Release value: Definition and legal significance
The release value is a term of high relevance in German law, particularly in connection with expropriation and compensation law. It describes the financial compensation amount to which owners or entitled persons are entitled in certain cases regulated by law as an equivalent for the loss of property rights, in particular ownership of land or real estate, in the context of expropriation measures or comparable state interventions. This amount serves as economic compensation for the disadvantage caused by sovereign measures.
Legal bases and regulations
Statutory basis
The release value is particularly regulated in various laws of public law. The central legal bases include:
- Building Code (BauGB) – especially in reallocation and expropriation procedures (§§ 95 ff., §§ 104 ff. BauGB)
- Act on the Expropriation of Land Ownership (Expropriation Act)
- State expropriation laws
- Administrative law provisions on public law interventions
Depending on the occasion and type of intervention, special laws may apply, such as the Federal Trunk Road Act (FStrG), the Energy Industry Act (EnWG), or the Railway Reorganization Act (ENeuglG).
Purpose of the release value
The release value serves to ensure that affected owners receive full and legally appropriate compensation in the event of compulsory appropriation of their property by the state. The constitutional basis for this is primarily Article 14 paragraph 3 of the Basic Law (GG).
Determination of the release value
Relevant valuation principles
The amount of the release value is usually determined based on the actual value of the item at the time of the state intervention. The following must be taken into particular account:
- The market value according to § 194 BauGB, i.e., the price that would be achieved in normal business dealings.
- Potential value-increasing or value-reducing circumstances (e.g., location, potential uses, contaminated sites).
- While the repurchase value can be a factor in certain sales, in cases of expropriation the actual financial situation is paramount.
Market value
The market value is central to the release value. It is determined by independent experts or by standard land values in accordance with the guidelines of the expert committees for land values.
Stichtag principle
The relevant reporting date for valuation is regularly the date of expropriation or actual appropriation.
Special features in determination
In exceptional cases, the release value can also be calculated on the basis of income values or comparative values. Value-reducing burdens, such as permitted rights of use by third parties, or value increases due to public measures must be considered during the valuation process.
Release value in the context of land reallocation
Regulations in the BauGB
According to §§ 86 to 90 and §§ 95 ff. BauGB, in so-called reallocation procedures, i.e., the reorganization of land ownership for urban development, there is an obligation to pay a release value if owners transfer land during the reallocation process that cannot be compensated otherwise.
Scope and processing
In this context, the release value corresponds to the full value of the withdrawn parcel or part of the parcel. The processing and securing of payment takes place in accordance with the requirements of public law and is subject to supervisory control.
Release value in other areas of law
Agricultural land law
In agricultural land law (e.g., Real Estate Transactions Act, Agricultural Lease Transactions Act), the release value arises in connection with provisions for reducing agricultural areas or when dissolving joint ownership. Here, too, full economic compensation is essential.
Mining law and other special provisions
Mining law (§§ 72 ff. Federal Mining Act) provides for the release value as compensation for land loss following appropriation for mining purposes.
Tenancy and lease law
In tenancy and lease law, the term “release value” may be used to describe an amount to be paid for taking over inventory, fixtures, or rights in connection with the termination or transfer of a contractual relationship. However, this does not constitute a statutory claim, but rather a contractual compensation.
Release value and tax law
The payment of a release value in the event of expropriation or in the context of real estate transactions can have tax implications, for example in the area of income or real estate transfer tax. The tax classification depends on the specific circumstances and the applicable tax laws.
Legal protection and disputes
Administrative procedure
Administrative acts are often issued regarding the release value; objections and lawsuits against their content are permitted. The parties involved can, in particular, have the amount of the release value reviewed by a court.
Compensation courts and ordinary jurisdiction
If no agreement can be reached on the determination of the release value, different courts may have jurisdiction depending on the matter and area of law. In cases of expropriation, special chambers at the regional courts are usually responsible for reviewing and determining the release payment.
Literature and case law
The structure and interpretation of the release value is shaped by extensive academic literature and constant case law, especially from the Federal Administrative Court and the Federal Court of Justice. Central standards are the restoration of financial status, transparency in the valuation procedure, and realistic value determination.
Summary
The release value is a central element in German public law, designed to provide comprehensive protection for affected parties in cases of expropriation and comparable interventions in property rights. Its amount and determination are subject to statutory provisions, intended to ensure full financial compensation. The term is also gaining significance in various other areas of law, with transparency and fair compensation always at the forefront. Proper determination and payment of the release value are essential prerequisites for the legality of state interventions in property positions.
