The BGH has – following the first instance judgment of the OLG Bremen – ruled that the agreement required pursuant to § 873 BGB for the establishment of a proprietary pre-emption right does not need to be notarially certified. § 311b para. 1 sentence 1 BGB (§ 313 sentence 1 BGB (old version)) does not apply to the proprietary agreement but only to the underlying obligatory transaction.

Change in case law: Departure from previous BGH position

With this decision, the BGH has departed from its previous position as expressed in a judgment of 7 November 1990 – XII ZR 11/89, which had led to the question of the formal requirement for the establishment of a proprietary pre-emption right being answered inconsistently in legal literature and case law and giving rise to uncertainties. Clarity should now ensue.

New reasoning of the BGH

In its reasoning, the BGH states that a special form is only to be observed where the law expressly prescribes this. However, the law contains no such provision for § 873 BGB. Only from a land register law perspective must the registration consent be evidenced by public or publicly certified documents.

Systematic classification and reasoning

• § 311b para. 1 sentence 1 BGB applies, according to its wording and systematic position, only to the law of obligations obligatory transaction; an analogous application would not be possible due to the absence of an unintended regulatory gap, as the performance transaction is subject to different rules due to the principle of abstraction existing in German law.
• Furthermore, even in the case of conveyance (§ 925 BGB), which is directed at the transfer of ownership of a property, notarial certification is not required; accordingly, this can a fortiori not be the case for an agreement within the meaning of § 873 BGB, which is not subject to any special provisions.
• Finally, a formal requirement would be incompatible with the healing effect in § 311 para. 1 sentence 2 BGB, as a healing of a formally invalid obligatory transaction would otherwise regularly not occur if the agreement were also subject to the same formal requirements.

Reference: BGH, Judgment of 8.4.2016 – V ZR 73/15 (published in NJW 2016, 2035)

Background: Outer area designations in development level plans

Outer area designations in Hamburg development level plans pursuant to § 10 para. 5 BPVO have not been transferred into current planning law pursuant to § 173 para. 3 sentence 1 BBauGB – even where they are designated for small areas – because there was already no legal basis for the designation of non-building areas for these plans based on the so-called Building Regulation Ordinance (BauRegVO).

Decision of the OVG Hamburg

The Hamburg OVG, having already declared in the past the designations for extensive outer areas within the meaning of § 10 para. 5 BPVO in the transferred development level plans to be obsolete, had until now left open the question of whether at least small-scale outer area designations could claim validity.

New reasoning of the court

This is now answered in the negative on the grounds that the BauRegVO had already not contained a sufficient legal basis. In doing so, the OVG Hamburg simultaneously departs from its case law on the authorization to designate non-building areas under the BauRegVO. In its judgment of 18 December 1975 – Bf II 91/74, the OVG Hamburg still recognized a fundamental designation authorization for non-building areas in § 1 in conjunction with § 3 BauRegVO, because the authorization to designate building areas had indirectly also been associated with the establishment of non-building areas.
The OVG now rejects the legal view held at that time on the grounds that § 3 BauRegVO – contrary to what was assumed at the time – is only an authorization norm for refusing building permits in non-building areas and not at all a legal basis for the designation of building areas.

Significance for owners and administration

The legal treatment has now been conclusively clarified both for the owners of properties located in small-scale outer area designations under the development level plans and for the Hamburg administration. The uncertainties that existed in the past have been eliminated. In the absence of a legally effective designation in the development level plan, the planning law admissibility is governed by § 34 or § 35 BauGB.
By Ines Hartwich
Reference: OVG Hamburg, Judgment of 20.4.2017 – 2 E 7/15.N – juris.

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The amendments to the HBauO resolved on 23 January 2018 will largely come into force on 1 May 2018. The legislative amendment creates facilitations primarily for timber construction and residential construction and serves to implement European law requirements.

KFR – Kanzlei für Real Estate summarizes the most important changes. The following amendments to the HBauO are particularly noteworthy:

Property development/access (§ 4 HBauO)

Under the previous provision, the requirements for proper property access and thus for the developability of a property included, in addition to other requirements such as adequate road width and connection to the public water supply, that no more than four properties or a row of houses up to 50 m in length could be accessed via a shared access route.

