Rent increase under section 46a MRG for commercial premises: staged plan and evidence

Section 46a MRG contains a special transitional rule for certain older main leases of commercial premises. In the cases described by the provision, the landlord may seek a staged increase of the main rent. The decisive points are the historical date of the lease, its documented history and the event that gives rise to the demand.

This article explains when the staged plan may apply, which variants section 46a MRG distinguishes and how the increase can be spread over up to 15 years. The focus is on the documents landlords, successors and apartment-building buyers need for a reliable review.

Which older commercial premises fall under section 46a MRG?

The starting point is a main lease of commercial premises existing on 1 March 1994. Section 46a MRG therefore connects the staged plan to a historical lease stock. A commercial lease does not fall under the plan merely because the premises are used for business today.

The review needs a complete lease chain. This includes the original main lease, amendments, agreements on main rent and records of later changes. In an apartment building with several commercial units, each unit must be reviewed separately. Later construction phases and extensions cannot be classified through a blanket statement about the building.

Section 46a(1) MRG applies section 12a(3) with a special rule for changes before 1 October 1993. The dates of the lease and its changes must therefore be read together with their legal and economic background.

How does the staged plan work after the tenant's death?

Section 46a(2) MRG concerns a main lease of commercial premises existing on 1 March 1994. If the former main rent is below the appropriate rent under section 16(1) MRG, the landlord may seek a staged increase from the legal successors after the death of the main tenant. The increase starts from the 1 January following the death.

The difference to the appropriate rent is generally spread over 15 years. For each calendar year after the date of death, one fifteenth of the remaining difference may be added. Section 46a(2) MRG also provides for indexation of this amount under section 16(6) MRG. The calculation therefore needs a clear starting amount and a traceable time allocation.

If the successor continues the business without changing the type of business, that business type must be taken into account when determining the appropriate rent. The file should therefore identify both the former business and the successor's continued activity.

Which further cases does section 46a MRG cover?

Section 46a(3) MRG deals with leases of a business and distinguishes the date of the lease from the continued existence of the arrangement. For a lease concluded after 28 February 1994, section 12a(5) MRG applies. If the business had already been leased before that date and the lease remains in force, a staged increase may be sought under the statutory conditions from the 1 January following the demand. The right lasts only while the lease continues.

Paragraph 4 concerns certain commercial premises leased by a legal person or commercial partnership before 1 January 1968. It also requires additional conditions, including a change in legal and economic control and the absence of specified earlier rent agreements.

Paragraph 5 covers a historical business transfer before 1 January 1982 where the main lease rights did not pass, although the parties transferred the lease rights and duties internally. The landlord must, among other things, recognise the buyer as the new main tenant and issue a written demand for the staged increase.

Which documents support the calculation?

The calculation starts with the former main rent and the appropriate rent under section 16(1) MRG. Neither figure should be taken from a current rent roll when the historical lease calls for a different starting point. The agreement, actual payments and circumstances of the premises all matter.

The unit file should contain the legacy lease, every amendment, rent demands and payment records. Depending on the case, it may also need evidence of death and succession, the business operated, the lease of the business or its transfer. These documents do not prove every legal step automatically, but they show which facts still require review.

The calculation sheet should state the former rent, appropriate rent, difference, annual step, commencement and indexation separately. A single final amount is insufficient for checking the staged plan. The rent-roll plausibility check can help organise the records; applying section 46a MRG remains a case-specific legal assessment.

How should the demand for an increase be prepared?

The demand must match the relevant statutory case. Before it is sent, the lease date, former main rent, appropriate rent, succession or lease of the business and requested commencement must be compared. For paragraphs 2 to 5, the file must also show which declaration triggers the statutory commencement.

For traceability, an attachment should calculate the individual steps and identify the underlying lease records. The file should also preserve proof of receipt, later objections, payments and changes to the business. Section 46a(6) MRG refers to section 12a(7) MRG and, for the cases it covers, to the periods in section 16(8) MRG. The applicable time limits need to be checked against the specific demand.

The topic page rent roll and lease agreements explains how rent data and lease documents can be brought together. For an apartment-building buyer, the complete file matters because a change of ownership does not replace the historical facts behind the claim.

What must be distinguished from section 46a MRG?

Section 46a MRG is a transitional rule for older commercial leases. An increase under section 12a MRG following the sale of a business operated on the premises has its own legal test. Both provisions should remain separate in the lease file.

Turnover rent answers a different question. It is based on a contractual definition of turnover, often with a minimum rent, reporting duties and audit rights. Section 46a MRG does not replace that agreement and does not automatically create a turnover-based calculation.

The procedure under section 18 MRG must also be distinguished from the staged increase in an individual legacy lease. The published article commercial premises in an apartment building covers the general review of commercial leases, while this article focuses on the historical staged mechanism.

What should buyers and sellers of an apartment building clarify?

Sellers should disclose for each affected unit which section 46a MRG case supports the expected increase. The file should include the historical lease, former main rent, difference calculation, demands for increase and the current status of objections or payments.

Buyers need to distinguish income that is legally enforceable from a provisional model assumption. An unproved death, unclear succession, a changed business type or missing proof of service can affect the valuation.

A separate file for each commercial unit is useful at handover. It should contain the lease chain, calculation, correspondence and open review points. This keeps the rent roll, purchase guarantees and later management on the same factual basis.

Subscribe to legal updates

Receive new articles and legal updates from the firm through BRANDaktuellen Rechtsnews.