Draft Regulation of the Bavarian State Government on Section 250 of the Federal Building Code – Formation of Condominiums in Areas with Tight Housing Markets
The provision of the still relatively new Section 250 of the German Federal Building Code (BauGB), which entered into force on June 23, 2021, opens up the possibility for the State governments to introduce a reservation of approval for the formation or division of residential property or part ownership pursuant to Section 1 of the Residential Property Law (Wohnungseigentumsgesetz, WEG) in areas with tight housing markets within the meaning of Section 201a sentence 3 and sentence 4 of the BauGB, by means of a statutory ordinance. The explanatory memorandum to the law states that the purpose of the provision is to limit the negative effects of conversions of rental apartments into condominiums in existing buildings and, at the same time, to maintain the supply of affordable rental apartments. However, Section 250 of the BauGB does not apply to new buildings.
Now, the Bavarian state government, too, intends to make use of the ordinance authorization of Section 250 para. (1) sentence 3 BauGB in Bavaria. This is shown by a draft ordinance of the Bavarian state government. If this ordinance comes into force, it will definitely affect the possibility of dividing existing buildings into condominiums.
Section 2 para. (1) sentence 1 of the ordinance concerns the reservation of approval for the areas listed in the annex to the ordinance, whereby this reservation of approval, according to Section 2 para. (1) sentence 2 of the ordinance, only applies to residential buildings in which there are more than ten apartments.
Thus, if there is an existing building to be subdivided into owner-occupied apartments in one of the areas listed in the ordinance and if there are more than ten apartments in it, the owner is entitled to the granting of approval pursuant to Section 250 para. (1) sentence 3 BauGB, only, if:
- the property belongs to a heritage, and condominium ownership or partial ownership is to be established for the benefit of co-heirs or legatees,
- the condominium or partial condominium is to be sold to members of the owner’s family for their own use,
- the condominium or partial condominium is to be sold to at least two thirds of the tenants,
- it is no longer reasonable to refrain from establishing condominium ownership or partial ownership, also taking into account the general welfare, or
- without such approval, claims of third parties to the transfer of condominium ownership or partial ownership cannot be met, for the securing of which a priority notice has been entered in the land register before the reservation of approval becomes effective.
This means that after the Ordinance comes into force, a division into condominuim ownership can only be enforced in these cases.
For the transitional period, the Ordinance provides for a cut-off date regulation: Applications for certificates of seclusion that have been received in complete form by the lower building supervisory authority by the day before the ordinance comes into force, but have not yet been decided, are to be exempt from the approval requirement in accordance with Section 2 para. (3) sentence 1 of the ordinance. The same applies to applications submitted to the land registry up to the day before the Ordinance comes into force. This clarification is made via Section 2 para. (3) sentence 2 of the Ordinance in conjunction with Section 878 of the German Civil Code (Bürgerliches Gesetzbuch, BGB).
The ordinance has not yet entered into force, i.e. the approval pursuant to Section 250 BauGB is still not (yet) applicable in Bavaria. It is uncertain when the Ordinance will be enacted.