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Market analysis··2 min read

Munich introduces new regulations on the misuse of residential property

The Social Committee of the Munich City Council has passed a new statute on the misuse of residential property, which includes a registration requirement for holiday flats, as well as simplifications for demolishing residential property and new possibilities for detecting vacant properties.

AI generatedMunich introduces new regulations on the misuse of residential property – AI-generated illustrative image
Munich introduces new regulations on the misuse of residential property. Illustrative image generated using artificial intelligence (AI). The image does not depict a real property, person or event and is not a documentary photograph. Labelled in accordance with Article 50(4) of the EU AI Act.

The Social Committee of the Munich City Council, subject to the final decision by the full assembly in July, approved a new statute on the prohibition of misusing residential property at its most recent meeting. This statute implements significant innovations that will influence the management of residential property in the Bavarian state capital. The adjustments are based on the Bavarian Residential Property Misuse Act, which was amended in April, and aim to address existing challenges in the housing market.

A central change is the introduction of a registration requirement for holiday flats. In future, every dwelling offered for holiday rentals via an online portal must first be registered online with the Social Affairs Department. Landlords are obliged to provide their name and the exact address of the dwelling in question. Subsequently, the Social Affairs Department will issue a dwelling-specific registration number, which must be included in the respective online advertisement. Online portals will transmit information about rentals to the Federal Network Agency, to which the Social Affairs Department will have access.

Mayor Verena Dietl stated that the City of Munich had been demanding such a registration requirement from the Free State of Bavaria for years. She expects this to significantly simplify the prosecution of illegal misuses, as extensive information about holiday flat rentals would be available. Nevertheless, she noted that the Residential Property Misuse Act should have gone further. A permit requirement for the use of all dwellings offered for guest accommodation is still missing. Furthermore, the permit-free rental period of eight weeks should be limited to owner-occupied dwellings. The implementation of the registration requirement will be carried out by connecting to an existing IT solution of the state of North Rhine-Westphalia. A precise date for the entry into force of the registration requirement is not yet fixed, as the possibility of retrieving data from the Federal Network Agency is delayed.

The new statute contains further important adjustments. For the demolition of residential property, a separate permit is no longer required in future, although demolition still counts as misuse. Under certain conditions, for example, the obligation to construct equivalent new residential property during demolition, the application procedure is no longer necessary. Violations can be punished with fines. This regulation contributes to the reduction of bureaucracy in the permitting process.

Furthermore, with the entry into force of the statute, energy and water supply companies will be obliged to provide consumption data to the Social Affairs Department on a case-by-case basis. This facilitates the detection of vacant properties. The Social Affairs Department had long advocated for the creation of such an obligation, which can now be implemented through the amendment of the Residential Property Misuse Act and integrated into the municipal statute. The new Residential Property Misuse Statute will be valid for a period of five years.

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