A federal court has again overturned a regulation intended to protect tenants in Berlin. The Federal Administrative Court declared the right of first refusal for real estate to be partly unlawful. With the right of first refusal, the district administrations want to prevent houses in protected urban areas from being bought up by large real estate companies and then possibly increasing rents or converting the apartments into property. In the spring, the Federal Constitutional Court had already stopped the so-called rent cap in Berlin. With this regulation, the rents for 1.5 million apartments were frozen for five years.
The verdict was “a bitter blow in the fight against speculation with living space,” commented Florian Schmidt, City Councilor of the Greens in the Friedrichshain-Kreuzberg district. This applies not only “in Berlin, but also in all other cities”. Schmidt had used the right of first refusal particularly frequently in recent years. Berlin’s Senator for Urban Development and Housing, Sebastian Scheel (left), called the judge’s verdict a “catastrophe”. “The decision of the Federal Administrative Court leaves me stunned.”
In a nationwide comparison, rents in Berlin have increased the most in percentage terms in recent years. At the same time, the average income is significantly below that of other large cities in Germany. In a referendum, almost 60 percent of Berliners voted to expropriate large housing companies. The expropriations and the drastically rising rents are also a central issue in the coalition negotiations between the SPD, the Greens and the Left.
Guessing alone is not enough
In the current case, a real estate company sued against the use of the right of first refusal on a house with 20 apartments in Friedrichshain-Kreuzberg. So it had failed before two courts in Berlin, the Federal Administrative Court in Leipzig has now granted the lawsuit (Ref .: BVerwG 4 C 1.20). In their justification, the judges stated that a right of first refusal should not be exercised on the assumption that the private buyer might increase rents in the future or convert rental apartments into condominiums. The mere assumption that tenants could be displaced from milieu protection areas in this way is not enough.