REALWorld Law

Sale and purchase

Real estate and public law

What are the most important areas of public law for an investor to consider when purchasing real estate?



An investor should always verify that the building complies with the relevant building permits and the zoning and building laws. Usually the building permit will be sufficient to confirm that the building complies with zoning law but sometimes it is also helpful to check the zoning plan. This allows the investor to verify whether the proposed use of the premises is permitted.

Any change in use will require a revised permit.

New public law restrictions on rent increases for residential properties cap rental increase on entering into a new lease contract at 10% above the local reference rent in areas subject to housing market pressures, subject to certain exceptions for new or extensively modernized buildings. New restrictions also limit the sale of residential condominium properties to tenants within a certain time after the conversion of rental space. Additionally, the possibility to increase the rent during the lease is limited by public law restrictions.

For residential properties, depending on the location of the building, housing control measures taken by the municipality or the federal state are also relevant. In social-protected areas (soziales Schutzgebiet), the demolition and change of use of apartments is subject to approval. Furthermore, in certain states such as Bavaria, Baden-Württemberg, Berlin or Hamburg, statutory bans on misappropriation (gesetzliche Zweckentfremdungsverbote), laws against vacancies (Gesetze gegen Leerstand) or approval requirements for the conversion of living space into vacation apartments (Genehmigungspflichten für die Umwandlung von Wohnraum in Ferienwohnungen) exist.