"Massive damage": City of Regensburg "forgets" important drinking water pipe when selling the property

Created: 09/13/2022, 21:28

By: Stefan Aigner

New building at Wöhrdstraße 55. The property cost the client dearly.

Does the city have to pay damages?

© Stefan Aigner

A lawsuit that will soon be brought before the Regional Court of Regensburg reveals the city's astonishingly lax approach to important drinking water pipes.

Regensburg - It was good news for Stadtbau GmbH.

An impressive price was achieved for a property that the residential construction subsidiary of the city of Regensburg offered for sale in 2016 against the highest bid.

2016: Good business for the Regensburg housing association

Ring Wohnbau GmbH shelled out over two million for the approximately 1,100 square meter area at Unterer Wöhrd, a square meter price of around 2,000 euros.

But now this real estate deal is occupying the district court of Regensburg.

The developer is suing for damages - according to reports, it is about a sum in the high six-digit range.

The legal dispute reveals at least a sloppy handling of the city of Regensburg with the local drinking water supply.

But it also raises the question of how far the shifting of responsibility can go and it leaves a stale aftertaste with regard to the equal or unequal treatment of building investors in Regensburg.

Lucky coincidence prevents possible damage to an important drinking water pipe

When Ring Wohnbau GmbH acquired the site at the end of 2016, given the price of the land, it was clear that no particularly inexpensive apartments would be built here.

The first offers that came onto the market at the time were just under 7,000 euros per square meter.

A four-story building should be permitted on the site.

When the planning was finished in 2018 and the first excavators started rolling, it was a happy coincidence that the construction company found out that there was an important pipe for the drinking water supply of the Regensburg population under their property.

"Forgotten" drinking water pipe supplies a third of the people of Regensburg

During an on-site appointment, the architect of the construction company met employees of REWAG, also a municipal subsidiary, who were to carry out work on this main water pipe (diameter: around half a meter).

According to various statements from those around REWAG, about a third of Regensburg's drinking water supply depends on this line.

But Ring Wohnbau GmbH knew nothing about this line, which ran through the middle of their newly acquired property.

She was not informed of this at the time of purchase and she is not listed in the plans submitted to the company.

"Forgotten" drinking water pipe: developer has to change plans and calculations

Apparently, the city of Regensburg made a mistake, which had transferred the property to its residential construction subsidiary Stadtbau in 1993 in order to improve its capital base.

However, the Stadtbau was neither informed about this pipe nor, as actually necessary, was a corresponding easement for the drinking water pipe entered in the land register.

And so the coincidental meeting of the architect and REWAG on the one hand fortunately meant that the line became known before the construction work began and it could have been damaged in the process.

However, Ring GmbH now had to completely replan and change its calculations.

"Massive financial damage" due to rescheduling

According to a recent company press release, laying this line would have cost around two million euros.

An amount that would have almost doubled the price of the land and driven up the prices for the apartments to such an extent that they would hardly have been salable.

It was therefore “decided to reschedule the construction project and to accept a significant reduction in the size of the basement” in order to ensure that the line would remain on the property, according to the press release.

The start of construction for the (now completed) building was significantly delayed as a result.

In addition, the purchase contracts for several apartments had already been notarized at that time.

The statement speaks of “massive financial damage”.

It should be about three quarters of a million euros.

"Years" of attempts at agreement: the city of Regensburg is becoming stubborn

In their own words, they first sought talks with Stadtbau and the city of Regensburg, according to the press release from Ring Wohnbau GmbH.

But on several dates - there is talk of "years-long" negotiations - no agreement was reached.

No one from Stadtbau took part and there was apparently no concession from city officials.

"That's why unfortunately we only had to take legal action."

"Forgotten" drinking water pipe: Nobody wants to be responsible

While Ring argues that the city is actually obliged by the concession contract to ensure that REWAG's management rights are documented and secured in the relevant documents when selling land, the city and urban planning seem to shift the responsibility for this omission onto each other.

According to Stadtbau, they didn't know anything about the line and therefore couldn't inform the buyer about it.

The city apparently argues that it has long since ceased to be their property and the matter is therefore probably statute-barred anyway.

You don't want to pay any kind of compensation.

Whether this strategy is successful remains to be seen in court.

Urban neglect caused higher housing prices

If Ring Wohnbau GmbH hadn't been a company that has been active for several decades, this approach could have been crowned with success.

A loss in the high six-figure range can also be life-threatening in this industry - and an insolvent company no longer complains.

It also remains completely unclear whether Ring didn't even pay extra for this construction project in view of this damage.

When asked, the managing director is silent on this subject.

All of this also had consequences for later apartment buyers in the property.

In view of the delays and the resulting increase in construction costs, the purchase price for their apartments – according to publicly available offers – also rose by almost 1,000 euros.

(By the way: Our brand new Regensburg newsletter will keep you regularly informed about all the important stories from the World Heritage city and the Upper Palatinate. Register here.)

Real estate transactions in Regensburg: Are some entrepreneurs the same?

The city's approach, which wants to avoid paying damages for its failure to do so at all costs, is diametrically different from what it did when it sold a property a few years earlier.

The buyer of this almost neighboring property, also on Wöhrdstraße, was the "Immobilien Zentrum Regensburg", at the time an active supporter of the election campaign of CSU Mayor Hans Schaidinger.

Land in the same location at a bargain price for another company

At the end of 2009, the city stopped a tender for this plot of land with more than 30 interested parties, citing a questionable and controversial right of first refusal, gave it to the IZ for a bargain price of 500 euros per square meter and also participated with a five-digit amount in the architectural competition for the later construction.

Incidentally, the land value for land in this area, as determined by experts, was 1,000 euros at the time, only slightly lower than that for the area that was sold to Ring GmbH in 2016.

"Purely statistical values," it said back then, in 2010, from the city on request.

The value of a property must be determined on the basis of the location and "specific properties".