Real Estate Law
1.1 Please briefly describe the main laws that govern real estate in your jurisdiction. Laws relating to leases of business premises should be listed in response to question 10.1. Those relating to zoning and environmental should be listed in response to question 11.1.
Real estate is mainly governed by the Civil Code (Bürgerliches Gesetzbuch), the Hereditary Building Rights Act (Gesetz über das Erbbaurecht), the Condominium Act (Gesetz über das Wohnungseigentum und das Dauerwohnrecht), the Land Registration Code (Grundbuchordnung), the Notarisation Act (Beurkundungsgesetz) and the Capital Investment Act (Kapitalanlagegesetzbuch).
1.2 What is the impact (if any) on real estate of local common law in your jurisdiction?
Local common law has no specific impact on real estate law as the German legal system is a codified system of law. The German judiciary interprets and applies the law, rather than mainly relying on precedents from prior cases as in a common law system.
1.3 Are international laws relevant to real estate in your jurisdiction? Please ignore EU legislation enacted locally in EU countries.
International laws are not relevant to real estate.
2.1 Are there legal restrictions on ownership of real estate by particular classes of persons (e.g. non-resident persons)?
No, there are no such special legal restrictions. In principle, each person or entity with legal capacity is entitled to ownership. However, certain restrictions may apply with regard to regulated investment companies.
Real Estate Rights
3.1 What are the types of rights over land recognised in your jurisdiction? Are any of them purely contractual between the parties?
There is a significant difference between purely contractual rights and rights in rem (dingliche Rechte). The main rights in rem are (co-)ownership (Miteigentum), condominium ownership (Wohnungseigentum), hereditary building rights (Erbbaurechte), ground easements (Grunddienstbarkeiten), limited personal easements (beschränkt persönliche Dienstbarkeiten), usufructs (Nießbrauchsrechte), registered leases (Dauernutzungsrechte), in rem pre-emptive rights (dingliche Vorkaufsrechte), conveying rights to recurrent payments or services (Reallasten), mortgages (Hypotheken) and land charges (Grundschulden).
3.2 Are there any scenarios where the right to a real estate diverges from the right to a building constructed thereon?
Yes, under the Heritable Building Rights Act, the right to a real estate may diverge from the right to a building constructed thereon. The beneficiary of a heritable building right holds the right to own and use a building constructed on the land, whereas the land is owned by a different person or entity. It is a limited temporary right in rem and can be bought, sold and even inherited, as well as also be encumbered with easements, etc. The owner of the underlying real estate is generally paid a ground rent or a non-recurring lump-sum.
System of Registration
4.1 Is all land in your jurisdiction required to be registered? What land (or rights) are unregistered?
No. Land of the Federal Republic, the municipalities, the federal states, other local government associations, churches, monasteries, schools, watercourses and public ways, as well as the land dedicated to a railway company serving public traffic, is unregistered unless the owner/beneficiary applies for registration.
4.2 Is there a state guarantee of title? What does it guarantee?
No, there is no state guarantee of title. However, the law confers public faith in the land register, i.e. that every person can in general rely on the correctness and completeness of the information provided unless otherwise proven or known or unless an objection notice (Widerspruch) is registered. However, such public faith does not apply to the description of the land (e.g. size and location).
4.3 What rights in land are compulsory registrable? What (if any) is the consequence of non-registration?
All rights in rem need to be registered. A non-registration means that such rights in land remain without in rem effect.
4.4 What rights in land are not required to be registered?
Statutory rights, such as statutory pre-emptive rights and restraints on disposal, are not subject to registration. Furthermore, solely contractual rights, such as lease rights which are not additionally secured by a right in rem, are not required to be registered.
4.5 Where there are both unregistered and registered land or rights is there a probationary period following first registration or are there perhaps different classes or qualities of title on first registration? Please give details. First registration means the occasion upon which unregistered land or rights are first registered in the registries.
No. Probationary periods regarding first registrations, as well as different classes or qualities of title on first registration, do not exist.
4.6 On a land sale, when is title (or ownership) transferred to the buyer?
Ownership is transferred to the buyer upon registration of the transfer of title in the land register.
