VGH Munich: Misuse prohibition law protects only the preservation of housing – no market regulation

(VGH Munich, Decision of 20 January 2021 – Az.: 12 N 20.1706)
Another interesting decision on the topic of misuse of residential space. KFR – Kanzlei für Real Estate explains the key findings of the Munich Administrative Court of Appeal (VGH) and their significance for owners and municipalities.

Background of the decision

The decision of the VGH Munich clearly demonstrates that misuse prohibition law does not provide municipalities with any influence over the housing market, in particular the development of rental and property prices. The purpose of a misuse prohibition is solely the preservation of the total housing supply. The misuse prohibition is limited to the preservation of existing housing stock and aims at ensuring an adequate supply of housing for the population.

Limits of misuse prohibition law

With reference to decisions of the BVerfG and BVerwG, the VGH makes unmistakably clear that provisions exceeding these objectives constitute an impermissible interference with the owner’s right of disposal and private autonomy and are not covered by the statutory basis for authorization.

Replacement housing: No requirements as to type or rent level

With regard to the replacement housing to be offered for a misuse authorization, neither the type – i.e. rental or owner-occupied housing – nor the respective rent level or even the specific location within the municipal area can therefore be relevant.
The complete case commentary by Dr. Henrik Kirchhoff and Carlotta Zimmermann (née Vohl) can be found in the current issue IMR 2021, 126.