Real estate lawyer Carsten Loll believes that the Federal Government’s planned Investment Protection Law, intended to manage the nationalization plans in Berlin, has strong chances of withstanding criticism. Speaking to the “Handelsblatt”, the lawyer from the Latham & Watkins firm stated that the government is now formulating clear rules under which “nationalization is possible-which is permitted.”
However, political opposition exists. Elif Eralp, a Green party politician who could potentially become the governing mayor of the capital, called on Monday the approach taken by CSU politician Dobrindt unconstitutional. Loll acknowledged that the Federal Government is facing a genuine legal balancing act. He pointed out that Article 15 of the Basic Law-even though it has never been used before-cannot simply be discarded.
According to the known essential points of the new law, affected property owners would be compensated solely at the full market value of their properties. Furthermore, this compensation would be paid immediately and in cash. Crucially, the law requires that a “compelling necessity” for nationalization must be proven. Loll added that the proposed compensation rules could significantly complicate the plans of the incoming red-red-green state government in Berlin.
The Berlin plans involve transferring approximately 160,000 apartments owned by large private corporations into public ownership. Loll views significant legal difficulties existing within these nationalization plans. In his opinion, even during a nationalization process, it must be examined whether the project is proportionate and if less intrusive means are available to solve the housing crisis. Given that the Berlin Nationalization Act is not scheduled to come into effect until 2029, the legal dispute, in the attorney’s assessment, could potentially drag on for many years.
