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Land Mobilization Act: what does it mean for you?

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Definition and summary

The adopted law was preceded by a two-year preparatory phase. Even before it came into force, it generated a great deal of discussion. The aim of the law is to counteract the tight housing market in German cities and to expand the possibilities for municipalities to act when accessing land for housing construction and creating living space. To this end, the Land Mobilization Act provides for a number of amendments to the Building Code and the Land Use Ordinance. The areas with a tight housing market defined in the Building Code act as the basis for the law. If the conditions set out therein are met or if an area is deemed to be at risk, municipalities can take steps to ease the housing market.

The most important contents explained in an understandable way

The main focuses of the law concern sectoral development plans, areas with a tense housing market, the ordering of building bans and other relevant subject areas. For example, a development plan can designate areas in which only buildings for social housing may be constructed. State governments are given the right to designate areas with a tight housing market based on relevant criteria, for example, if rents are rising significantly faster than the national average, there is a low vacancy rate with high demand, there is population growth without new construction to provide sufficient housing, or the average household rent burden is higher than average. Also, as a result of the Land Mobilization Act, 13b of the Building Code has been reinstated for a limited period until Dec. 31, 2022. This facilitates the procedure for the approval of development plans for the inner area for the reopening of residential use. In this way, the development of outdoor areas in peripheral areas is facilitated and residential space is created in a timely manner.

In many areas, the establishment of home ownership is not readily possible.

Extension of the right of first refusal

The extension of the municipal right of first refusal is a significant provision of the new law. Under Section 24 of the Building Code, municipalities are given priority in the purchase of so-called problem properties at market value. This makes it possible to react more quickly in the event of a tight housing situation and to purchase derelict land for the creation of housing. The period that applies to this right of first refusal has been extended from two to three months. To this end, a right of first refusal for derelict land in regions with a tight housing market was adopted.

Ban on conversion of rental apartments into condominiums

Among the significant changes is the introduction of Section 250 of the Building Code, which regulates the conversion of rental apartments into condominiums. According to this, in areas with a tight housing market, the establishment or division of residential property is not readily possible. In this regard, the state governments must determine in advance, via a legal ordinance, which areas fall under this. In principle, such a permit requirement does not exist for residential buildings with fewer than five apartments, but the question of the number of apartments above which multi-family dwellings are actually covered is a matter for the states. Thus, federal states can adopt deviating regulations. In general, the ban on conversion means that multifamily houses cannot be divided up and sold to tenants without further ado.

Frequently asked questions

Written by:

Stefanie Aust, Guest Writer

Stefanie loves to put complex topics from the real estate world into understandable and inspiring words. Whether it's about the right financing, choosing the right type of flat, or a successful property search: Stefanie is happy to inform you.

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