This requirement presented a problem in particular for the development of rear properties and for the development of larger residential quarters. This provision has been repealed by the legislative amendment. Going forward, more than four properties as well as longer rows of houses can therefore be accessed via a shared pathway.

Timber construction (§ 24 HBauO)

Solid timber construction is now permissible up to a maximum height of 22 m instead of the previous 7 m. This legislative amendment is intended to create, among other things, a comparatively cost-effective alternative for building owners for the addition of storeys to existing buildings.

Lifts (§ 37 HBauO)

In future, the obligation to install lifts will also be waived when additional residential space is created in existing buildings by altering the top floor or by adding additional storeys.

This also applies to residential buildings with existing lifts that do not need to be extended higher in the event of an addition of storeys. This legislative amendment creates a further facilitation for building owners for densification in residential construction.

Parking space commutation payment (§ 49 HBauO)

The legislature has also created a further commutation provision for parking spaces in § 49 HBauO. The obligation to provide evidence of necessary parking spaces can now also be fulfilled by payment of a commutation amount when these are to be used as parking spaces for apartments or residential homes and parking spaces for these uses cannot otherwise be provided or can only be provided with unreasonable difficulty.

This legislative amendment serves in particular to create parking spaces for residential use in mixed-use buildings (commercial and residential), because the required evidence of necessary parking spaces for commercial uses otherwise frequently results in all available parking spaces having to be assigned to commercial use, even if there may actually be no need for this.

Barrier-free apartments (§ 52 HBauO)

The legislative amendment also provides for an amendment to the requirements for the creation of the necessary barrier-free apartments as a facilitation for building owners. The barrier-free apartments to be evidenced pursuant to § 52 HBauO can, after the entry into force of the legislative amendment, be evidenced across multiple storeys rather than only on one storey as previously.

Simplified approval procedure (§ 61 HBauO)

Tree felling permits are with the legislative amendment also to be reviewed by the building supervisory authority in the simplified approval procedure. A separate tree felling application to the Lower Nature Conservation Authority is therefore no longer required for a construction project applied for under the simplified approval procedure. The legislative amendment is intended to accelerate the implementation of projects and resolve any conflicts already in the building permit procedure.

Preliminary planning decision (§ 63 HBauO)

The legislative amendment introduces an approval deadline for preliminary planning decision applications. The building supervisory authority must decide on the preliminary planning decision application within 3 months of receipt of the complete documents. However, this legislative amendment does not lead to a noticeable improvement for the building owner. This is because the deadline provision is – as was previously the case in § 62 para. 1 sentence 2 HBauO (old version) for the concentrated building permit procedure – structured without a deemed approval occurring upon expiry of the deadline. Thus, upon expiry of the deadline, only the option of bringing an action for failure to act remains (§ 75 VwGO).

However, this would in any event be admissible after a period of 3 months. The occurrence of a deemed approval in the event of inaction by the building supervisory authority therefore continues to be possible only in the simplified approval procedure pursuant to § 61 para. 3 sentence 3 HBauO.

Deviation (§ 69 HBauO)

A newly created deviation provision is also intended to create a facilitation for residential construction. § 69 para. 1 no. 3 HBauO (new version) now explicitly permits deviations from the provisions of the HBauO also for alterations to the top floor or the construction of additional storeys for the creation of residential space. The newly created deviation option is intended to apply in particular to the waiver of children’s play areas, falling below the clear height requirement for top floor conversions, and the waiver of storage rooms or similar.

Soil investigation measures ordered by the authority are not to be tolerated by the owner if they are based on mere suspicion.

KFR – Kanzlei für Real Estate explains the decision of the OVG Hamburg and its significance for property owners.

Background of the decision

The mere circumstance that environmentally hazardous substances were handled on a property over a period of years is insufficient to establish a suspicion of danger for harmful soil changes or contaminated sites upon which preliminary investigative measures within the meaning of § 9 para. 1 BBodSchG can be based, which give rise to obligations to tolerate interventions in the property. What must additionally be present are indications that pollutants entered the soil through anthropogenic processes within the meaning of § 3 para. 1 or 2 BBodSchV during the handling of such substances.

