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Germany: Law Restricting Airbnb and Other Vacation Rentals Takes Effect in Berlin

(May 24, 2016) On May 1, 2016, a law prohibiting the illegal repurposing of residential housing without a permit took effect in Berlin, following the end of a two-year transitional period. The law aims to combat the growing housing shortage in Berlin.  “Illegal repurposing of residential housing” is defined as use of the entire home as a vacation rental, use for commercial or other professional purposes, structural modification or use in a way that renders it unsuitable as a private dwelling, leaving the dwelling vacant for more than six months, or demolishing the dwelling.  (Gesetz über das Verbot der Zweckentfremdung von Wohnraum [Zweckentfremdungsverbot-Gesetz] [ZwVbG] [Act on the Prohibition of Illegal Repurposing of Housing], Nov. 29, 2013, Gesetz- und Verordnungsblatt für Berlin [BLN GVBl.] [Berlin Gazette of Laws and Ordinances] 2013 at 626, Berliner Vorschrifteninformationssystem; Verordnung über das Verbot der Zweckentfremdung von Wohnraum [Zweckentfremdungsverbot-Verordnung] [ZwVbVO] [Regulation on the Prohibition of Illegal Repurposing of Housing], Mar. 4, 2014, BLN GVBl. 2014 at 73, Berliner Vorschrifteninformationssystem.)

The agency in charge has discretion to grant a permit to allow the repurposing in special circumstances. Home owners without a permit will incur a fine of up to €100,000 (about US$112,000).  In addition, Berlin encourages neighbors to report illegally repurposed apartments on its website.  (Act on the Prohibition of Illegal Repurposing of Housing; Regulation on the Prohibition of Illegal Repurposing of Housing.)

Overview

The Act does not ban all vacation rentals or other ways of repurposing residential housing. Renting out a single room without a permit remains possible, if the owner or tenant still occupies 50% or more of the living space, including the kitchen and bath.  (Act on the Prohibition of Illegal Repurposing of Housing § 2, ¶2, no. 5.)  The burden of proof is on the owner or tenant.  (Id. § 2, ¶ 3.)

Special circumstances that justify the issuance of a permit for repurposing of housing include legitimate private interests that outweigh the public interest of combatting the housing shortage or if a suitable replacement property is provided. The city can charge a fee for the issuance of the permit to compensate for the loss of housing.  (Id. § 3, ¶ 1.)  A legitimate private interest exists if the refusal of a permit would jeopardize the economic existence of the owner/tenant or if the property is not worthy of preservation.  (Id. § 3, ¶ 3.)

Related Developments

The online vacation rental portal Airbnb has petitioned the Berlin government to exempt the company from the law. The Parliamentary State Secretary for Construction and Housing in Berlin, Engelbert Lütke Daldrup, refused the request, saying that the prohibition is needed to prevent an exacerbation of the housing shortage in the city.  He added that he expects Airbnb to act in accordance with the law and to remind its users that even short-term rentals require a permit and that there are high fines for a violation of the law.  (Press Release, Senatsverwaltung für Stadtentwicklung und Umwelt [Senate Administration for Urban Development and the Environment], Zweckentfremdungsverbot: Keine Ausnahme für Ferienwohnungsportal Airbnb [Prohibition on Illegal Repurposing: No Exception for Vacation Rental Portal Airbnb] (Mar. 24, 2016), BERLIN.DE.)

As a result of the law’s adoption, after the two-year transitional period ended, Airbnb listings in Berlin dropped by 40% in one month. (Matt Payton, Berlin Stops Airbnb Renting Apartments to Tourists to Protect Affordable Housing, INDEPENDENT (May 1, 2016).)

Wimdu, a competitor of Airbnb, together with the company ApartmentAllianz, has filed a lawsuit against Berlin in the Administrative Court of Berlin, claiming that the law violates article 12 (freedom of occupation) and article 14 (property) of the German Basic Law, the country’s constitution. A decision is expected in the summer.  (Press Release, Wimdu, Wimdu hat gegen Verbot von Ferienwohnungen Klage gegen Stadt Berlin eingereicht – rasche Entscheidung wird erhofft [Wimdu Has Filed a Lawsuit Against the City of Berlin Against the Prohibition to Use Homes as Vacation Rentals – We Hope for a Swift Decision] (Apr. 14, 2016), WIMDU.DE; Basic Law for the Federal Republic of Germany (May 23, 1949, as amended through July 11, 2012), BGBl. I at 1, as amended, GERMAN LAWS ONLINE (unofficial English translation).)