Commitment to social rents is limited in time

In social housing, real estate companies can be obliged to offer social housing for decades, but not indefinitely. The federal judges decided on Friday in Karlsruhe.

Said, now developed property in Langenhagen near Hanover

Dhe obligation of apartment owners to rent out government-subsidized social housing at a reduced price cannot apply indefinitely. Rather, the commitment ends when the financial benefits granted have been used up, usually after 15 years. The Federal Court of Justice (BGH) announced this judgment on Friday.

In the specific case, the city of Langenhagen (near Hanover) sold a plot of land to a building company in 1995 and granted cheap loans. In return, 52 social apartments were built and the city had a contract guarantee that the social connection of the living space is unlimited and that the apartments will only be rented to tenants with a certificate of eligibility.

When a housing company bought the building, they wanted to break away from the unlimited commitment and complained about the invalidity of the unlimited agreement. While the lower courts had dismissed the lawsuit, the BGH has now granted it. The unlimited notarial agreement is ineffective. The fact that the city sold the property to the company in addition to cheap loans could justify an extension of the bond, but nothing more.

As a justification, the BGH referred to the Housing Act, which provides for a time limit. In any case, it ends when the benefits granted by the state have been used up. The Higher Regional Court of Celle must now determine how high these are to be assessed in a specific case. It depends on whether the social bond does not apply. The case was therefore referred back to the OLG Celle again by the BGH. (AZ: V ZR 176/17)