The case before the OVG Hamburg

The subject of this OVG Hamburg decision is an order based on § 9 BBodSchG in conjunction with § 4 HmbBodSchG by the Authority for Urban Development and Environment (BSU) to the property owner to tolerate the carrying out of preliminary investigations to examine whether harmful soil contamination exists on the property.

In justification, the authority stated that a dry cleaning business had been operated on the property over a period of twelve years in the 1970s and 1980s and that pollutants had in all likelihood been handled there at that time. The intended operation of the dry cleaning business alone would suggest not inconsiderable inputs into the soil. No further reasons were cited by the BSU.

The OVG Hamburg overturned the tolerance order because the statutory prerequisites of § 9 para. 1 sentence 1 BBodSchG for corresponding measures were not present.

Legal assessment

Pursuant to this provision, the authority shall take appropriate measures to investigate the facts if it has indications that a harmful soil change or contaminated site exists.

However, the BSU had failed to provide evidence for the existence of such indications. The mere circumstance that environmentally hazardous substances had been handled on the property over a period of years was insufficient to establish the suspicion of danger required under § 9 para. 1 sentence 1 BBodSchG.

For the assumption of such suspicion of danger, it was required (but also sufficient) that actual indications exist that go beyond a mere suspicion made “in the blue.” Indications within the meaning of § 9 para. 1 sentence 1 BBodSchG are to be assumed where a – even if only minor – factual basis exists that justifies the conclusion that the existence of a harmful soil change or contaminated site is not entirely unlikely.

§§ 3 para. 1 and 2 BBodSchV, which contain a non-exhaustive list of examples of sufficient indications, show that what is relevant is in particular not the mere “presence” of pollutants but rather the “handling” of them and a possible harmful input into the soil.

This was lacking in the case decided by the OVG Hamburg.

Commentary from KFR – Kanzlei für Real Estate

Owners of properties frequently agree to tolerance orders for preliminary investigations by authorities (too) quickly because they assume that they cannot successfully defend themselves against such measures.

However, the lawfulness standards set out by the OVG Hamburg make clear that preliminary soil investigations by the authority are only permissible if it can demonstrate actual indications suggesting a concrete input of pollutants into the soil.

Since the determination of harmful soil changes or contaminated sites can be accompanied by extensive and cost-intensive remediation obligations for which the authority pursuant to § 4 para. 3 BBodSchG can hold not only the originator but also the (possibly subsequent) property owner liable, it is advisable, in order to avoid remediation orders, to examine at the first stage whether the tolerance order for preliminary soil investigations is lawful and – should this not be the case – to challenge it.

Reference: NVwZ-RR 2018, 181 – OVG Hamburg, Judgment of 12 October 2017 – 2 Bf 1/16

Tenancy law update: If a residential tenancy is terminated without notice due to rent arrears and simultaneously terminated with notice as a precautionary measure, the Berlin Regional Court had decided that the ordinary termination has no effect if the extraordinary termination becomes invalid due to a grace period payment pursuant to § 569 para. 3 no. 2 BGB, since at the time of its receipt a tenancy would no longer exist due to the extraordinary termination.
The BGH has now overturned this decision. The ordinary termination takes effect. KFR – Kanzlei für Real Estate explains the decision and its significance for landlords.

Background: Decision of the Berlin Regional Court

The LG Berlin had decided that a notice of termination, as a right of formation, takes immediate effect upon receipt and that a kind of suspended state is impermissible.
Subsequently occurring, modifying facts such as a grace period payment pursuant to § 569 para. 3 no. 2 BGB could therefore not – as sometimes argued in legal literature – lead to the termination becoming invalid ex tunc.
However, if the extraordinary termination initially stands and only becomes invalid ex nunc from the point in time of the new fact (e.g. grace period payment), a simultaneously declared subsidiary ordinary termination cannot take effect, since the effect of the subsidiary ordinary termination must also be assessed at the time of its receipt and, due to the initially valid extraordinary termination, no tenancy existed that could have been terminated. The ordinary termination is ineffective in this case.

