Following an intense political debate, the German Bundestag has passed the Building Modernisation Act. This decision establishes a new, binding legal framework for replacing heating systems and modernising heat supply. The previously applicable blanket 65 per cent requirement has been abolished. Going forward, owners will have the option to choose from various heating options. For newly installed gas, oil, and liquid gas heating systems, a so-called bio-staircase will be mandatory from 2029, prescribing a progressive increase in climate-friendly fuels from an initial ten per cent, rising to 15 and 30 per cent, up to 60 per cent by 2040.
Martin Kaßler, Managing Director of the Association of German Property Managers (VDIV Deutschland), regards the Bundestag's decision as a positive signal, as property owners, management companies, and specialist firms now have a reliable basis for their planning again. He emphasises that the heating transition in existing buildings requires robust regulations, based on which investments and plans can be realised, rather than continuous political discussions.
Prior to the draft bill, VDIV Deutschland had formulated specific requirements, particularly for homeowners' associations (WEG). These included realistic deadlines, reliable funding conditions, clear verification procedures, and legally sound decision-making bases. Some of these core demands were taken into account in the final legislative text. The association particularly highlights the subsequently introduced transitional regulation for the irreparable failure of a heating system. This grants a twelve-month transitional period for the initial application of the bio-staircase when installing a new gas, oil, or liquid gas heating system. This accounts for the fact that, especially in WEG, an alternative heat supply cannot be planned and implemented at short notice.
The verification path for climate-friendly fuels has also been clarified: suppliers are obliged to confirm compliance with legal requirements on the invoice. Owners and recipients of supplies must retain these documents and present them upon request. Furthermore, contractor declarations are permissible for specific technical compliance options, which contributes to clarifying responsibilities. A still open question is the standardised and digital verification process, which VDIV considers necessary.
The green gas and green heating oil quota is not yet finally regulated. The Act obliges the Federal Government to submit a separate draft bill on this by 1 December 2026. This draft will be tasked with establishing clear responsibilities along the supply chain, as well as simple, digitally verifiable proofs. Further progress consists in the explicit recognition of the special structures of homeowners' associations. The Federal Government is instructed to examine additional regulations for WEG, particularly to address the problem of a 'never-ending loop' when replacing individual gas floor heaters. From VDIV's perspective, this mandate must lead to a practical legal solution promptly.
A key element of the decision is the call for the Federal Government to continue the federal funding for efficient buildings (BEG) at least until 2029. This corresponds to a core demand of VDIV. Furthermore, the funding for efficient heating networks is to be legally secured, and the district heating regulations, including the Heat Supply Ordinance, are to be further developed.
However, the short-term change to the BEG, which occurred immediately before the Bundestag decision, is considered critical. From 9 July, it was temporarily impossible to create new confirmations for applications, which meant a de facto application freeze for projects without existing confirmation until the start of new funding conditions on 21 July. Although commitments already made remain valid and applications with existing confirmation could still be submitted under the old conditions until 20 July, the interruption affected newly prepared projects without sufficient lead time.
Martin Kaßler stated that the financial basis for long-term investments by owners' associations must not be changed or made inaccessible at short notice, as WEG require several months for inventory, offers, financing, and decision-making. Funding conditions must take these processes into account and should not be changed overnight. In conclusion, it was emphasised that the Building Modernisation Act represents an important legal compass. For its implementation in existing buildings, the funding landscape, municipal heat planning, district heating regulations, and the announced quota act must be consistently aligned with it. The Act offers a fresh start, and the Federal Government must now ensure reliability not only regarding obligations but also concerning funding and implementation.
