GERMANY LAW AND PRACTICE Contributed by: Wolfram H Krüger, Barbara Rybka, Markus Wollenhaupt and Alexander Zitzl, Linklaters
2.8 Permitted Uses of Real Estate Under Zoning or Planning Law A property owner has a right to a building per - mit if the proposed building complies with pub - lic building law. The issued building permit will ensure the legality of the building and its permit - ted use. Local Authorities In many areas, the general public building law is substantiated in local development plans ( Beba- uungspläne ) issued by the local authorities that make provisions for the permitted use and size of the property. If there is no development plan, the permitted use can be determined by the Federal Building Code and the Federal Land Use Ordinance. If no local development plan exists or significant amendments are required for a development to be permitted, the owner might enter into an urban development agreement ( städtebaulicher Vertrag ) with the local authori - ties with the aim of establishing/amending the project-related development plan to secure the building project. 2.9 Condemnation, Expropriation or Compulsory Purchase The fundamental right to property is protected by the German constitution, which only allows the government to expropriate for public inter - est, if authorised by German law, for appropri - ate cause and against compensation. There are federal and federal state laws enabling expro - priation. The procedure varies, depending on the law it is based on. Compensation is based on the market value of the property at the time of expropriation. Municipalities also have the right to expropriate, as a last resort, to fulfil their goals under the Fed - eral Building Code, especially if the real estate is
changed market environment influences these values in favour of purchasers. 2.6 Important Areas of Law for Investors In addition to the civil and public law provisions mentioned in 1.1 Main Sources of Law , the provisions contained in the Anti-money Laun - dering Law ( Geldwäschegesetz ) are particu - larly important for investors and the required know-your-customer checks sometimes create unexpected bureaucratic hurdles. Company register excerpts, passport copies, etc, must be provided to those who are obliged to carry out the checks. Corporations, partnerships and foundations operating on the financial market and/or buying real estate in Germany have to report their beneficial owners to the register of ultimate beneficial ownership ( Transparenzreg- ister ). Checks and notifications not only have to be carried out by providers of financial services, but also to a certain extent by brokers, law firms and notaries. 2.7 Soil Pollution or Environmental Contamination Under the Federal Soil Protection Act ( Bundes- bodenschutzgesetz ), the polluter, all current and former users, and all current and former owners of a property can be held liable for environmental laws irrespective of whether they are aware of the contamination or if it was caused by them. When requesting remediation measures, the authorities act solely on the basis of the princi - ple of effectiveness and will usually charge the most financially sound party, which is often the owner. However, the owner may take redress from the actual polluter if their actions or fault can be proved.
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