Ban on converting rental flats into condominiums is coming

The governing coalition has agreed on a compromise on the Building Land Mobilisation Act. According to this, the controversial ban on the conversion of rental flats into owner-occupied flats in areas with tight housing markets is to be introduced in future.

In future, the state governments will be empowered to define areas as "tight housing markets". In these areas, the conversion of rented flats into owner-occupied flats can then in principle only take place with the approval of the authorities. The approval requirement is initially to apply until 31.12.2025. 

The conversion ban is described as an instrument for affordable housing. However, owners with few and small residential buildings are to continue to have the possibility to convert their rented flats into owner-occupied flats without permission. The exception applies to landlords of three to 15 flats - depending on the federal state. In addition, cases of inheritance are exempt from the conversion ban if the heirs want to use the flats themselves, or family members of the owner who want to move into the flats themselves. Conversion is also permissible if at least two-thirds of the current tenants want to acquire the condominiums, as well as in cases of economic hardship.

Critics complain that the ban on conversion has nothing to do with any form of building land mobilisation and acts like a Trojan horse within the new law. According to insiders, this kind of market regulation will even have the opposite effect of what was actually intended. Not only will prices for condominiums continue to rise, but so will flat rents. 

According to the law firm Bethge & Partner, which specialises in real estate law, this regulation represents a serious encroachment on the fundamental right to property. Anyone who owns a property in a sought-after residential location should act quickly now. 

(Photo: © Mrcolo, Pixabay)