On 26 October 2026, the Bundesministerium der Justiz und für Verbraucherschutz (BMJV, German Federal Ministry of Justice and Consumer Protection) published a ministerial draft bill intended to make housing construction in Germany simpler and more cost-effective. Its official title is “Draft Act Governing the Statutory Basic Standard (Building Type E) in the Bürgerliches Gesetzbuch (BGB, German Civil Code)”. It was prepared in close consultation with the Bundesministerium für Wohnen, Stadtentwicklung und Bauwesen (BMWSB, German Federal Ministry for Housing, Urban Development and Building).
According to the BMJV, uncertainty in construction contract law has so far made it particularly difficult to agree on construction methods that dispense with certain comfort features. The draft is intended to enable the parties involved in a construction project to agree on a reduced standard with legal certainty. Mandatory public-law requirements are to remain unaffected.
Building Type E as a voluntary basic standard
The ministerial draft bill provides for construction contract law to be supplemented by a statutory basic standard. Clients and construction companies would be able to agree that a building is to be constructed in accordance with this so-called Building Type E basic standard.
Application only by express agreement
Application of the new regulatory model is to remain voluntary. If the contracting parties do not expressly opt for Building Type E, the existing provisions of construction contract law will continue to apply. The draft thus adopts an opt-in approach.
On the occasion of its publication, Federal Minister of Justice Dr. Stefanie Hubig stated that Building Type E was intended to facilitate construction without costly additional features. Safety requirements would not be lowered. At the same time, no particular construction method would be prescribed; instead, an additional contractual option would be created.
Federal Minister for Building Verena Hubertz emphasised that dispensing with non-essential standards could create financial scope for affordable housing. In her view, clients, construction companies and purchasers should have greater freedom to dispense with comfort features they do not require.
Government requirements remain binding
Opting for Building Type E is not intended to permit any compromise in terms of safety or healthy living conditions. All mandatory requirements under public building regulations must continue to be met.
Technical Building Regulations set the minimum threshold
In particular, the Technical Building Regulations of the Länder remain authoritative. Among other matters, they contain requirements relating to:
- fire safety,
- structural stability,
- ventilation,
- natural lighting, and
- other safety- or health-related features of a building.
A contractual agreement on Building Type E cannot override these requirements. Rather, the proposed basic standard concerns comfort and quality features that go beyond mandatory statutory requirements.
Statutory requirements should generally suffice
If the parties have agreed on the Building Type E basic standard, compliance with a specific statutory requirement should generally suffice. A higher standard in the relevant area would only be owed if it had been expressly agreed.
No automatic obligation to provide greater comfort
If, for example, the Technical Building Regulations contain a specific requirement regarding storey height, compliance with that requirement should suffice. The mere fact that comparable new buildings regularly have higher storeys or that technical standards describe a more extensive standard should not, in itself, give rise to any additional obligation.
The parties may nevertheless expressly stipulate that a structure is to exceed the statutory basic standard in a specific respect. Such a contractual agreement remains binding.
Areas without specific statutory requirements
For features not addressed by the Technical Building Regulations of the Länder, the existing principles of construction contract law should generally continue to apply. This also applies to a Building Type E construction project.
Contractual agreement and customary standard
If the parties have entered into an express agreement regarding a particular feature, that agreement must be complied with. In the absence of such a provision, the structure must generally be built to the quality customary for comparable structures.
However, the ministerial draft bill also makes it easier to depart from the customary standard in this category of cases. For a Building Type E project, a notice in text form, for example by email, would suffice. Under the draft, the contractor would not additionally have to inform the client of all the consequences and risks associated with the departure. This represents a significant difference from the existing requirements governing construction outside the proposed regulatory model.
Additional information in consumer construction contracts
For consumer construction contracts, the draft contains supplementary information requirements. The building specification must indicate that the building is to be constructed in accordance with Building Type E.
In addition, the building specification must always include information on the intended sound insulation standard. It must also provide an approximate indication of the costs expected to be saved by departing from the customary standard.
By contrast, the BMJV does not consider amendments to tenancy or sales law necessary. In this respect, the GdW has assessed the ministerial draft bill as inadequate. In the association’s view, there is still no binding link between construction contract law and tenancy law, which it considers necessary for the model to be applied to rental housing construction.
Potential reduction in building costs
According to the BMJV, experience from Building Type E pilot projects shows that dispensing with standards above the statutory minimum requirements can reduce building costs by approximately ten to 15 per cent. Whether and to what extent savings are actually achieved depends on the conditions of the respective project and the specific measures implemented.
The draft therefore does not provide any general assurance of a specific cost reduction. The decisive factors remain the construction method, the agreed features and the other general conditions of the individual project.
Development and current procedural status
The ministerial draft bill was preceded by a joint key issues paper issued by the BMJV and BMWSB in November 2025. This was followed by a consultation process involving representatives of the architectural profession, the construction industry and other affected groups. According to the ministries, the findings obtained from this process were incorporated into the draft.
Comments may be submitted until 9 November 2026
On 26 October 2026, the BMJV sent the ministerial draft bill to the Länder and relevant associations. They may submit comments until 9 November 2026. The Ministry intends to publish the comments received on its website.
The draft also provides for an evaluation five years after the Act enters into force. The legislative process has not yet been completed; consequently, no binding new statutory provisions are currently in place.
Significance for construction contracts and real estate projects
Building Type E could make it easier to contractually specify a reduced comfort standard without changing public-law requirements concerning safety and healthy living conditions. The agreed scope of services, the applicable Technical Building Regulations and the required notices in text form remain particularly relevant when classifying a construction project.
As the proposed provisions directly affect the drafting and interpretation of construction contracts, questions concerning the scope of the basic standard and expressly agreed additional features may arise as early as the project planning stage. MTR Legal advises companies, investors and private clients on such matters as part of its real estate law services.
