Anyone who deals with rental apartments and condominiums in Berlin will sooner or later stumble across the terms “conversion ordinance”, “milieu protection” and “milieu protection area”. In this article, we will provide you with an overview of how these terms are to be understood, how they relate to each other and which legal regulations they are based on.
What does the Berlin Conversion Ordinance regulate and when did it come into force?
The Berlin Transformation Ordinance first came into force in Berlin in 2015 for a period of five years. When it expired in 2020, it was extended again by five years, until March 12, 2025. The purpose of the ordinance is to contribute to the protection of neighborhoods in Berlin. The aim is to prevent rental apartments in long-established Berlin neighborhoods from being converted into condominiums. Residential buildings with more than five rental apartments may not be sold as condominiums without permission.
The grounds on which such permission can be granted are defined in Section 172 of the Building Code. Permission can be granted, for example, if the tenancy is terminated in order to sell the apartment to immediate family members.
Although the ordinance came into force in 2015 and the regulations have been significantly tightened, it has not yet been possible to observe a reduction in the conversion of apartments in Berlin. One of the reasons for this is that there are exceptions that allow such conversions. These include, for example, that it must be permitted to sell a rental apartment as a condominium if the financial losses incurred by the owner by retaining the tenancy are not justifiable.
What is a milieu protection area?
Section 172 (1) sentence 1 no. 2 of the BauGB deals with social conservation rights. Colloquially, it is referred to as milieu protection, which means the following: In many German cities, the cityscape has changed considerably in recent years. Where there used to be working-class districts, there are now modern residential areas with renovated apartments. Prices are rising accordingly, and many rental apartments are being converted into condominiums.
Certain sections of the population are being pushed out of these neighborhoods because they cannot afford the high rents. As a result, the cityscape is changing significantly, as is the composition of the residential population in these districts. To prevent this, individual neighborhoods have been designated milieu protection areas. These measures are intended to ensure that the composition of the population does not change and that the cityscape can be preserved. Berlin is well known for this decision, but Hamburg, Munich, Freiburg and other German cities also have milieu protection areas and conversion ordinances.
When do we speak of a "conversion ban"?
The Conversion Ordinance basically sets out which permits are required in order to be able to convert residential space. As the previous measures to preserve the structures in Berlin have not been successful, they were tightened with effect from August 6, 2021.
A general ban on conversions now applies throughout Berlin, which makes special permits necessary. This makes it very difficult to convert rental apartments into condominiums. This affects all buildings with more than five rental apartments that were ready for occupancy on August 6, 2021. New buildings that were only completed after the new regulations came into force are therefore exempt from the stricter regulations. It does not matter whether the apartments were recently rented out or vacant. Houses that are unoccupied can also be added to Berlin’s rental housing stock. Houses in which there are other units in addition to the rental apartments are also affected by the conversion ban.
The conversion ordinance does not actually impose a general ban on conversions, but in Berlin the regulations are treated very strictly. The authorities only grant permission to convert apartment buildings into condominiums in exceptional cases in order to preserve the rental space.
What will change as a result of the extension of the Berlin Conversion Ordinance?
Prior to the tightening of the conversion ordinance, which came into force on August 6, 2021, 12 neighborhoods in Berlin had been designated as milieu protection areas. Affected since 2015 were
- Leopoldplatz
- Seestraße
- Sparrplatz
- Birch Street
- And Waldstraße
Additional areas were added in 2018 and 2019:
- Kattegat road
- Soldiner Strasse
- Reinickendorfer Strasse
- Humboldthain North-West
- Thomasiusstrasse
- Tiergarten South
The new guidelines extend the general ban on conversion to the whole of Berlin.
Until when does the new conversion regulation apply?
The time frame of such an ordinance is dealt with in Section 250 (1) sentence 3 BauGB. The conversion ordinance states that it will automatically expire on 31.12.2025. Accordingly, the Senate has fully exhausted the time frame specified in the Building Code.
Which buildings are affected by the conversion ban?
Residential buildings in which there are more than five rental apartments are affected. No other requirements can be taken from the law, but it is still possible to narrow down the scope. As already mentioned, the building does not have to be inhabited. The regulations apply as soon as a building has been constructed for residential purposes. Theoretically, unoccupied apartments could be added to Berlin’s residential rental market.
Furthermore, the building does not have to consist exclusively of rental apartments. The legislator stipulates that even partial residential use is sufficient for a building to fall under the conversion ban.
Does the ban on conversion also apply to applications that have already been submitted?
Neither the Act nor the Conversion Ordinance specifically addresses the handling of applications that have already been submitted.
If an application for execution was already submitted to the land registry on August 5, 2021, then reference can generally be made to the case law of the BGH, which deals with a subsequent restriction on disposal. According to this legal basis, applications for execution that were submitted before the legal ordinance came into force are not subject to approval. It remains to be seen how the district authorities will decide and act in reality.
In which cases must the conversion to residential property be approved?
First of all, it must be emphasized that the district offices decide individually on the legal basis at hand. Even if there are certain exceptions where the general conversion ban can be lifted, this is decided by the responsible district office.
However, there are certain constellations in which permission to convert the living space must be granted:
- The residential property or partial ownership is to be sold to the tenants so that they can use it. At least two thirds of the tenants must purchase the residential property.
- The property is part of an estate and therefore condominium ownership or partial ownership is established in favor of the co-heirs.
- Preventing the transformation of the residential property or part-ownership is not reasonable. Not even in consideration of the common good.
- The condominium or part-ownership is to be sold to family members of the condominium owners. They will use it themselves.
- If it is necessary to ensure that the claims of third parties to the condominium or partial ownership are fulfilled. Before the reservation of approval became effective, a priority notice was entered in the land register to guarantee this security.