BGH overturns decision

The ordinary termination takes effect. A landlord who, in addition to an extraordinary termination, also declares a subsidiary ordinary termination on account of the accrued rent arrears, does not make this declaration only for the case that the extraordinary termination is already invalid at the time of its receipt, but precisely and especially also for the case that the extraordinary termination subsequently becomes invalid due to a legally provided circumstance (e.g. the so-called grace period payment). By focusing solely on the fact that an extraordinary termination initially dissolves the tenancy and the ordinary termination therefore has no effect, the Berlin Regional Court artificially split a unified, naturally occurring set of facts into individual components.

Significance for landlords

Through this decision, the BGH spares landlords from having to seek alternative solutions in the future due to the formalism applied by the Berlin Regional Court, which would under certain circumstances also have been associated with a loss of several months. The decision is therefore very much to be welcomed from a landlord’s perspective.
Sources: LG Berlin, Judgment of 13.10.2017 – 66 S 90/17 (BeckRS 2017, 127840)
BGH, Judgments of 19.09.2018 – VIII ZR 231/17 and VIII ZR 261/17

Yesterday, we at KFR – Kanzlei für Real Estate in cooperation with the BFW Regional Association North held a seminar under the title “Urban Development Contracts – Error-Prone Clauses Discussed on the Basis of Current Case Law.”

Content and objective of the seminar

Dr. Henrik Kirchhoff and Carlotta Zimmermann (née Vohl) presented typical risks in the conclusion of urban development contracts using examples from recent case law and demonstrated through contract examples from our practice how urban development contracts can be drafted in a legally secure manner.
Since the conclusion of urban development contracts in the context of project development and the construction of building projects now represents the standard case, avoiding defective clauses and thereby ensuring a valid contract is indispensable for the successful realization of projects.

Discussion and participants

That urban development contracts have high practical relevance was demonstrated not least by the in-depth and constructive discussion with approximately 35 seminar participants.
Following a brief overview of the most common types of urban development contracts, such as

• the “cost assumption agreement”,
• “construction realization agreement” and
• development or implementation agreement,

principles and general formal and substantive requirements for concluding contracts were presented.

Legal foundations and practical examples

In addition to the requirement of proportionality, the prohibition on coupling and the prohibition on impermissible plan binding, as well as the strict handling of these by case law, the focus was in particular on examples from higher court case law on temporal obligations and time limits as well as permanent occupancy rights.
Subsequently, using practical examples, the urban development requirements regularly stipulated by the municipality were compared and discussed against the possible means of ensuring and implementing them.
Since not all requirements can be implemented through land use planning provisions or regulations in urban development contracts, further alternatives were also discussed. The focus this time was primarily on urban development requirements regarding the construction and use type “residential”, e.g. ensuring permanent or age-appropriate housing.

Focus: Urban development requirements and consequential costs

Finally, the topic of consequential costs of infrastructure measures was also discussed using the example of public facilities, childcare centers and primary schools, with particular emphasis on the requirement of causality.

Conclusion and thanks

The conclusion of urban development contracts is of great practical importance for both municipalities and investors and project developers. Only through legally secure drafting of contracts can construction projects be efficiently and cooperatively developed and realized.
We are pleased to have been able to provide an insight into this topic through the seminar and would like to warmly thank the BFW Regional Association North and Hamburger Feuerkasse Versicherungs AG for their support.
Are you planning a construction project or would you like your urban development contracts to be drafted in a legally secure manner?

The error-free and valid adoption of development plans often presents a major challenge for the planning municipalities. Not least due to the large number of regulatory subjects in land use planning, the speed and complexity of urban development and the high density of statutory provisions, development plans frequently suffer from substantive and/or formal errors, which can also result in their overall invalidity.

KFR – Kanzlei für Real Estate explains the recent decision of the Hamburg Higher Administrative Court (OVG) and its significance for land use planning.

Background of the decision

This is also illustrated in the recent decision of the Hamburg Higher Administrative Court (judgment of 10 December 2019, Az. 2 E 24/18). The OVG declared invalid the statutory ordinance on a development plan whose provisions exceeded the upper limits established in § 17 para. 1 BauNVO.

