Against this backdrop, there are numerous legislative changes and proposals, some of which have been initiated by the federal government or the state governments and some of which are prescribed at European level.

This weekly blog is intended to help keep track of the most important developments, particularly from an international perspective.

WEEK 4:

• What’s new on the German property market?

Since 27th February 2024, the funding for the replacement of heating systems as part of the heating transition has also been launched. If you can’t or don’t want to wait for heat planning, you can find out more here:

https://www.bundesregierung.de/breg-de/schwerpunkte/klimaschutz/neues-gebaeudeenergiegesetz-2184942

• What’s going on in Hamburg?

The Gänsemarkt neighbourhood in the centre of Hamburg is to be given a third Business Improvement District (BID), meaning it is to be further upgraded.

You can read about it officially here:

https://www.hamburg.de/pressearchiv-fhh/18265194/2024-02-27-bsw-bid-gaensemarkt/

What are BIDs anyway and what are they for?

Business Improvement Districts are intended to increase the attractiveness of a so-called innovation area as a retail, service and commercial centre.  However, this is not done using state funds, but on the basis of a municipal levy collected from the property owners. Important: the upgrading is carried out by the resident owners and tenants (i.e. tradespeople) themselves and for a limited period (of a maximum of eight years). The instrument is very popular in Hamburg and has been used since 2005.

The current legal basis can be found here:

https://www.hamburg.de/contentblob/16861610/0db81d5615c7298551c625a735ffd1dc/data/gspi-2022-gesetzestext.pdf

• And what is the case law doing?

The BGH has made an important decision in property development law that puts an end to a long-running dispute. The problem with a property development contract is that it consists of two elements: a purchase contract and a contract for work and services. This raises the question of whether the remuneration in such a contract should also be split. However, this is generally not the case (unless expressly stipulated in the contract). Rather, a uniform claim to remuneration is to be assumed.

So far so good, but this raises the question of when this claim to remuneration becomes time-barred – after the regular three-year limitation period or, like the claim to transfer of ownership, only after ten years (Section 196 BGB)? The difference is striking. And how did the BGH decide? The claims are all time-barred after ten years. It certainly doesn’t hurt to have heard that, especially if you are active in the business (see BGH, 7.12.2023 – VII ZR 231/22).

Der Beitrag R-E-B-U-I-L-D – weekly erschien zuerst auf TYSKRET.

Against this backdrop, there are numerous legislative changes and proposals, some of which have been initiated by the federal government or the state governments and some of which are prescribed at European level.

This weekly blog is intended to help you keep abreast of the most important developments, particularly from an international perspective.

WEEK 3: 

• What’s new on the German property market?

The subsidy programmes for climate-friendly new builds (CFN), age-appropriate conversions and cooperative housing were launched again at the end of last week. A total of 762 million euros has been made available for the CFN programme. Funding is available for new builds and first-time purchases of newly constructed climate-friendly and energy-efficient residential and non-residential buildings that fall below specific limits for greenhouse gas emissions over their life cycle and meet the energy standard of an Efficiency House 40 / Efficiency Building 40 for new builds. Applications can be submitted to the Kreditanstalt für Wiederaufbau (KfW).

Further details can be found at

https://www.bmwsb.bund.de/SharedDocs/pressemitteilungen/Webs/BMWSB/DE/2024/02/Foerderprogramme.html

• What’s going on in Hamburg?

It was a real bombshell: last week, the Free and Hanseatic City of Hamburg exercised its right of first refusal for the first time in a share deal.

You can read about it officially here:

https://www.hamburg.de/nachrichten-hamburg/18244758/stadt-hamburg-zieht-erstmals-vorkaufsrecht-bei-share-deal/

Why is this important?

The share deal, i.e. the sale of shares in a company instead of the property, has long been a thorn in the side of many. The main driver of this model is the avoidance of real estate transfer tax. Although the conditions have been tightened in recent years, it is still widespread.

What is a right of first refusal?

A pre-emptive right includes the right to enter into a purchase agreement as a buyer. Cities and local authorities regularly have such rights when selling property and often make use of them. In the case of share deals, it was previously disputed whether such a right even existed. However, as a legal dispute was avoided, the question has not been conclusively answered by the above case. Nevertheless, the development is exciting, as it is likely to set an example.

• And what is the case law doing?

The decision of the BGH is somewhat older, but important and should therefore be mentioned here. It confirms a principle that many property sellers rarely take to heart. Keep your eyes open – not only when buying a house, but also when selling. If I am obliged to provide information, I should also fulfil my obligations.

The BGH dealt with the sale of commercial property in Hanover, where the seller only provided crucial information about upcoming renovation work in a digital data room shortly before the contract was signed (three days before). The purchase price was 1.525 million euros, while the estimated refurbishment costs totalled up to 50 million euros. The BGH ruled that the mere provision of the documents without explicit reference was not sufficient to fulfil the duty of disclosure. There is a risk of rescission due to fraudulent misrepresentation, claims for damages, etc. It is therefore worthwhile to exercise a high degree of due diligence, which in case of doubt is not satisfied by the mere provision of information. There is a genuine duty to provide information (BGH, judgement of 15.9.23, V ZR 77/22).

Der Beitrag R-E-B-U-I-L-D – weekly erschien zuerst auf TYSKRET.

Mark Unger and Maximilian Juncker have been part of our team for over 5 years. Mark primarily works in commercial and private landlord and tenant law and real estate law and other real estate related topics, as can be read in detail here. Maximilian is our expert in employment law, helping to navigate the sometimes quite sharp pitfalls of German employment law, not only for our Scandinavian clients. In addition, he works out solutions for all questions in cross-border commercial and corporate law. You can find out more about him here.

In the course of this, we have also changed the name of the law firm a little – now we are called, as we already appear on the web – at www.tyskret.com you can have a closer look at the new homepage and the new logo. 

We look forward to continue our cooperation with you!

Med venlig hilsen

Dr. Axel Röpke, Christoph Schulze, Dr. Matthias Lass, Dr. Mark Unger und Maximilian Juncker

Der Beitrag On our own account: New year, new Beginnings – new partners and a new name at Tyskret Sagawe & Klages erschien zuerst auf TYSKRET.