4.7 Please briefly describe how some rights obtain priority over other rights. Do earlier rights defeat later rights?
The priority of rights registered depends on the order and time of registration. The priority regarding rights registered in the same division depends on the order of registration, whereby the order of registration generally depends on the order that the application for registration is filed. It is, however, also possible to register rights with the same order of priority or to determine the rank between rights within a division of the land register. The priority of rights registered in different divisions depends on the date of registration. Rights registered on the same date have the same order.
The Registry / Registries
5.1 How many land registries operate in your jurisdiction? If more than one please specify their differing rules and requirements.
There is no central land registry. Except for the Federal State of Baden-Wuerttemberg, the land registers are kept by the local courts; however, even they will be integrated gradually into the local courts by the end of 2017. Each land registry is responsible for the land located in its specific district. Registration procedures are the same for all land registered as they are governed by federal law (the Land Registration Code).
5.2 Does the land registry issue a physical title document to the owners of registered real estate?
No; however, a land register excerpt can be issued in order to prove ownership to third parties.
5.3 Can any transaction relating to registered real estate be completed electronically? What documents need to be provided to the land registry for the registration of ownership right? Can information on ownership of registered real estate be accessed electronically?
No, a transaction cannot be completed electronically.
The following documents shall be provided to the land registry:
- notarised conveyance of ownership (Auflassung);
- clearance certificate (Unbedenklichkeitsbescheinigung) issued by the tax authority regarding the payment of real estate transfer tax (RETT); and
- declaration by the competent public authority regarding the waiver of statutory pre-emptive rights or the non-existence of such rights.
An additional permission according to the Real Estate Transaction Ordinance (Grundstückverkehrsordnung) is required in certain states.
Most of the land registries enable electronic inspections of the land register to accelerate land register proceedings.
5.4 Can compensation be claimed from the registry/registries if it/they makes a mistake?
Compensation can only be claimed on the basis of government authority liability (Amtshaftung). The requirements to be fulfilled for such claims are very strict.
5.5 Are there restrictions on public access to the register? Can a buyer obtain all the information he might reasonably need regarding encumbrances and other rights affecting real estate?
Yes. The land register is not publicly accessible. Only persons claiming a legitimate interest may inspect the land register. Such interest is established where the applicant provides objective reasons, which exclude the possibility that the inspection serves unauthorised purposes or is based on mere curiosity. A potential buyer may be granted inspection of the land register if he can prove that sales negotiations have already become sufficiently specific.
Real Estate Market
6.1 Which parties (in addition to the buyer and seller and the buyer’s finance provider) would normally be involved in a real estate transaction in your jurisdiction? Please briefly describe their roles and/or duties.
Real estate brokers and investment banks are often involved as advisors. Their roles vary and may also include a valuation of the asset.
Legal and tax advisors are usually involved in real estate transactions pursued by institutional or quasi-institutional investors. The buyer’s legal and tax counsel will conduct a legal and tax due diligence of the target and draft and negotiate the sale and purchase agreement of the transaction in cooperation with the corresponding advisors of the seller. In addition, the buyer will usually engage technical and environmental advisors.
The conclusion of a sale and purchase agreement requires notarisation; this is why a notary public gets involved at a certain stage of the transaction. The notary also supervises the satisfaction of conditions precedent to the validity of the agreement and the maturity of the purchase price, as the case may be, and can also be entrusted with additional obligations necessary for the sale and purchase agreement to become effective.
6.2 How and on what basis are these persons remunerated?
Brokers and investment banks are usually paid on a lump sum basis. Lawyers and tax advisors are usually paid by the hour, technical and environmental advisors usually by man days. Parties often agree on lump sum arrangements. Notaries are remunerated according to the statutory provisions of the Code on Court and Notary Costs (Gerichts- und Notarkostengesetz).
6.3 Do you feel there is a noticeable increase in the availability of capital to finance real estate transactions in your jurisdiction, whether equity or debt? What are the main sources of capital you see active in your market?
We have again seen a significant increase in the availability of capital over the last 12 months and Brexit may lead to further increase. Sources of capital have become more diverse; institutional investors, family offices and funds companies dominate the equity side, and equity is available for all sorts of investment, whether in listed real estate, funds or joint-venture structures, or as direct investment. The same sort of investors increasingly act on the debt side and offer mezzanine and sometimes senior debt capital at often attractive terms, and have become serious competitors of traditional real estate finance and mortgage banks.
