Real Estate updates

Austria

Contributed by Graf & Pitkowitz Rechtsanwalte GmbH
Supreme Court redefines location surcharge in rent control leases
  • Austria
  • 18 October 2019

In early 2019 the Supreme Court passed three decisions confirming and clarifying its 2017 decision which had limited landlords' right to request a location surcharge for rent-controlled apartments in desirable neighbourhoods. Based on the court's judgment, approximately 100,000 apartments no longer qualify for the location surcharge. However, the court's vague criteria for determining whether a neighbourhood is considered above or below average leave scope to include additional indicators.

Vienna Building Code: new provision renders short-term letting illegal
  • Austria
  • 31 May 2019

A new provision in the Vienna Building Code recently entered into force, rendering short-term letting – including through rental services such as Airbnb – illegal in large areas of Vienna. Further, under the new provision, all parts of residential zone buildings that were being used for residential purposes when the provision entered into force – or were built thereafter – may be used only for residential purposes. That said, the new provision may be unconstitutional.

Demolition crackdown: Vienna protects its buildings
  • Austria
  • 31 August 2018

The City of Vienna recently announced its intention to reform the building code. Some building owners consider it unfair that strict maintenance obligations and rent limits apply only to old buildings, whereas buildings constructed after 8 May 1945 can be let at market rent. As a result, many building owners have chosen to tear down historic buildings and erect new concrete and steel structures in their place. Therefore, one of the aims of the reform is to protect the city's historic buildings.

Supreme Court manages shopping centre management costs
  • Austria
  • 08 June 2018

Service charge provisions in shopping centre lease agreements frequently give rise to disputes between landlords and shop operators. In a recent decision on such costs, the Supreme Court offered some insights into shopping centre lease agreements which go beyond service charge provisions.

Supreme Court: no change of control despite departure of majority shareholder
  • Austria
  • 09 March 2018

The Supreme Court recently considered whether a landlord can increase the rent if the majority shareholder of a partnership dies and his or her shares are distributed equally among the remaining partners, none of whom holds a majority in the partnership. In the decision, the Supreme Court offered an insight into how to assess the change of control in a company that is not a corporation.


Bahamas

New tax reforms in effect
  • Bahamas
  • 19 July 2019

In the 2019/2020 Budget Communication the government announced various tax reforms which came into effect on 1 July 2019. Among other things, the cap on owner-occupied property has increased from B$50,000 to B$60,000 per year and stamp duty on real property has been replaced by value added tax (VAT) at the same rates. Further, any party that is required to become a VAT registrant must have a business licence.

Extinguishment of purchasers' rights – importance of priority in unregistered land systems
  • Bahamas
  • 21 June 2019

The Bahamas has an unregistered land system that is based on the conveyancing laws of England and Wales issued before 1925. Therefore, deeds and documents should be recorded in the Registry of Records in The Bahamas as soon as possible. Priority becomes particularly important in high-net-worth commercial and condominium development transactions.


Cyprus

Supreme Court rejects administrative recourse challenging compulsory acquisition notice
George Z Georgiou & Associates LLC
  • Cyprus
  • 02 August 2019

The Supreme Court recently rejected a first-instance rejection of a property owner's request for the return of land that had been compulsorily acquired by the state in 1977. The applicant claimed that the land was not being used for one of the acquisition's original purposes. However, the court found that as the applicant had taken no measures against the initial acquisition, he could not call it into question after 35 years by relying on the broadness of the stated purposes.

Supreme Court examines appeal against decision by Land Registry director
  • Cyprus
  • 17 May 2019

The Supreme Court recently issued its decision on the appeal of a district court interim decision concerning an application to present oral evidence as part of an application against a decision by the director of the Land Registry. The applicants had filed their application against the director's decision to grant a right of way to the respondent to the detriment of their immovable property.

Rent Control Court awards damages to owner after tenant is evicted
  • Cyprus
  • 22 February 2019

The Limassol Rent Control Court recently dismissed an application regarding the eviction of a tenant from a leasehold. Since it was ruled that the first and second applicants had never owned the property, they were not entitled to file the eviction application. However, the court awarded damages in relation to unpaid rent to the third applicant (who became the actual owner of the property after the application).

Rent control court rules on outstanding rent
  • Cyprus
  • 14 December 2018

The Nicosia Rent Control Court recently ruled on the outstanding rent of a statutory tenant. The court held that a provision for the increase of rent provided for in a tenancy agreement does not apply once the tenancy is converted into a statutory tenancy. However, by interpreting the terms of the tenancy agreement (which had been terminated in this case), the court concluded that it had not provided for an increase in rent during the first tenancy period.

Amendments to Transfer and Mortgage of Immovable Property Law introduced
  • Cyprus
  • 05 October 2018

Law 8(I)/2018 came into force in July 2018, amending the Transfer and Mortgage of Immovable Property Law. The new legislation was applied for the first time in a recent Nicosia District Court case, which is considered to be of great importance in assessing how the courts will interpret the new law in future. The case concerned an auction procedure which had been initiated by the sending of the relevant documents and notices to the mortgagor, which filed a lawsuit against Hellenic Bank to suspend a foreclosure procedure.


Georgia

Constitutional Court sets out new standard for purchase of real estate in Georgia
  • Georgia
  • 09 February 2018

The Constitutional Court recently considered issues raised in the decision of a lower court in which the legal presumption of accuracy and completeness of entries in the Public Register in relation to real estate was declared in part unconstitutional. The decision may have a significant, adverse impact on the real estate market in Georgia and will be relevant to any real estate transaction, including taking mortgage security.


Germany

New legislation on rent increases due to modernisation – impact on investors
  • Germany
  • 10 May 2019

Tenants in Germany are generally well protected against rent increases in existing tenancies and high rent increases are uncommon; however, a major exception is when flats or houses are modernised. New legislation aims to offer tenants improved protection against abusive practices when modernisation work is announced and carried out and prevent them from being disproportionately burdened by rent hikes due to modernisation.

Formal requirements on agreements to amend real estate purchase contracts after conveyance
  • Germany
  • 16 November 2018

Federal Court of Justice case law suggests that the parties to a real estate purchase contract can in principle immediately change its content without having to comply with notarial form requirements after the notarial certification of the real estate purchase contract containing the conveyance has been concluded. The court's recent decision in this regard is to be welcomed in the interests of the continuity of its case law and in view of the lower courts' increasingly inconsistent case law in the past.

New RETT rules for share deals
  • Germany
  • 06 July 2018

The Ministers of Finance of the Federal States recently agreed on new real estate transfer tax (RETT) rules for share deals. According to official press releases, a fundamental RETT reform that had been previously discussed was not agreed. Rather, the agreement consists of new RETT rules regarding share deals with a lower threshold, longer holding periods and aligning the rules that are applicable to corporations with those that already apply to partnerships.

Sale of real estate by special purpose vehicles
  • Germany
  • 20 April 2018

Transaction structures involving special purpose vehicles, whose main assets after completion of the purchase process consist only of the purchased real estate, are often chosen in Germany. Such structures are used in particular to shield from liability, so that third-party access to the special purpose vehicle's assets is limited. They are also used to facilitate a sale without incurring real property transfer tax for the exit.

Impending terminability of land use agreements for energy plants
  • Germany
  • 08 December 2017

The operation of energy plants usually means securing the required land long term by way of a use agreement. Prematurely ending a use agreement can substantially reduce the profitability of investments in energy plants. Defects in the written form of use agreements therefore constitute a risk for such investments. However, the Federal Court of Justice has decided that written form remedy clauses are invalid and do not prevent a contracting party from terminating a use agreement by invoking a written form defect.