According to the OVG’s findings, the upper limits for determining the extent of building use are strictly binding for the land use planning of municipalities. An exceedance is only permissible in narrowly defined exceptional cases where the conditions of § 17 para. 2 sentence 1 BauNVO are met.

The case: Development plan with excessive provisions

According to the OVG’s findings, no such exceptional case existed in the case to be decided, so that the exceedance of the upper limits for the site coverage ratio and floor area ratio was not justified and was inadmissible.

The applicant challenged a development plan by way of an application for judicial review of subordinate legislation, which designated, among other things, an area in which his property was also located as a mixed-use zone.

The following had been stipulated:

• a site coverage ratio of 1.0,
• a floor area of no more than 3,900 sqm and
• a maximum building height of 42.5 m.

The applicant considered the development plan to be defective in its weighing of interests, as it would lead to unreasonable impairments. He therefore applied for the statutory ordinance on the development plan to be declared invalid. With success.

Strict adherence to § 17 para. 1 BauNVO

The strict binding of planning authorities to the upper limits established in § 17 para. 1 BauNVO and the restrictive application of the exception provision of § 17 para. 2 sentence 1 BauNVO had already been the subject of a number of preceding higher court decisions and was now expressly confirmed once again by the OVG Hamburg.

Exceedances of the established upper limits are only permissible in special, narrowly defined exceptional cases and require justification corresponding to the conditions of § 17 para. 2 sentence 1 BauNVO. Pursuant to this provision, the upper limits may be exceeded for urban development reasons if

• the exceedance is offset by circumstances or is offset by measures
• through which it is ensured that the general requirements for healthy living and working conditions are not impaired and
• adverse effects on the environment are avoided.

Other reasons cannot justify any such exceedances.

Consequences for land use planning

A violation of the mandatory upper limits for the extent of building use generally leads to the unlawfulness of the provisions exceeding these limits and can – as in the case decided by the OVG Hamburg – in individual cases also result in the invalidity of the entire development plan.

The planning municipalities must therefore strictly comply with the established limits of § 17 para. 1 BauNVO or carefully examine and justify the existence of an exceptional case pursuant to § 17 para. 2 sentence 1 BauNVO in order to ensure error-free and legally valid land use planning.

The decision of the OVG Hamburg is discussed in more detail in an article by Dr. Henrik Kirchhoff and Carlotta Zimmermann (née Vohl) in the current issue NVwZ 2020, 639.

The OVG Lüneburg determined in interim legal protection proceedings against a development plan, with regard to the urban development contract concluded in this context and reviewed incidentally in the court proceedings, that the agreed assumption of maintenance costs for general public green spaces including integrated children’s play areas, a youth area and public street planting as well as compensatory areas, capitalized over 20 years, is likely to be invalid.

Background: Urban development contract and consequential cost provision

In the court’s assessment, the required causality between the project and the measure was lacking in the present case in this respect. The corresponding provision of the consequential costs agreement was invalid.

Requirements for causality

In addition to general remarks on the requirement of causality, the Senate expressly stated that “with regard to the costs of ongoing maintenance of public facilities: the further the maintenance period is extended into the future, the more difficult it becomes to construct a relevant causal connection.”

Admissibility of short-term cost assumptions left open

The Senate left open whether it is permissible, in the initial phase in which a municipality already incurs the full maintenance costs for a development area before it is utilized, to contractually impose these costs (at least) partially on the project developer. However, a time horizon of 20 years was in any case clearly excessive.

Maintenance of public green spaces as an urban development measure?

It was also left open whether the long-term maintenance of public green spaces can in principle still be regarded as an “urban development measure” within the meaning of § 11 para. 1 sentence 2 nos. 1 and 3 BauGB. The transfer of maintenance costs for public facilities would result in the municipality permanently receiving a (new) development area with the same fiscal advantages but without the financial burdens of its “existing development areas.”

Consequences for development plans and contracts

The invalidity of the consequential costs agreement in this respect also gave rise in the present case to a significant weighing deficiency in the development plan at issue in the proceedings, so that the latter was ultimately provisionally suspended.