6.4 What is the appetite for investors and developers in your region to look beyond primary real estate markets and transact business in secondary or even tertiary markets? Please give examples of significant secondary or tertiary real estate transactions, if relevant.
Investors increasingly look at and transact in B-City and C-City locations, as well as accepting higher risk by investing into developments and more complex real estate schemes, all with a view to increase returns and reduce competition for scarce product, at least in the core segment.
6.5 Have you observed any trends in particular market sub sectors slowing down in your jurisdiction in terms of their attractiveness to investors/developers? Please give examples.
Price levels are generally perceived as high but we have not observed any slowdown in activity as a result. The relatively high price levels appear to be acceptable for many investors as there is a general expectation that interest rates remain low and the demand relatively stable across all asset classes.
Liabilities of Buyers and Sellers in Real Estate Transactions
7.1 What (if any) are the minimum formalities for the sale and purchase of real estate?
The minimum formalities are the conclusion of a notarised sale and purchase agreement as well as the registration of the transfer of ownership in the land register. The sale and purchase agreement has to contain the key terms of the transaction (i.e. names and addresses of the parties, description of the object of purchase, purchase price, etc.) and the consenting declarations of both parties regarding the transfer of ownership.
7.2 Is the seller under a duty of disclosure? What matters must be disclosed?
A duty of disclosure is not explicitly regulated by statutory law. However, the seller is obliged to act in accordance with the principle of good faith, which implies specific duties of the seller. Thus, the seller should disclose any information that is of real significance for a reasonable buyer’s purchase decision and for which disclosure can be expected under prevailing commercial practice. This would usually include disclosure of material or legal defects.
7.3 Can the seller be liable to the buyer for misrepresentation?
The seller can be liable for misrepresentation. Even if a buyer would exceptionally accept a contractual limitation of such liability, the seller could nevertheless be liable in the event of fraudulent or wilful misrepresentation.
7.4 Do sellers usually give contractual warranties to the buyer? What would be the scope of these? What is the function of warranties (e.g. to apportion risk, to give information)? Are warranties a substitute for the buyer carrying out his own diligence?
In general, sellers would try to exclude contractual warranties. However, in most transactions the seller will accept certain contractual warranties where circumstances cannot be finally clarified or assessed in the buyer’s due diligence. Such warranties usually serving to apportion risks often relate to title and encumbrances, hidden defects, lease agreements, public law and environmental aspects. In general, warranties should not be a substitute for the buyer carrying out his own due diligence as it is not unlikely that warranty claims will only be realised by way of time-consuming legal disputes.
7.5 Does the seller warrant its ownership in any way? Please give details.
As the buyer can rely on the correctness of the land register, there is in general no need for such warranty where the buyer buys from the registered owner. The land register will usually be checked by the notary prior to notarisation. However, if the seller is not registered as owner in the land register, he would usually warrant ownership in the sale and purchase agreement.
7.6 What (if any) are the liabilities of the buyer (in addition to paying the sale price)?
Besides his obligation to pay the purchase price, the buyer is usually liable to pay all transaction-related costs, such as the RETT, the notary fees, the fees for registrations in the land register, etc.
Finance and Banking
8.1 Please briefly describe any regulations concerning the lending of money to finance real estate. Are the rules different as between resident and non-resident persons and/or between individual persons and corporate entities?
The Civil Code contains the main regulations, whereas the Banking Act (Kreditwesengesetz) contains provisions with respect to the supervision of banks by the competent supervisory authority (i.e. BaFin). The regulations do not differ between residents and non-residents but provide for different levels of protection, especially when it comes to consumer protection laws.
8.2 What are the main methods by which a real estate lender seeks to protect itself from default by the borrower?
Mainly property financings are secured by either an accessory mortgage or the more commonly used non-accessory land charge. In addition, security is provided by assignment of rents or other receivables (including claims against insurers or guarantors), as well as pledges over bank accounts and the shares of the borrower and/or the general partner of the borrower in case the borrower is a limited partnership.
