Whether and how a piece of land can be developed is governed by public planning law. All land can be classified into one of three development categories:
- Designated development area (§ 30 German Federal Building Code – Baugesetzbuch (BauGB))
If a piece of land falls within the scope of a local development plan, which contains a minimum of specifications on the type and extent of the development, on the areas which may be developed, and on the local public access areas, the construction project is permitted. This only applies if the project complies with these specifications and the development infrastructure is assured. - Developed areas without a local development plan (§ 34 BauGB)
Development is permitted inside continuous built-up areas for which a local development plan does not exist. However, this only applies if the type and extent of the project, the construction method, and the area which is to be built upon fit into the surrounding area and development infrastructure. Where the character of the area falls within one defined by the Federal Land Utilisation Regulation (Baunutzungsverordnung (BauNVO)), the proposed development has to meet the criteria required. This regulation defines the typical categories of land and permits certain types of use in various categories (e.g. residential, commercial, mixed areas etc.). - Non-developed area (§ 35 BauGB)
If the land is not located within a continuous built-up area and if there is no local development plan, a construction project is only permitted, provided that it does not conflict with public interests, that the development infrastructure is assured, and that the construction project is a privileged project within the meaning of § 35 BauGB. Privileged projects are certain types of building projects which generally should be located outside developed areas, such as agricultural plants, power plants, etc.
Given the approval of the responsible local authority, a commercial real estate project may be realised by way of a project-specific local development plan. The contracts dealing with large-scale projects in particular must ensure the possibility of realising the project according to all public law requirements and contain provisions to cover the possibility that the project cannot be realised as anticipated.
Once the plans for a project have been drawn up, a building permit (Baugenehmigung) is applied for. The requirements for a permit vary according to the Building Law of each German Federal State (Landesbauordnung). A building permit is necessary for the erection, demolition, or change in material or use of a building. In order to obtain a building permit, an application must first be submitted. It may be filed by the owner of the land or third parties if generally such agreement was reached with the owner beforehand.
If the construction project complies with the local development plans and if it does not infringe any public-law requirements, the local authority will issue the building permit, possibly attaching additional requirements (in particular relating to fire protection, building safety, etc.). The neighbours adjacent to the site will be notified of the construction project and given an opportunity to comment. The neighbours may file objections regarding the building permit and, under certain circumstances, hinder the progress of construction work by taking legal steps. However, this is only possible if the building permit infringes regulations specifically designed to protect the interests of neighbours, such as the distance between buildings and boundaries.
If the land is intended for commercial purposes, further permits may be necessary. Of particular practical importance is the permit under the Federal Emission Control Act (Bundesimmissionsschutzgesetz).
Certain projects, such as industrial buildings and shopping malls, additionally require an environmental impact assessment before the building permit can be issued.
German law distinguishes between rights attached to the land (Realkonzession) and rights attached to a specific individual. Where the right is attached to the land, it automatically applies to any new owner. Whether the permit is granted as a right attached to land depends on the specific type of permit. The building permit is issued for a specific piece of land and also applies to the new owner of the land. A new application is not necessary. In case the permit only applies to a specific individual, a new owner must re-apply for it.
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