Federal Administrative Court partially quashes pre-emption rights

Federal Administrative Court stops Berlin preemption practice

After the rent cap ruling from Karlsruhe, now comes the judge's decision from Leipzig on Berlin's preemption practice. The judges at the Federal Administrative Court have put a stop to the argumentation used by many Berlin districts to justify pre-purchases in a sweeping manner. The district which was sued, in this case the district office of Friedrichshain-Kreuzberg, had exercised preemption stating that that the buyer could be a potential risk for the tenants.

The judges assesd the situation totally different and stated that there is no pre-emption just because the next owner could be a hypothetical threat. After all, the buyer acquires an apartment building being used in accordance with the objectives of milieu protection and the new owner is subject to the same rules as the old owner.

Judges depoliticise pre-emption rights

Senate annual reports: 637 cases of examination since 2017

Since 2017, the Berlin Senate has submitted an annual report to the House of Representatives on the exercise of pre-emptive rights, which shows how many applications for the exercise of pre-emptive rights have been examined, averted, exercised, or, from the district's point of view, remained unsuccessful, e.g. because no interested third party was found (the districts do not buy themselves, but exercise the pre-emptive right in favour of a third party).

What happens to open cases?

If the buyer was unwilling to accept the district's averting agreement, the district exercised the pre-emption. Currently, there are about 10 cases pending in court where the buyer did not want to comply with the district's decision. In these cases, the buyer has a very good chance of success.

What if the buyers agreed with the waiver agreement?

If buyers agreed to the conditions of the waiver agreement, the districts were no longer able to exercise the right of first refusal. In total, this was the case 292 times. A window might now open for these buyers to terminate the agreement, which no longer has a legal basis, with the district. Practice has proven that the districts have aggressively negotiated according to the maximum principle. Many buyers who have only grudgingly accepted excessive demands will seek to get out of the agreement. The districts' intransigence may now turn against them.

Successful acquisitions without waiver agreement

In total, the cases in which a buyer was able to acquire without a waiver agreement are surprisingly high. Such cases were assessed by the districts and the senate administration as "unsuccessful transactions":

Significant increase in cases of examination over the years

The rapid increase in the number of cases of examination shows how important the Federal Administrative Court's decision on Berlin's pre-emption practice was. It becomes clear that the districts had no intention of scaling back pre-emption practice.

Conclusion

The Leipzig judgement makes it unmistakably clear that neither state policy nor district administrations down to the level of district councillors (Baustadtrat) are allowed to interpret and apply existing law according to their own ideals. The judgement restores the conservation statutes according to §172 BauGB to its core as an urban planning instrument. Furthermore, the ruling has made it clear that political decisions and their implementation by administrations must not be degraded to the level of compliant activism serving certain groups.

For the time being, it remains uncertain whether it will be possible to permanently disarm at the level of the matter at hand. Under the new coalition that is in the offing, an amendment to the building code is not unlikely. In the course of this, the practice of pre-emption rights may also be reorganised.

***************************************

How many milieu protection areas exist in Berlin?

From 2015 to 2020, the number of social preservation areas (milieu protection areas) in Berlin tripled from 22 to 66. As of October 2021, 14 areas are in force in Pankow, 11 in Mitte, 9 in Friedrichshain-Kreuzberg, 8 in Tempelhof-Schöneberg, 7 in Neukölln, 7 in Treptow-Köpenick, 3 in Lichtenberg, 2 in Charlottenburg and 1 milieu protection area in Reinickendorf, whereby the Reinickendorf preservation area had to be withdrawn due to an inaccurate basis of investigation. The efforts of the Senate and the districts are to add new areas; the declared long-term goal of the Senate Department for Urban Development, most recently led by the Left Party, is a Berlin-wide coverage.

Is your apartment block in Berlin located in a milieu protection area?

Check in our milieu protection map whether your apartment building in Berlin is located in a presumptive, investigation or milieu protection area.