8.3 What are the common proceedings for realisation of mortgaged properties? Are there any options for a mortgagee to realise a mortgaged property without involving court proceedings or the contribution of the mortgagor?
Enforcement may be subject to the procedural rules governing compulsory enforcement of charges on property. It is common that the borrower submits himself by way of a notarial deed to immediate enforcement action. Nevertheless, the competent local court is always involved when it comes to enforcement, since the foreclosure sale is carried out and the administrative receiver is appointed and supervised by it.
8.4 What minimum formalities are required for real estate lending?
The loan agreement must at least provide for the so-called “essentialia negotii” (i.e. loan amount, term, interest rate, etc.). In addition, agreements with consumers must be concluded in writing and provide for a statutory right of revocation in favour of the borrower. A mortgage or land charge has to be recorded by a notary and registered in the land register.
8.5 How is a real estate lender protected from claims against the borrower or the real estate asset by other creditors?
In case of pending insolvency proceedings, the creditors already secured by a mortgage or land charge prior to the opening of such proceedings are accorded preferential treatment. The proceeds from a public auction will therefore be distributed to the security holders (in the order of their ranking in the land register) and are independent from the insolvency proceedings. If the secured creditor has not been satisfied in full by the proceeds, it is still possible to submit the outstanding claim to the insolvency administrator.
9.1 Are transfers of real estate subject to a transfer tax? How much? Who is liable?
The purchase of real estate is subject to Real Estate Transfer Tax (RETT). The tax rate depends on the federal state where the object of purchase is located and currently varies from 3.5 to 6.5%. The tax base for asset deals is the purchase price. According to statutory law, both parties are liable for the payment of RETT; however, the parties usually contractually stipulate that RETT shall be borne by the buyer. In case RETT becomes due because 95% or more of interests in a real estate holding partnership are transferred, RETT is payable by the partnership itself.
9.2 When is the transfer tax paid?
RETT is generally triggered as of notarisation of the sale and purchase agreement (i.e. purchase price payment is no precondition). In case RETT becomes due because 95% or more of interests in a real estate holding partnership are transferred, RETT is triggered upon transfer of partnership interest. The notary, the seller and the buyer have a statutory obligation to report the sale and purchase agreement to the tax authorities. This is also true in case shares or interests in property holding companies or partnerships are directly or indirectly transferred and RETT is triggered. After the tax office issues a RETT assessment, the tax is in general payable within one month of receipt. Where the sale and purchase agreement itself is subject to a condition precedent, RETT only becomes due upon the fulfilment of such condition. The new owner will be registered in the land register only after payment of the RETT (not relevant in a share deal scenario).
9.3 Are transfers of real estate by individuals subject to income tax?
If the property was held as a private asset for 10 years or less, income from the sale is generally subject to income tax and solidarity surcharge (progressive tax rate, in total up to 47.5%). After a holding period of more than 10 years, capital gains from private property sales are income tax free. In case the property is part of a business (for example, a real estate trading business) the income from the property sale is always subject to income tax (progressive tax rate, in total up to 47.5%) and trade tax (TT). Foreigners are generally not subject to TT if they are not German tax resident and do not have a permanent establishment with a real estate business in Germany. TT varies from 7% to 17% depending on the municipality; however, TT is creditable against income tax to a certain extent. Commercial trading will generally be assumed if more than three properties are sold within five years and the respective properties were held by the seller for less than 10 years.
9.4 Are transfers of real estate subject to VAT? How much? Who is liable? Are there any exemptions?
In general, the sale of real estate is either non-VATable or free of VAT. In case the property sold does not qualify as an independent business (for example, if a real estate is only sold partly), the seller may opt for VAT (rate 19%), permitting it to deduct input VAT on services received. The buyer is liable for VAT (reverse charge), but is allowed to deduct input VAT at the same time. Thus, there is, in general, no cash leakage.
9.5 What other tax or taxes (if any) are payable by the seller on the disposal of a property?
If the property was held by an individual, cf. question 9.3, there are no other taxes.
