Berlin Extends the Restriction on Title Splits, Division into Condos, For Another Five Years

The Berlin city government (Senat) has extended the limitations on title splits in social conservation areas by another five years. The regulation would have expired in March.

This is a map of the areas as of 30.06.2019

Soziale Erhaltungsgebiete Berlin, Stand 30.06.2019

More details about the individual areas are in our blog https://propertylocations.blogspot.com/

Legal Background

The German Building Code, Section 172, provides the option for cities like Berlin to define social conservation areas “Soziale Erhaltungsgebiete”, also known as “Milieuschutz” Gebiete. One of the measures within this regulation is the option to stop owners of apartment buildings in these areas from dividing them up into condos (“Eigentumswohnungen”) through a title split. For the other aspects see https://germanproperties.blogspot.com/2018/03/the-can-do-and-cant-do-renovating.html on this blog.

The Good News

However, there are 6 exceptions where the district office cannot deny the permit for the title split. They are listed in Section 172 (4) of the Building Code. Statistics on this matter show, that amongst the reasons, that were listed by the owner in the application for a conversion permit between March 14th, 2015 and June 30th, 2019, 92.7% of the 15,773 apartments an application for a conversion was made was based on the “voluntary commitment of the owner - sale only to tenants for a period of seven years” (sentence 3 No. 6).

Depending on the intentions of the owner or buyer, this can be an acceptable limitation.

Looking for help in your case? Please contact us, using the email address on the right.

Berlin Extends the Restriction on Title Splits, Division into Condos, For Another Five Years

Leipzig is Planning to Identify 4 Areas for "Milieuschutz" - Gentrification Protection

The city of Leipzig is planning to identify four areas for protection restricting certain activities by landlords, like title split or luxury modernisation. The application of federal law  is called "Städtebauliches Erhaltungsgebiet" or "Milieuschutz". The consequences are described in detail in this article on this blog: The Can Do and Can't Do Renovating Apartments in Certain Areas of Berlin
It applies to Leipzig as well.

Von Frank Vincentz - Eigenes Werk, CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=53288072

For more background information in German: http://www.lvz.de/Leipzig/Lokales/Leipzig-will-Milieuschutz-gegen-steigende-Mieten-einfuehren

Leipzig is Planning to Identify 4 Areas for "Milieuschutz" - Gentrification Protection

Berlin, March Against Displacement and Rent Madness

More than 180 organisations and group initiatives have called for a "March against gentrification and rent madness". The march starts at Potsdamer Platz in Berlin on 14. April 2018 at 2 p.m. and was registered for 4,000 participants but 10,000 have already announced their participation via facebook.

Photo by Darko Pribeg on Unsplash

85 % of Berlin's population are living in rented accommodation which makes changes is rent levels felt by the overwhelming majority. Families have to leave the areas where they have lived for years, where they have formed social ties and where their children have been going to school. They just can't afford the rent increases anymore and in some cases have to move out of the city altogether.

Most of the declining numbers of newly built apartments are in the luxury segment out of financial reach for the local working population. Social housing has been neglected, affordable housing is not available.

Of the existing apartments many have been modernized in recent years and the organisers of the march are criticizing that those modernisations play a big part in the rent increases and displacements. E.g. a new lift and energy saving new facade easily run up to 20,000 € per apartment which will allow the owner to raise the rent by 11% or 2,200 € per year for this apartment.

Regulations like "Milieuschutz" are trying to put a limit on the type of modernisation that will be allowed in protected areas amongst other things, more details here: http://germanproperties.blogspot.de/2018/03/the-can-do-and-cant-do-renovating.html. But the organizers say that there are not enough protected areas especially in the inner city districts.

The federal government has already announced a new initiative to increase social housing but also to expand the regulations for local authorities to protect social structures in their cities.

Berlin, March Against Displacement and Rent Madness

The Federal Government Plans to Tighten The Restrictions on Rent Increases in Germany

Katarina Barley, new Justice Minister, about future Housing Policy of the Federal Government

ARD "Bericht aus Berlin" 18.30 , 25.03.2018

Immediately in Barley's area of responsibility, is the rental price brake, which is to be tightened according to the coalition agreement. Barley announced that in the future the landlord should provide information about the amount of the previous tenant's rent. If it turns out that the new rent is too high according to the rental price break regulations, tenants should get the opportunity to reclaim the rent, including retroactively and have the current rent adapted. The Minister intends to present a draft bill before the summer break.


