Right of allocation/occupancy of apartments: Definition and legal foundations
The right of allocation of an apartment, frequently referred to as the right of occupancy, is a specific legal term in German tenancy and housing law. It describes the right of a particular person, organization, or entity to determine who is permitted to move into a certain apartment. The right of allocation is especially applied in municipal, social, and cooperative housing as well as in connection with public funding and restrictions. The regular aim is to control access to housing, create social balance, or secure housing policy objectives.
Origin and development of the right of allocation
The right of allocation has historically developed in the context of housing regulation, social housing, and state housing subsidies. Already in the interwar period and especially after the Second World War, the right of allocation was introduced as a housing policy instrument to counteract major housing shortages, displacement, and speculation. With the introduction of numerous funding programs and the creation of social housing stocks, the right of allocation was transferred to various actors, such as municipalities, associations, or certain employers.
Today, the right of allocation primarily plays a role in publicly funded housing, in cooperatives, and in cases of restrictions imposed during the privatization of public housing stock.
Nature of the right of allocation
The right of allocation is an obligatory right with limited content, which generally arises from a special contractual agreement or by statutory provision.
The right of allocation as a contractual right
In contrast to real (in rem) rights (e.g., ownership or usufruct), the right of allocation basically only has effect inter partes, i.e., between the persons specified in the right. The right of allocation is generally not recorded in the land register, but in rare cases, it may be secured as a real right within the framework of limited personal easements or other contractual restrictions.
Transferability, inheritance, and duration
The right of allocation arises on the basis of an agreement with the respective owner of an apartment or by law. As a rule, it is not freely transferable, but may be subject to certain conditions, terms, or purposes. Inheritance or transfer generally requires an express stipulation. The duration of the right of allocation is determined by the underlying agreement or housing restriction.
Forms and practical implementation
The right of allocation is applied in various social and legal contexts. The following main forms are significant:
Municipal right of allocation
Municipalities usually acquire the right of allocation through statutory requirements in connection with housing promotion or the purchase of subsidized apartments. The purpose is to enable the targeted allocation of apartments to certain groups of people, such as recipients of social assistance, homeless persons, or low-income households. The municipal right of allocation is generally specified through administrative regulations, municipal statutes, or funding guidelines.
Housing cooperatives
Cooperatives also use the right of allocation to manage the allocation of apartments to their members. Here, the cooperative principle of member promotion is paramount. In many cases, rights of allocation are also transferred to social service providers or employers, for example within the framework of so-called company housing.
Third-party providers (associations, foundations)
In addition to municipalities and cooperatives, rights of allocation are sometimes granted to charitable organizations, welfare associations, or foundations. This is often done to fulfill specific social purposes, including providing housing for people with disabilities, senior citizens, or other vulnerable groups.
Legal basis and statutory provisions
The right of allocation is shaped by various legal regulations and ordinances.
Stipulations in funding law and tenancy law
The legal foundations for the right of allocation are primarily derived from public housing promotion law. Examples include the Housing Promotion Act (WoFG) at the federal level and state laws on social housing promotion. In tenancy law, the right of allocation may be part of tenancy agreements, cooperation agreements, or attached as a condition to the granting of public subsidies.
Restriction periods and limitations
The right of allocation is generally subject to binding periods arising from funding programs or statutory requirements. After expiration of these periods, the right lapses unless otherwise contractually agreed. Allocation rights must also be reconciled with the owner’s rights to the property.
Protective instruments and control mechanisms
In order to prevent misuse or the neglect of social objectives, conditions, reporting obligations, and controls by the public authorities or the federal state exist. Infringements of the right of allocation may result in administrative consequences or claims for repayment of public funds.
Relationship to tenancy law and property law
The right of allocation affects the key legal positions of tenants and owners.
Relationship to the tenancy agreement
The right of allocation is, by its effect, a right of proposal or nomination: It entitles the holder to designate a prospective tenant. However, the tenancy agreement is generally concluded between the owner and the tenant. The owner may only reject the nomination in exceptional cases (e.g., in cases of significant unreliability or insolvency of the nominee); restrictions may arise from funding guidelines or the relevant allocation rights agreements.
Legal relationship with the owner
The right of allocation does not restrict the owner’s power of disposal, but merely constitutes a restriction regarding to whom the apartment may be allocated. The owner’s position therefore remains legally intact, but the owner’s ability to choose the tenant is restricted for the duration of the allocation binding.
Termination of the right of allocation
Upon expiry of the binding period, cessation of the underlying funding conditions, or termination of the agreement governing allocation, the right of allocation lapses. However, there are no immediate effects on existing tenancy relationships; these generally remain unaffected by the termination of the allocation right. An existing tenant retains statutory protection under the provisions of the German Civil Code (BGB).
Special features and current developments
The right of allocation is currently increasingly being discussed as part of housing policy debates. Rising demand for affordable and social housing, the shrinking public housing stock, and the gradual lifting of social restrictions are prompting municipalities and social providers to focus increasingly on securing and shaping allocation rights.
There is also a growing trend to temporarily encumber apartments with allocation rights to address urgent housing policy needs, such as the accommodation of refugees, homeless persons, or people in special emergencies. Instrumental developments such as the concept of social conservation statutes also draw on elements of the right of allocation.
