# Social Housing Restrictions for 215 Apartments in Europacity > VG Berlin orders two property companies to let 215 apartments as social housing and awards the state €1.8 million in damages. Source: https://www.mtrlegal.com/en/social-housing-restrictions-215-apartments-europacity/ · Language: en · Updated: 2026-10-27 --- Verwaltungsgericht Berlin (VG Berlin, Berlin Administrative Court) has ordered two real estate companies to let 215 apartments in Berlin’s Europacity subject to rent and occupancy restrictions. At the same time, it awarded the State of Berlin damages of €1.8 million plus interest because the apartments had not yet been let as social housing (VG Berlin, judgment of 9 October 2026 – VG 8 K 19/25). The decision is not yet final. ## Urban development agreement provided for 20-year restrictions The proceedings arose from an urban development agreement that the State of Berlin had entered into with the then owner of the property in 2016. The property concerned is located at Lisa-Fittko-Straße 5, 7, 9, 11, 13 and 15 in Berlin. ### Obligation to let as social housing from the date of readiness for occupancy The agreement required the former owner to let 215 apartments in a residential building in a new development area in Berlin for a limited period of 20 years from the date on which they were ready for occupancy, in accordance with the Wohnungsbauförderrichtlinien 2015 (2015 Housing Construction Funding Guidelines). The apartments were to be subject to both rent and occupancy restrictions. The relevant circumstances were as follows: - The apartments were ready for occupancy in August 2023. - From that date, the 215 units should have been let subject to rent and occupancy restrictions. - However, they were not let on that basis. The State of Berlin subsequently brought an action against both the former and the current owner of the property. It sought both compliance with the agreed letting restrictions and compensation for the failure to let the apartments as social housing to date. ## Transfer of ownership did not extinguish the obligation In 2021, the property had been transferred to its current owner, a GmbH & Co. KG, by means of a contribution agreement. According to the Verwaltungsgericht Berlin’s decision, this change of ownership did not extinguish the obligation to let the apartments subject to rent and occupancy restrictions. ### Former owner remains bound by the agreement The court considers the former owner of the property to remain bound by the urban development agreement. According to the decision, the fact that it is currently no longer able to exercise control over the apartments does not affect the continued existence of its contractual obligation. ### Current owner’s obligation under § 826 BGB Under the judgment, the current owner must also let the 215 apartments as social housing. The Verwaltungsgericht Berlin expressly based this obligation on [§ 826 BGB (German Civil Code)](https://www.gesetze-im-internet.de/bgb/__826.html), which requires intentional damage contrary to public policy. According to statements issued by the court and the Berlin Senate Department, the personal links at managing director level were particularly significant to this assessment. The individual who was then the managing director of the general partner of the current owner was also the managing director of the former owner and represented both parties when the contribution agreement was concluded. According to the court’s findings, he accepted the risk that the State of Berlin would be unable to require the 215 apartments to be let as social housing, whether on a contractual basis or by any other means. The current owner had also been aware of the existing obligation. The court therefore classified the relevant conduct as intentional damage contrary to public policy within the meaning of § 826 BGB. ## Damages for failure to let apartments as social housing In addition to ordering future compliance with the rent and occupancy restrictions, the Verwaltungsgericht Berlin awarded the State of Berlin damages. Accordingly, the two defendant companies must pay €1.8 million plus interest. The claim for damages relates to the period during which the apartments were not let as social housing despite being ready for occupancy. The court’s decision therefore concerns both the letting obligation that remains to be fulfilled and the financial consequences of the failure to comply with it to date. ## Decision is not yet final The judgment of the 8th Chamber of the Verwaltungsgericht Berlin is not yet final. Following the decision, it remained unclear when the apartments would actually be let subject to rent and occupancy restrictions. The Verwaltungsgericht Berlin reported on the proceedings in its press release no. 43/2026. Berlin’s Senator for Urban Development, Building and Housing, Christian Gaebler, described the judgment as a signal to project developers that obligations arising from urban development agreements could not be circumvented through property transactions. However, the key point remains that the judgment is currently not yet final. MTR Legal advises companies, investors and high-net-worth individuals on matters of business law.