The Interview in German

"Outmodernizing" can be expensive

Barley also wants to prevent tenants from being burdened with modernization measures "beyond reason". In many cities, one can see that long-term tenants are specifically "modernized out" of their apartments, the minister said. Such a "targeted" procedure should be punished in the future as a violation. Tenants should also be given the opportunity to assert claims for damages.

Barley rejected the argument that this would impede housing construction. The apportionment of "normal modernization" should even be facilitated, that is, stripped of hampering bureaucracy. The minister suggested fines in a range of up to 10,000 Euros. She also emphasized: "Where luxury modernization is abusive, we will make it harder, and that's right."

Commentary

Rental Price Break and limitations on "luxury" modernisation are at the top of the agenda of Germany's new Justice Minister Katarina Barley. It seems to be a tribute to the political base of the SPD for joining the coalition against a substantial number of members wanting to stay in the opposition.

Both topics are full of legal traps. While the current version of the Rental Price Break has been challenged by lower courts and is on it's way through appeals, a new version is being hammered out. An upgraded version is planned to be presented to parliament before the summer break.

The limitation of "luxury" modernization seems an even bigger legal minefield. The definition of "luxury" depends on many factors. Most likely it will pick up on the norms used in regulated urban development areas called "Milieuschutzgebiet". These norms are orientated on average sizes and standards, e.g. a new balcony added in a modernization is not allowed to be bigger than 4 m². More details here: https://germanproperties.blogspot.de/2018/03/the-can-do-and-cant-do-renovating.html.

The Federal Government Plans to Tighten The Restrictions on Rent Increases in Germany

The Can Do and Can't Do Renovating Apartments in Certain Areas of Berlin

Preservation Statute Areas -. “Mileuschutzgebiete” in Berlin. What can I do, what can’t I do with my property.

The prevention of so-called “gentrification“ is a central issue for the Berlin city government. The term “gentrification” is describing the process of displacing parts of the current population of inner-city areas through rent increases beyond their reach. This development completely changes the social structure of entire boroughs and destroys social networks and the associated support functions for its members.
The Federal Building Code (Baugesetzbuch, BauGB) includes a regulation that provides local authorities with a tool that is intended to avoid such a development. More details about the split of apartment blocks into individual condos and the English version of the building code can be found here:
https://germanproperties.blogspot.de/2018/03/thinking-about-dividing-apartmentblock.html

Section 172 of the code allows for the definition of protected areas under certain statistical conditions and for a specific time period of up to 5 years. There is a widespread consensus that after 5 years another 5 year period can be proclaimed and so on. It would be highly speculative and dependent on political significant changes to expect a change after 5 years.

There are two different criteria for protection which can be applied separately or in combination,
Social Preservation area § 172 (1) Nr. 2 BauGB and/or Erhaltungsgebiete with unique urban character § 172 (1) Nr. 1 BauGB

The map below shows the Berlin areas that are currently covered by individual Preservation Statutes (Milieuschutzverordnungen)

Source: Senatsverwaltung für Stadtentwicklung und Wohnen

For detailed information about the individual districts please visit our Blog: https://propertylocations.blogspot.de/

Social Preservation area § 172 (1) Nr. 2 BauGB

Examples of renovations or modernizations that are not allowed (examples)

• Floor plan changes
• Merging or splitting apartments
• Extension of balconies, conservatories, loggias or terraces with more than 4 m² of floor space
• Extension of second balconies, conservatories, loggias or terraces
• Fitted kitchens
• Installation of a second toilet, complex bathroom renovations

Examples of renovations or modernizations that are allowed (examples)

Refurbishments that only produce the "state-of-the-art" equipment of an average apartment must be approved. The resulting rent increases must be borne by the tenants in most cases.

To be approved by authorities (among others):

• Initial construction of a central heating with hot water supply
• Initial construction of a bathroom
• Upgrade of an existing bathroom with modern equipment
• Basic equipment with plumbing, water and electrical installations, antenna, cable TV and intercom systems
• Replacement of existing windows according to the Energy Saving Ordinance (Energieeinsparverordnung EnEV)
• Obligatory energy conservation renovations
• Attic conversion and new construction

A post like this one is always restricted to general examples and can never provide an all-inclusive overview of all aspects. Before any action is taken and money spent we recommend a consultation with the local authorities.

We provide advice and guidance for these types of projects for our clients from the first steps of a feasibility study through to a business plan and completion of the project. For inquiries about our services please use our contact page .

The Can Do and Can't Do Renovating Apartments in Certain Areas of Berlin