Court leaves tenants in Munich in the lurch: right of first refusal only for junk property - "unsettling"

Heavy blow for tenant protection in Munich.

According to a court ruling, the city will only be able to exercise its right of first refusal if buildings are vacant or in need of renovation.

Munich - The Federal Administrative Court overturns the municipal right of first refusal in Munich.

According to the Munich tenants' association, the municipality will in future only be able to exercise its right of first refusal in conservation statute areas if the property is vacant or in need of renovation.

That would be a severe blow to the protection of the environment in the Bavarian capital.

In Munich there are 32 conservation statute areas for 192,000 apartments

In their maintenance statute areas, the administration has a right of first refusal in the event of an upcoming building sale.

The original prospective buyer can avoid this by signing a declaration of avoidance.

With this he undertakes, for example, to refrain from luxury renovations.

But the price for later new rentals is also capped.

In Munich there are now 32 conservation statute areas in which around 334,900 people live in 192,000 apartments.

In 2020, the city exercised its right of first refusal 21 times, and eleven declarations of avoidance were signed.

Munich: Judgment from Leipzig calls Munich practice into question

The whole system could now be called into question by the judgment of the Leipzig court. The judges had ruled in the lawsuit of a real estate company that had opposed the exercise of the municipality's right of first refusal in Berlin. The company had acquired a plot of land in the Friedrichshain-Kreuzberg district that was built on with an apartment building from 1889, in which there are 20 rental apartments and two commercial units. The property is within the scope of a milieu protection ordinance, which is comparable to the Munich conservation statutes. In Berlin, the district office has exercised the right of first refusal in favor of a state-owned housing association - in order to counter the risk that part of the resident population will be displaced from the area,if the apartments are upgraded and rents are increased or the rental apartments are converted into condominiums.

Federal administrative court overturns the right of first refusal in conservation statute areas - according to @DMB_Bayern @Mieterverein_M the city is only allowed to buy if it is a scrap property in which no or hardly any tenants live ". Would be a severe blow to the milieu protection # Munich (Photo: dpa) pic.twitter. com / gXFg8R4vo2

- Sascha Karowski (@skarowski) November 10, 2021

The justification, however, that the buyer intends to use future uses that contradict environmental protection is not sufficient to exercise the right of first refusal, say the Leipzig judges.

The right of first refusal is therefore excluded as long as the property is built on and used in accordance with the stipulations of the development plan or the objectives and purposes of the urban development measure and a structural system built on it does not show any grievances or defects.

Tenants' Association Munich speaks of worrying news

Spicy: The Higher Administrative Court had dismissed the lawsuit in the first instance and argued that the general public justified exercising the right of first refusal.

The Munich tenants' association speaks of unsettling news in connection with the recent judgment.

Managing director Volker Rastätter said: “That basically means: the municipalities are only allowed to exercise their right of first refusal in the preservation statute area if it is a scrap property in which no or hardly any tenants live.

It no longer matters whether it is clearly foreseeable that the residents will be displaced. "

OB Reiter wants to fight for new legislation if necessary

Mayor Dieter Reiter (SPD) wants to try everything to fight for effective legislation.

"I keep the conservation statutes and the associated right of first refusal for central tenant protection instruments that are available to us as a municipality.", Said the town hall boss.

Should the judgment actually have consequences for Munich after a corresponding legal examination of the written justification, he will try everything “to fight with the new federal government for even more effective tenant protection legislation”.