The Federal Administrative Court (BVerwG) has partially overturned the right of first refusal for real estate in Berlin and thus upheld the complaint of a real estate company. The right of first refusal is normally intended to ensure that houses are not bought up and tenants move away - for example, due to renovation measures that result in higher rents.
In the present case, the real estate company had filed an action against the exercise of the municipal right of first refusal. It had acquired an apartment building in the Berlin district of Friedrichshain-Kreuzberg containing 20 rental apartments and two commercial units. The apartment building is located on a plot of land that, according to the BVerwG, serves to protect the preservation of the composition of the residential population for special urban development reasons. This practice is also known as "milieu protection statutes." The lawsuit was unsuccessful in the lower courts, but was successful before the BVerwG.
The court justified its decision by stating that according to Section 26 No. 4 Alt 2 of the Building Code, "the exercise of the right of first refusal [is] excluded if the property is built on and used in accordance with the objectives or purposes of the urban development measures and a building structure erected on it does not exhibit any deficiencies or defects [...]". The German Tenants' Association criticizes this: "In other words, the municipality may only assert the right of first refusal even in the milieu protection area if the property is a junk property that is not used for its intended purpose.
Sources: BVerwG/Tenant Association/Wavepoint
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