Frequently asked questions
When does the release value become relevant in legal proceedings?
The release value is particularly relevant in a legal context when it comes to the valuation of assets, especially in corporate law, family law, and inheritance law. The release value plays a key role in determining compensation, for example when a partner leaves a company or in the settlement of joint communities such as an inheritance community or a marital community of accrued gains. Here, the release value is the reference point to determine the amount a departing partner or other party can claim as compensation or settlement. In legal proceedings, expert opinions are regularly obtained to determine the release value. Courts take into account especially the contractual arrangements, legal frameworks, and recognized valuation methods so that the interests of all parties are protected. The precise determination of the release value can influence the calculation of the amount in dispute as well as the allocation of costs in the proceedings.
Which legal regulations must be observed when determining the release value?
The legal regulations regarding the release value are found in various laws, depending on the relevant area of law. In corporate law, §§ 738 ff. BGB (for civil law partnerships), the GmbH Act (§ 29 ff. GmbHG), or the Stock Corporation Act (§ 305 ff. AktG) should be mentioned. These provisions regulate how to proceed in disputes between partners or shareholders. In family law, the release value is especially relevant in the calculation of equalization of accrued gains pursuant to §§ 1373 ff. BGB. Inheritance law refers to § 2042 BGB as well as relevant case law, such as the valuation of assets in the context of the settlement of an estate. Furthermore, reference should be made to commercial law provisions, for instance when company values must be determined according to the HGB. In all cases, the current case law of the Federal Court of Justice (BGH) and, where applicable, the Federal Fiscal Court (BFH) must also be taken into account, as these play a significant role in specifying the understanding and application of statutory requirements.
Who bears the burden of proof for the amount of the release value in case of dispute?
Basically, the person who derives rights from the release value, such as the claim for payment of a specific compensation amount, also bears the duty to substantiate and prove its amount. In the context of corporate law, for example, this means that the departing partner or beneficiary must detail and prove the release value that, in their view, should form the basis. In court disputes, expert opinions are often obtained for this purpose, particularly when the value of complex company shares is to be determined. The burden of proof may, however, shift due to contractual provisions if methods of valuation or specific expert procedures are bindingly agreed upon therein. If such special regulations are lacking, the general allocation of the burden of proof under the rules of civil procedure applies.
Which valuation methods are used to determine the release value?
For determining the release value, various valuation methods are used depending on the object being valued and the area of law. In corporate or company law, the income approach is commonly used, which is a recognized standard for determining company value, supplemented by the so-called Stuttgart procedure or other specific valuation models (discounted cash flow, net asset value method). In family and inheritance law, the market value is often used, particularly for real estate or other assets. The choice of method depends on the individual circumstances of the case, statutory requirements, contractual agreements, and current case law. Courts usually rely on objective market value assessments carried out by experts, and, if necessary, on the extent of economic reasonableness for the parties involved.
What role do company agreements or other contractual arrangements play in the release value?
Company agreements and other contractual arrangements can significantly influence the release value. Many articles of association contain specific provisions for calculating the release value, such as stipulating a valuation method, a reporting date, or specific calculation parameters. Such contractual regulations generally take precedence over statutory provisions, provided they do not violate mandatory law or public policy. In the event of a dispute, courts regularly check whether the contractual arrangements are clear, traceable, and reasonable. Unreasonable or highly disadvantageous regulations can be declared invalid and replaced by general statutory provisions. Furthermore, settlement agreements, arbitral opinions, or mediation procedures can also influence the determination and enforcement of the release value.
What legal consequences does an incorrectly determined release value have?
An incorrectly determined release value can have far-reaching legal consequences. If the release value is set too low or too high, this can lead to unjustified transfers of assets between the parties involved. In extreme cases, contesting or reversing the corresponding compensation agreement may become necessary, which may in turn lead to new court proceedings and higher costs. If a party can prove loss due to the incorrect determination, claims for damages may arise, especially if there has been dishonesty or willful misconduct. Moreover, incorrect valuation can have a lasting impact on the company structure, family unit, or inheritance community, as it could endanger the financial existence of individual members. Therefore, precise and legally compliant determination of the release value is particularly important for the benefit of all involved.
