Bureaucracy Relief Act IV – Simplifications for land lease agreements.

The land lease agreements with the landowners are the core of every wind power and PV project. Financinc banks, investors and simply the profitability calculation require reliable minimum contract terms of 20 or 30 years. However, the legally binding agreement of the fixed term is not without obstacles due to the previous legal requirements regarding the written form. These are now being significantly lowered.

Text form instead of written form for land lease agreements

Instead of the previously required written form, the agreement of the contract in text form will be sufficient under the amended section 578 para. 1 German Civil Code in connection with section 550 German Civil Code in order to exclude termination with notice during the fixed term. The requirements for text form are governed by section 126b German Civil Code. The content of the contract must be readable, meaning that it can be concluded by email, signature on a scanned contract, electronic signature, etc. It is important to note that the contract file must be in a form that can be reproduced and saved unchanged, i.e. it should be sent by email or on a data carrier as a PDF or image file. The conclusion, in other words the binding nature and completeness of the contract, must be recognizable, ideally by means of a signature (e.g. digital or scanned) under the text of the contract. In order to comply with the text form, there must be a clear link between any attachments and the text of the contract..

Caution with addenda

It remains important to establish an unambiguous link between addenda and the original contract. The original contract must be named precisely. Furthermore, it must be made clear in the preamble that the addendum only partially amends the existing contract and that the rest of the contract, including any previous addenda, remains in force.

Note: If the land lease agreement contains a clause requiring written form, the addendum must still be concluded in written form to be effective.

What applies to contracts already concluded?

Land lease agreements concluded before 1 January 2025 are subject to a transitional period of one year. In relation to these agreements, the lowering of the written form requirement to a text form requirement will only apply from 2 January 2026. Contracts that were concluded before the Bureaucracy Relief Act IV came into effect and do not meet the written form requirement can therefore still be terminated with notice up to and including January 1, 2026, even if they comply with textform.

However, the legal situation changes if a contract concluded before 1 January 2025 is (validly) amended by an addendum during the year 2025. In this case, the entire contract becomes subject to the amended section 578 para. 1 German Civil Code and can therefore only be terminated with notice if the agreement does not only fail to comply with written form but also with text form. The condition is that the addendum is effectively agreed, considering any formal requirements from the contract.

The requirements for land lease agreements with a fixed term have been significantly lowered. Nevertheless, care must be taken when concluding the contract and any addenda: After all, the text form – within the meaning of the German Civil Code – must be observed in order to exclude the possibility for the contract to be terminated with notice during the agreed term. In addition, transitional periods up to and including January 1, 2026 must be kept in mind.

Our renewable energy experts Dominik von Wissel, Dr. Sophie Schierning and Dr. Florian Brem will be happy to answer any questions you may have about usage agreements for PV and wind projects.