Literature and further information
Typical sources for in-depth information about the right of allocation include commentaries on housing promotion law, academic manuals on real estate and tenancy law, and relevant publications from state building authorities and municipal housing offices.
This article provides a comprehensive and structured overview of the term right of allocation/occupancy, addressing its legal foundations, forms, key regulations, and current relevance in tenancy and housing.
Frequently Asked Questions
What legal requirements must be met to exercise the right of allocation (Belegungsrecht)?
Certain legal requirements must be met to exercise the right of allocation. As a rule, the right of allocation is granted via contractual agreements between the owner of an apartment and a housing company, municipality, or third party. This occurs frequently in connection with publicly subsidized housing, where, for example, the municipality acts as the beneficiary of the allocation right. The basis is, in most cases, a corresponding contract, for example an urban development contract or a social law subsidy contract pursuant to § 88 ff. II. Housing Construction Act (WoBauG) or under state housing promotion laws. Additionally, the right of allocation may arise through so-called restrictions if, for example, public funds have been granted for housing construction. In such cases, the right is enshrined in law and must be designed according to the funding guidelines. In practice, the allocation authority must generally inform the landlord of an interested apartment seeker and request their acceptance. If the legal or contractual grounds are lacking, a valid right of allocation cannot be exercised.
How does the right of allocation affect the relationship between landlord and prospective tenant?
The right of allocation has a significant impact on the relationship between landlord and prospective tenant. If a beneficiary (e.g., a municipality) exercises the right, the landlord is generally obliged to conclude a tenancy agreement with the nominated applicant, provided the person meets the usual requirements (e.g., creditworthiness, compliance with usage conditions). The landlord’s freedom of contract is thus restricted, as they cannot freely decide on the choice of tenant. However, the allocation right does not permit the authorized party to force a contract if the applicant is objectively unsuitable (e.g., significant payment arrears in the past, unacceptability for other substantial reasons). Thus, the allocation right regularly confers a so-called nomination right, but, except in rare cases, does not entail a strict obligation to contract.
Can the landlord oppose the exercise of the allocation right?
The landlord can only oppose the exercise of the allocation right if there are significant reasons in the individual case. Thus, the landlord may legitimately refuse the acceptance of a prospective tenant proposed by the beneficiary if the person is not financially capable, already has rental debts with other landlords, or the apartment is obviously unsuitable for the applicant (e.g., due to overcrowding). The landlord may also argue the absence of a contractual or statutory basis for the allocation right. However, if there is a binding right of allocation, the landlord is generally obliged to cooperate and usually cannot successfully oppose it. In case of disputes, the parties may take legal action (e.g., by filing a declaratory action).
What happens to the right of allocation if the owner of the apartment changes?
The right of allocation generally survives a change of ownership. Depending on how it is structured, it may be a so-called property-related right, which, if registered in the land register (e.g., as a real burden), also binds legal successors (§ 1018 BGB in conjunction with special housing law provisions). If the allocation right is based solely on contract, it depends on the content and whether the purchaser takes over the obligations. In the case of a public-law restriction (such as those imposed by housing promotion requirements), the right of allocation applies regardless of ownership and is attached to the property. Thus, a purchaser acquires the rights and obligations arising from the allocation right together with the purchase of the housing unit.
Can an allocation right be limited in duration or perpetual, and how is this right terminated?
An allocation right can be granted either for a limited period or on a permanent basis. The duration often matches the funding period (e.g., 15 or 20 years from completion of the dwelling), specified either in the funding agreement or through public law provisions. Upon the expiry of the stipulated period, the right expires automatically. A permanent establishment is possible, especially with rights secured in the land register. An allocation right may also end through contractual agreement, expiration of the funding restrictions, cancellation by the competent authority, or deletion in the land register (if secured as a real right). A waiver by the beneficiary may also terminate the right, subject to formal requirements (e.g., approval by the funding authority).
What are the legal consequences of unauthorized exercise of the allocation right?
If an alleged beneficiary exercises the allocation right without a contractual or statutory basis, it generally has no legal effect on the landlord. Any resulting tenancy agreement would be invalid, and the landlord may refuse to allocate the apartment. Should any actions still be taken (e.g., unlawful occupation of the apartment), this may constitute a disturbance of possession, against which the landlord may take civil law actions (e.g., eviction action pursuant to §§ 985, 1004 BGB). Furthermore, claims for damages may arise if the landlord suffers harm due to the unauthorized exercise of the right of allocation. In extreme cases, administrative measures or penalties may apply if housing allocation regulations are violated.
What duties and responsibilities does the beneficiary of the allocation right have?
The beneficiary is particularly obliged to designate suitable prospective tenants within the allocation quota and to inform the landlord in a timely manner about the desired allocation. They are required to observe the statutory and contractual requirements (e.g., income limits for social housing, personal circumstances of the applicants). The beneficiary must also ensure that no invalid or abusive allocation practices are applied (anti-discrimination, equal treatment principle). A breach of duties may lead to liability or even the loss of the allocation right. In many cases, there are reporting and documentation requirements to the responsible funding authority to ensure the legality of apartment allocation.
