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.

In the federal state of Berlin, a so-called rent cap has been in force since 23 February 2020. Residential rents will be capped for five years at the level of 18 June 2019 and an increase is prohibited by law. Exceptions only apply in special cases, such as social housing. Fines of up to €500,000 may be imposed for violations.