The law on the transfer of residential real estate into public ownership has the potential to bring the Berlin residential real estate market to a complete standstill for years to come, says lawyer Uwe Bottermann in view of the draft law presented by the initiative Deutsche Wohnen & Co enteignen. Bottermann focuses his criticism on § 9, which regulates the so-called prohibition of disposal. It states: "It is prohibited to transfer ownership of residential real estate transferred to public ownership, even on a pro rata basis." The registration of land charges, as is customary for financing the purchase price, is also prohibited.
"Since the transfer to public ownership is to take place as soon as the law comes into force, no more apartments could be sold and bought in Berlin without doubt after a successful referendum. This is because the land register would then be incorrect for all transferred apartments until the transfer has been finally determined. Buyers and financing banks would therefore have to make sure elsewhere that the respective apartment can be sold. This is unlikely to be possible, especially with real estate companies as sellers," says Bottermann.
This is also reflected in the definition of the business association as the central term of the draft law. "The initiators are trying to fully grasp the possibilities of corporate law structuring. For potential sellers, this means that they would have to prove that the apartment to be sold is not subject to the dominant influence of a higher-level company, which may then own more than 3,000 apartments together," says Bottermann.
"From my point of view, it is not clear how this proof is supposed to succeed within a manageable period of time," says Bottermann. "In any case, prospective buyers who need a bank loan to purchase an apartment would probably be largely excluded from the purchase of an apartment."
