be adjusted automatically if the consumer price index changes, while on the other hand, the effectiveness of the increase is made dependent on a written request from the landlord. At the same time, it remains unclear whether subsequent adjustments should continue to be based on the May 2017 index level or on the last adjustment date or the CPI level on which the last adjustment was based. The adjustment mechanism is therefore contradictory and cannot be reliably understood by the average tenant. This violates the transparency requirement and also leads to the clause being invalid.

Errors of this kind are likely to be found more frequently in commercial leases. One party often demands that the other must first provide a new rent calculation before an increase is owed. If no clear distinction is made in this respect between the automatic accrual of the claim and the due date only after receipt of a new (permanent rent) invoice, the risk of repayment is high.

Consequences for the design of index and value protection clauses

The following applies to the drafting of contracts: value adjustment clauses should be formulated with particular care. The adjustment mechanism should be regulated clearly and without contradiction – in particular the starting index, calculation method and the time and conditions for a rent adjustment to take effect. Even minor ambiguities or systematic breaks can lead to the clause being completely ineffective and to claims for repayment. Index references to periods before the start of the tenancy or to phases in which the tenant has not yet received any consideration are particularly risky.

Unfortunately, the clauses used to date and previous case law no longer provide reliable guidance in this respect. Against this background, we recommend that existing commercial leases be specifically reviewed with regard to their value retention clauses and that new leases only be concluded with clear provisions based on current BGH case law.