Corporations, mostly with limited liability (GmbH), selling real estate are exposed to Corporate Income Tax (CIT) and a solidarity surcharge (Solidaritätszuschlag) thereon at a total rate of 15.83%. Further, TT will be due, except if the company fulfils the prerequisites of the extended TT deduction. Foreign corporations are subject to CIT but not to TT, provided they do not have a permanent establishment or a place of management in Germany.
9.6 Is taxation different if ownership of a company (or other entity) owning real estate is transferred?
In the event of a disposal of real estate by way of a share deal, RETT will be due if the buyer (and related entities) acquires directly or indirectly 95% or more of the shares or interests in the entity holding the real estate. Further, RETT is triggered if 95% or more of the interests in a real estate holding partnership are transferred to new partners within a five-year period. In this case, RETT will be calculated based on the tax rate applied to a special tax value of the real estate which can be somewhat lower than the fair value depending on the nature of the real estate. While specific RETT blocker structures allowing for a transfer of economically more than 95% have been widely used in the past, such structures do not work any longer due to recent legislation. However, it is still possible to avoid RETT if a 5.1% shareholding in PropCo is retained with the seller or if the shares in PropCo are acquired by more than one (unrelated) party and no party acquires 95% or more in PropCo (not in case of a partnership where a transfer of 95% or more of the interests within a five-year period triggers RETT).
2) Income Taxes
If an individual sells shares in a property holding company (PropCo) which are held as private assets, in general, 60% of the capital gain is subject to income tax and solidarity surcharge (progressive tax rate, effectively up to 28.5% tax, Teileinkünfteverfahren). However, in case the individual holds less than 1% in PropCo the capital gain from the sale is subject to a special capital gains tax (Abgeltungsteuer) of 26.4% (incl. solidarity surcharge). Upon the sale of PropCo shares held by another corporation, regularly 95% of the gain is effectively tax-exempt. Only the remaining 5% will be subject to CIT and TT but, however, subject to certain restrictions (tax rate effectively approx. 1.5%). In case interest in a real estate holding partnership is sold, generally the taxation consequences are as if the seller would sell a fraction of the real estate (see questions 9.3 and 9.5 above, on transparent taxation of partnerships). Due to the complexity and variety of German tax law, it is strongly recommended to obtain specific tax advice.
Leases of Business Premises
10.1 Please briefly describe the main laws that regulate leases of business premises.
Such leases are mainly regulated by the Civil Code, which includes special provisions regarding General Terms and Conditions (Allgemeine Geschäftsbedingungen). In addition, there are some specific laws, e.g. regarding the legitimacy of indexation clauses or ancillary or heating costs.
10.2 What types of business lease exist?
There are residential leases (Wohnraummietverträge), leases regarding other assets (Mietverträge), leases regarding assets, inventory, rights or aggregated assets, such as restaurants, hotels or companies (Pachtverträge), and land leases (Landpachtverträge).
10.3 What are the typical provisions for leases of business premises in your jurisdiction regarding: (a) length of term; (b) rent increases; (c) tenant’s right to sell or sub-lease; (d) insurance; (e) (i) change of control of the tenant; and (ii) transfer of lease as a result of a corporate restructuring (e.g. merger); and (f) repairs?
(a) Length of term: Business leases are usually concluded for a fixed term and often contain prolongation options in favour of the tenant. The Civil Code limits the fixed lease term to a maximum of 30 years. If a lease agreement shall be concluded for a fixed lease term of more than one year, it has to comply with the statutory written form.
(b) Rent increases: Mostly business leases contain indexation clauses providing for a rent adjustment in accordance with the change of the Consumer Price Index. The validity of such clause requires that the lease is binding on the landlord for at least 10 years and that it includes a rent adjustment upwards and downwards. Instead of such indexation clause, business leases sometimes provide for a step-rent.
(c) Tenant’s right to sell or sub-lease: Usually, in business leases, the tenant shall not be entitled to sub-lease the lease object without the landlord’s prior written consent, and such consent is not to be unreasonably withheld.
(d) Insurance: The majority of business leases stipulate that the landlord must conclude a building insurance (fire, all risk, etc.) and often a landlord’s liability insurance. The tenant is usually required to conclude insurances regarding its business (liability insurance), inventories or goods.
