Assumption of long-term consequential costs in urban development contracts invalid

The OVG Lüneburg determined in interim legal protection proceedings against a development plan, with regard to the urban development contract concluded in this context and reviewed incidentally in the court proceedings, that the agreed assumption of maintenance costs for general public green spaces including integrated children’s play areas, a youth area and public street planting as well as compensatory areas, capitalized over 20 years, is likely to be invalid.

Background: Urban development contract and consequential cost provision

In the court’s assessment, the required causality between the project and the measure was lacking in the present case in this respect. The corresponding provision of the consequential costs agreement was invalid.

Requirements for causality

In addition to general remarks on the requirement of causality, the Senate expressly stated that “with regard to the costs of ongoing maintenance of public facilities: the further the maintenance period is extended into the future, the more difficult it becomes to construct a relevant causal connection.”

Admissibility of short-term cost assumptions left open

The Senate left open whether it is permissible, in the initial phase in which a municipality already incurs the full maintenance costs for a development area before it is utilized, to contractually impose these costs (at least) partially on the project developer. However, a time horizon of 20 years was in any case clearly excessive.

Maintenance of public green spaces as an urban development measure?

It was also left open whether the long-term maintenance of public green spaces can in principle still be regarded as an “urban development measure” within the meaning of § 11 para. 1 sentence 2 nos. 1 and 3 BauGB. The transfer of maintenance costs for public facilities would result in the municipality permanently receiving a (new) development area with the same fiscal advantages but without the financial burdens of its “existing development areas.”

Consequences for development plans and contracts

The invalidity of the consequential costs agreement in this respect also gave rise in the present case to a significant weighing deficiency in the development plan at issue in the proceedings, so that the latter was ultimately provisionally suspended.

Our conclusion

The decision once again demonstrates that strict requirements are to be placed on the causality requirement and that this represents a considerable risk for the validity of consequential cost agreements and not least also for the validity of the corresponding development plan.
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