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
From the point of view of some districts, sales of apartment blocks in Berlin should best not take place at all. Despite the current, comprehensive tenant protection, transactions are stylised as a threat. This narrative is followed by the Senator for Urban Development and Housing, Sebastian Scheel, who says the ruling is a disaster for tenants in Berlin. In addition to a strange understanding of the constitution, the senator is also unable to give conclusive reasons why the ruling should be desastrous. Tenants are not threatened by either the old or the new owner. If the new owner carries out a division according to the Condominium Act, he or she may sell exclusively to the tenants for a period of 7 years. After this period, the tenants continue to enjoy the right of first refusal for the flat and, after a sale to a third party, a further 5 years of special protection against termination due to own needs. In total, tenants are thus protected from any change for a period of at least 12 years. This corresponds to two and a half legislative periods.
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.
Number of cases where districts made use of pre-emption
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":
Acquisition of apartment blocks in Berlin w/o waiver agreement
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.
Quota w/o waiver agreement
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.