The judgment of the Federal Court of Justice obliges owners to renovate scrap properties

The judgment of the Federal Court of Justice obliges owners to renovate scrap properties

The judgment of the Federal Court of Justice obliges owners to renovate scrap properties

This is good news for members of a community of owners who want to renovate apartments or buildings against the opposition of other apartments: The Federal Court of Justice (BGH) largely strengthened the obligations for renovation with a ruling announced on Friday and allowed only a few exceptions. The owners’ association Haus & Grund emphasized that owners who want to renovate would have their backs strengthened: They would not only get the green light. After the decision from Karlsruhe, you were not left alone at your expense. All members of the community would have to participate. (Az. V ZR 225/20)

A lack of maintenance or obsolescence does not release owners from their renovation obligations, as do high costs, as the chairwoman of the fifth civil senate, Christina Stresemann, explained. Only destruction through isolated events could be the reason for this. She cited fires, floods and explosions as examples. In some cases, damage is then not insured.

Section 22 of the Condominium Act reads: “If the building is destroyed to more than half its value and the damage is not covered by insurance or in any other way, the reconstruction cannot be decided or requested.” Stresemann explained in order to assess the loss in value To be able to do so, a before-and-after comparison is needed. In the event of a fire, for example, that’s not a problem. With years of decay and renovation backlog, however, there is no suitable time at which the values ​​of the “problem properties” can be measured before and after.

The verdict is probably good news for most, said the federal manager of Haus & Grund, Gerold Happ, the German press agency. It remains to be seen whether the decision will lead to many renovations starting and possibly increasing rents and will depend primarily on the owners’ financial circumstances. Tenants would have the right to have a dilapidated staircase refurbished anyway, said Happ.

How many cases across Germany are affected by the judgment is unclear. According to Christian Osthus from the IVD real estate association, such advanced decay is likely to occur primarily in unused buildings. The fact that an inhabited residential building is officially declared unusable is likely to be the exception, explained the deputy federal manager.

With the decision, the highest German civil court granted a GmbH right to three of the eleven floors of a dilapidated multi-storey car park with 550 parking spaces in Augsburg. She wants to rent it out to a hotel. The majority of the other owners – including two major owners – had decided to prohibit the use of the entire, more than 40-year-old car park due to deficiencies in fire protection, which means that visitors to a nearby congress center are unable to park. The plaintiff was allowed to remedy the defects at its own expense.

The GmbH had previously failed with a lawsuit against it. The Regional Court of Munich I had recently decided that, as an exception, the renovation could be dispensed with. Their costs are estimated at 4.9 million euros. That is over a million more than the parking garage is worth. The appeal before the BGH has now been successful, a permanent ban on use by majority decision is illegal. This means that owners cannot avoid urgently required renovation measures.

In principle, apartment owners could adopt a ban on use that relates to communal property if it averted dangers, explained Judge Stresemann. There are narrow limits for this, however, and compelling reasons are necessary. “According to normal usage, a building is only destroyed when its usability has been partially or completely eliminated, but not because renovation causes high costs.”