New Permit Requirements for Fixed-Term Lettings in Berlin

In large parts of Berlin, a permit will in future be required if residential space is let on a temporary basis. This is not based on a new resolution of the Berlin House of Representatives, but on an administrative regulation issued by the Senate Administration. According to this regulation, fixed-term lettings in so-called social preservation areas constitute a change of use requiring permission.

Specifically, Section 2.10 of the new 'Administrative Regulation on Approval Criteria for Social Preservation Areas' states that the fixed-term (sub-)letting of residential space that was previously let on an indefinite basis 'generally constitutes a change of use' and is therefore subject to permission. Permission is to be granted exclusively in the limited cases listed in Section 575 of the German Civil Code (BGB), as well as for the subletting of the principal residence (primary residence) and/or secondary residence of a natural person registered with the competent registration authority. All other fixed-term rental agreements are intended to be prevented.

What initially appears to be a clear legal position proves, upon closer examination, to be far from legally unambiguous.

First of all, it must be noted that administrative regulations are not laws. They are not adopted by the House of Representatives, but are addressed exclusively to the administration itself. They bind the district authorities, but not citizens. Taken on their own, administrative regulations therefore cannot establish new permit requirements or justify encroachments on property rights.

Accordingly, the Senate Administration does not rely on the administrative regulation itself, but on Section 172 of the German Building Code (BauGB). Under this provision, changes of use in so-called social preservation areas may be subject to permission if they are capable of influencing the composition of the residential population. However, this presupposes that a relevant 'change of use' actually exists.

At this point, a central legal question arises. Whether a fixed-term letting constitutes a change of use compared to an indefinite letting is by no means self-evident. From a legal perspective, a change of use refers to a transition from one type of use to another – for example, from residential to commercial use or to short-term tourist accommodation. In the case of a fixed-term letting, however, the use remains identical: the property is still used for residential purposes. The mere temporal limitation of ordinary residential use does not alter its character.

Nevertheless, the administrative regulation takes precisely this approach and determines internally that the mere fixed term of a tenancy is sufficient to transform residential use into a change of use requiring permission. As a result, a previously everyday instrument – temporary letting – is placed under a general requirement for permission. The statutory basis for such a step can be questioned.

The prevailing view in legal literature is that this equation goes too far. Residential use remains residential use, even if it is not intended to be permanent. Otherwise, it would be difficult to draw boundaries as to which characteristics might in future be construed as constituting a 'change of use': the duration of the tenancy, the identity of the tenant, the contractual structure, or the individual life circumstances.

This results in legal uncertainty for landlords. Anyone wishing to let residential space on a fixed-term basis must now take permission requirements into account, even though it remains unclear whether such a requirement actually exists. Ultimately, the question is whether the protection afforded by so-called social preservation areas may be expanded through internal administrative interpretations.

Whether the Berlin approach will ultimately prevail will likely have to be clarified by the courts. Until then, legal uncertainty will persist for both the authorities involved and the affected landlords.