Remember the Lock-up Period when Claiming Owner-Occupation

This article was originally published in 2013. The general rules governing tenant protection following the conversion of a rented apartment into a condominium remain unchanged. Under Section 577a of the German Civil Code (BGB), the statutory protection period is generally three years and may be extended by the federal states to up to ten years in areas with particularly tight housing markets. However, some regional regulations have changed since the article was first published. In Berlin, for example, a uniform ten-year protection period now applies throughout the city, replacing the former distinction between individual districts.

Whenever an occupied rental flat in Germany is converted into a freehold property or condominium, and sold, the incumbent tenant is decidedly well protected. German lawmakers put in place a general three-year security of tenure, commonly referred to as the “lock-up period.” Pursuant to Art. 577a, German Civil Code (BGB), a new owner may not give notice to the tenant to claim the right of intended owner-occupation within the first three years following the conversion if the tenant was already living in the flat at the time of the conversion. In municipalities where the demand for rental housing is particularly high, the “owner-occupation lock-up period” may actually be extended to ten years. It is up to the German states to decide which municipalities are affected and how long the extended period is supposed to be.

That said, legislation of this issue differs from one state to the next. In Saxony and Saxony-Anhalt, for instance, the lock-up period is three years everywhere, while in North Rhine-Westphalia 37 municipalities have longer lock-up periods. The maximum permissible lock-up period before owner-occupation may be claimed applies within the city limits of Hamburg and Munich. The situation in Berlin is somewhat more complex. The Senate directive in force since 2011 states that six of the city’s boroughs are subject to a seven-year security of tenure after the flat they live in was converted and sold. The extended period applies in the boroughs of Charlottenburg-Wilmersdorf, Friedrichshain-Kreuzberg, Mitte, Pankow, Steglitz-Zehlendorf, and Tempelhof-Schöneberg. The lock-up period in the remaining six boroughs is just three years.

Regardless of the length of the lock-up period, it always starts at the time a given rental flat is converted into freehold property and sold. If the flat is resold during the lock-up period, the second sale will do nothing to extend the period. If a tenant moves into an apartment held as freehold property after the conversion, the statutory notice periods takes the place of the lock-up period.