Our conclusion

The decision once again demonstrates that strict requirements are to be placed on the causality requirement and that this represents a considerable risk for the validity of consequential cost agreements and not least also for the validity of the corresponding development plan.
Do you have questions on public law and construction law?

(VGH Munich, Decision of 20 January 2021 – Az.: 12 N 20.1706)
Another interesting decision on the topic of misuse of residential space. KFR – Kanzlei für Real Estate explains the key findings of the Munich Administrative Court of Appeal (VGH) and their significance for owners and municipalities.

Background of the decision

The decision of the VGH Munich clearly demonstrates that misuse prohibition law does not provide municipalities with any influence over the housing market, in particular the development of rental and property prices. The purpose of a misuse prohibition is solely the preservation of the total housing supply. The misuse prohibition is limited to the preservation of existing housing stock and aims at ensuring an adequate supply of housing for the population.

Limits of misuse prohibition law

With reference to decisions of the BVerfG and BVerwG, the VGH makes unmistakably clear that provisions exceeding these objectives constitute an impermissible interference with the owner’s right of disposal and private autonomy and are not covered by the statutory basis for authorization.

Replacement housing: No requirements as to type or rent level

With regard to the replacement housing to be offered for a misuse authorization, neither the type – i.e. rental or owner-occupied housing – nor the respective rent level or even the specific location within the municipal area can therefore be relevant.
The complete case commentary by Dr. Henrik Kirchhoff and Carlotta Zimmermann (née Vohl) can be found in the current issue IMR 2021, 126.

In its judgment of 4 July 2019, the European Court of Justice (ECJ) declared the binding fee law regarding the minimum and maximum rates of the Fee Structure for Architects and Engineers (HOAI) to be inadmissible.
KFR – Kanzlei für Real Estate explains the background, the consequences and what the ruling means for practice.

Background: Services Directive and fee law

Since 2006, Article 15 para. 2 g of the so-called “Services Directive” (2006/123/EC) has provided that the member states of the European Union must review national provisions regulating “compliance with fixed minimum and/or maximum prices by the service provider”. Such provisions are only permissible

• if they are justified by an “overriding reason in the public interest” and furthermore
• are also proportionate.

The background to this is to ensure the free movement of services within the Union, i.e. in particular, market entry through price competition should not be made more difficult for providers from other member states.

Action by the European Commission against Germany

The European Commission sees no overriding reason in the public interest for the binding minimum and maximum rates for architectural and engineering services and therefore brought an action against the Federal Republic of Germany before the ECJ.
In the outcome, the ECJ – as had the Advocate General before it – followed the position of the European Commission. The ECJ bases its ruling essentially on the following three arguments:

• the HOAI violates the freedom of establishment,
• the minimum fees are not suitable for ensuring quality and
• the maximum fees are disproportionate.

The Federal Republic of Germany now has one year to implement the ECJ’s ruling, i.e. to adopt new, effective fee law provisions.

What are the consequences of the ECJ’s ruling?

The ECJ has by no means – as has sometimes been incorrectly reported in the press – “buried” the HOAI. Only the binding fee framework in § 7 para. 1 HOAI in its current version was declared inadmissible and therefore invalid, which means it is no longer applicable with immediate effect. This has no influence, however, on the formal requirements in § 7 and the legal consequences in § 7 para. 5. Furthermore, the parties remain free to agree on the minimum and maximum rates set out in the HOAI.
The service profiles of the HOAI with reference to the corresponding annexes also continue to apply where agreed upon by contract. By contrast, in the context of a procurement procedure, tenders that fall below the minimum rates or exceed the maximum rates may no longer be excluded.

Implications for fee top-up claims

With regard to so-called “fee top-up claims” in cases of fee agreements below the minimum rates, since the courts are also no longer permitted to apply the binding fee law, these will in all likelihood be dismissed.
Otherwise, it remains to be seen how the legislature will respond to the ECJ’s ruling. Until then, with the exception of the minimum and maximum rates, the following applies: reports of death have been greatly exaggerated!