(e) (i) Change of control of the tenant: Clauses relating to a change of control of the tenant are not very common in business leases. However, if the tenant is a subsidiary of a large group, the landlord may try to include such provision in the lease agreement.
(ii) Transfer of lease as a result of a corporate restructuring: Such clauses are also not very common. As a lease would usually be transferred by law in such an event, it is usually not necessary to agree upon such a specific provision.
(f) Repairs: As statutory law provides for the landlord to keep the lease object in a proper condition and to carry out repairs related to the usual use of it, business leases usually contain provisions according to which the tenant shall be responsible for repairs of the lease object and shall bear the costs of such repairs. Under most leases, the responsibility for maintenance and repair of roof and structure remains with the landlord.
10.4 What taxes are payable on rent either by the landlord or tenant of a business lease?
The revenue generated from rent is generally not subject to VAT. However, in order to enable the landlord to deduct input tax, the parties regularly opt for the rent to be subject to VAT in business leases by waiving the statutory exemption from VAT. Such option for VAT is only permissible to the extent that the service recipient uses or intends to use the property for purposes not excluding the deduction of input tax.
10.5 In what circumstances are business leases usually terminated (e.g. at expiry, on default, by either party etc.)? Are there any special provisions allowing a tenant to extend or renew the lease or for either party to be compensated by the other for any reason on termination?
If a business lease is concluded for an indefinite lease term, it can be ordinarily terminated by either party within the statutory termination periods (three to nine months). A business lease concluded for a fixed lease term can only be extraordinarily terminated in the event of default. The events of default are defined in the Civil Code and are all regularly contractually agreed upon. In the event of an extraordinary termination, the defaulting party is likely to be exposed to compensation claims from the other. There are no statutory provisions allowing the tenant to extend or renew the lease; however, many lease agreements provide for a prolongation option.
10.6 Does the landlord and/or the tenant of a business lease cease to be liable for their respective obligations under the lease once they have sold their interest? Can they be responsible after the sale in respect of pre-sale non-compliance?
In case of a transfer of the ownership of the lease object, the lease agreement is transferred to the buyer by statutory law. Unless otherwise agreed, the buyer will become the beneficiary of any rental securities. However, if the acquirer does not return such securities to the tenant at the end of the term or does not fulfil other obligations, the tenant may claim these from the original landlord. The tenant is usually not entitled to transfer his obligations.
10.7 Green leases seek to impose obligations on landlords and tenants designed to promote greater sustainable use of buildings and in the reduction of the “environmental footprint” of a building. Please briefly describe any “green obligations” commonly found in leases stating whether these are clearly defined, enforceable legal obligations or something not amounting to enforceable legal obligations (for example aspirational objectives).
A standard of a “green lease” has not yet been adopted. However, the Civil Code, as well as most lease agreements, contains provisions which may be qualified as “green” as they seek to promote greater sustainable use of the lease object and to reduce the “environmental footprint”. Further, the landlord shall be entitled to any measures leading to energetic modernisation or to a reduction of consumption of resources, and under certain circumstances even be entitled to increase the rent due to such measures. Further, leases usually contain provisions providing for operating costs to be allocated to the tenants in accordance with their consumption or causation.
Public Law Permits and Obligations
11.1 What are the main laws which govern zoning and related matters concerning the use and occupation of land? Please briefly describe them and include environmental laws.
Public building law is governed by various federal and state laws, such as the Federal Building Code (Baugesetzbuch), the Federal Ordinance on Land Use (Baunutzungsverordnung) and the Building Ordinances of the federal states (Landesbauordnungen). These regulations refer to actual building, zoning and planning requirements, as well as to requirements concerning the actual construction. The Soil Protection Act (Bundesbodenschutzgesetz) and relevant state regulations, complemented by the Soil Protection and Contamination Ordinance (Bodenschutz- und Altlastenverordnung), aim to sustainably protect and restore the soil’s function.
11.2 Can the state force land owners to sell land to it? If so please briefly describe including price mechanism.
Expropriation is regulated by the Constitution and shall only be permissible for the public good. The requirements of such expropriation are very high. Compensation shall be determined by establishing an equitable balance between the public interest and the interests of those affected.
11.3 Which bodies control land/building use and/or occupation and environmental regulation? How do buyers obtain reliable information on these matters?
The responsibility of public authorities for a matter depends on competence and jurisdiction; in general, the municipal building authority and environmental authority. Reliable information on these matters can therefore be obtained from the competent public authority on state, municipal or city level. When entering into sales negotiations, relevant documentation is commonly provided by the seller who requests such information from the competent authorities.
11.4 What main permits or licences are required for building works and/or the use of real estate?
The construction, change of use or change of a construction generally requires a building permit, unless otherwise stipulated by law. Building works and/or the specific use of a real estate may be subject to additional permits and licences, if specifically regulated by law.
11.5 Are building/use permits and licences commonly obtained in your jurisdiction? Can implied permission be obtained in any way (e.g. by long use)?
Yes. Building permits shall be granted if the construction project does not inflict with any public law provisions or rights of neighbours to be examined within the approval procedure. Implied permission is not commonly obtained; in particular, protection due to long-term use and/or continued existence is only acknowledged under very strict circumstances.
11.6 What is the appropriate cost of building/use permits and the time involved in obtaining them?
The charges for building/use permits are stipulated in the Construction Charges Ordinance (Baugebührenordnung) and depend on the extent of the construction project. According to the respective Building Ordinances (Landesbauordnungen) of each state, the building control authority shall generally give its decision on the construction application within one month after the full application documents have been provided.
11.7 Are there any regulations on the protection of historic monuments in your jurisdiction? If any, when and how are they likely to affect the transfer of rights in real estate?
The individual states are responsible for the protection of historic monuments and have enacted relevant state regulations. Reporting requirements are attached to the transfer of a historic monument when transferred.
11.8 How can e.g. a potential buyer obtain reliable information on contamination and pollution of real estate? Is there a public register of contaminated land in your jurisdiction?
Yes. Registries regarding contaminated and potentially contaminated surfaces and/or sites are kept at the competent soil conservation authorities. Information requests may either be made by the owner or by another party with the owner’s consent.
11.9 In what circumstances (if any) is environmental clean-up ever mandatory?
In general, environmental clean-up is mandatory in a situation which, with a sufficient degree of probability in an unhindered course of events, will result in damage. The applicable law depends on the kind of contamination and the time the deposition was completed.
11.10 Please briefly outline any regulatory requirements for the assessment and management of the energy performance of buildings in your jurisdiction.
The energy performance of buildings is assessed in energy performance certificates. These certificates contain general energy-related information with regard to the building, such as the energy source used for heating and the energy indices. Energy performance certificates are mandatory for all buildings according to the Energy Saving Ordinance.
12.1 Please briefly explain the nature and extent of any regulatory measures for reducing carbon dioxide emissions (including any mandatory emissions trading scheme).
The European Union and the Federal Republic of Germany, both contractual partners to the Paris Agreement, undertake to reduce greenhouse gas emissions and specify their own nationally determined contributions. International mechanisms, such as the European Union Emissions Trading System, are complemented by various regulations and incentive programmes on national level, e.g. the Renewable Energies Act (Erneuerbare-Energien-Gesetz), the Energy Saving Ordinance (Energieeinsparverordnung) and the National Climate Protection Initiative. In a nutshell, the different measures aim to promote the development of renewable energies and the improvement of energy efficiency.
12.2 Are there any national greenhouse gas emissions reduction targets?
Yes, in 2010, the parliament adopted the so-called Energy Concept 2050 which defines the greenhouse gas emissions reduction targets as follows: a 40% reduction by 2020; a 55% reduction by 2030; a 70% reduction by 2040; and an 80–95% reduction by 2050 (each corresponding to below 1990 levels).
12.3 Are there any other regulatory measures (not already mentioned) which aim to improve the sustainability of both newly constructed and existing buildings?
Yes. The Energy Saving Ordinance, for example, aims to save energy consumption in buildings by imposing various energy efficiency requirements. The Ordinance sets out different energy efficiency standards and measures for both newly constructed and existing buildings. The Ordinance further regulates the issuance of building energy performance certificates which contain the energy-related data of the building and serve the purpose of providing prospective tenants and buyers with the relevant information.