The parties are in dispute about the exercise of a municipal right of first refusal for a residential plot of land.

The holder of the right of first refusal who is summoned to attend the proceedings as a third party whose rights may be affected (hereinafter summoned third party) is the owner of a plot of land located in H.strasse ... in Berlin. It is developed with a multi-apartment building constructed in 1889, which encompasses a total of 20 rented flats and two commercial units distributed over a five-storey front building, a side wing and a rear wing. In 2004, modernisation and maintenance measures were performed using public funding based on a funding contract with the defendant federal state. The plot of land is located in the territorial scope of application of the preservation ordinance issued by the Borough Office (Bezirksamt) of Friedrichshain-Kreuzberg for the "Chamissoplatz" area; this ordinance serves to protect the composition of the residential population as a so-called milieu protection by-law in accordance with section 172 (1) first sentence no. 2 of the Federal Building Code (BauGB, Baugesetzbuch). Furthermore, an ordinance of the defendant federal state, according to which the creation of residential property located in preservation areas is subject to approval, applies to the plot of land. Finally, the plot is located in the scope of application of a (historical but still applicable) development plan (Baunutzungsplan) which determines the area as a general residential area.

Based on a notarised contract dated 15 May 2017 the summoned third party sold the plot of land at a price of EUR 3.4 million to the claimant. The claimant joined the funding contract, the binding conditions of which will expire at the latest in 2026. The Borough Office offered the claimant an agreement to avert the right of first refusal, which the claimant refused to accept. The federal state-owned housing association WBM signed a declaration of undertaking on 10 August 2017 as the third-party beneficiary of the right of first refusal.

In its notice of 11 August 2017, the Borough Office refused the application to issue a negative certificate and exercised its right of first refusal for the benefit of WBM, referring to section 24 (1) first sentence no. 4 BauGB.

The appeal on points of law was successful. The Federal Administrative Court (BVerwG, Bundesverwaltungsgericht) set aside the notice concerning the exercise of the right of first refusal and obliged the authority to issue a certificate concerning the non-exercise of the right of first refusal.

11 The appeal on points of law is admissible and well-founded. The challenged judgment violates federal law (section 137 (1) no. 1 of the Code of Administrative Court Procedure (VwGO, Verwaltungsgerichtsordnung)). Based on the factual findings, the Senate may decide itself in line with the application concerning the asserted request for annulment and the issuance of an administrative act (section 144 (3) first sentence no. 2 VwGO).

12 In the view of the Court of Appeal, the defendant lawfully exercised the right of first refusal concerning the affected plot of land owned by the summoned third party based on section 24 (1) first sentence no. 4 in conjunction with section 172 (1) first sentence no. 2, section 24 (3), section 27a (1) first sentence no. 1 BauGB. This assessment is precluded by the ground for exclusion of the exercise of the right of first refusal under section 26 no. 4 second alternative BauGB.

13 1. The plot of land of the summoned third party is located in the scope of application of the "Chamissoplatz" preservation ordinance of 25 May 2005 issued on the basis of section 172 (1) first sentence no. 2 in conjunction with section 246 (2) first sentence BauGB, section 30 (1) first sentence of the Act of the Federal State of Berlin Implementing the Federal Building Code (AGBauGB-BE, Gesetz zur Ausführung des Baugesetzbuchs). The parties do not question the lawfulness of this ordinance; nor does the Senate see that there are compelling reasons for doubting its lawfulness. Therefore, the defendant has a right of first refusal according to section 24 (1) first sentence no. 4 BauGB. It may only be exercised in accordance with section 24 (3) first sentence BauGB if this is justified by the common good. The scope of this indefinite legal term is (...) limited in a normative way by the grounds for exclusion of the exercise of the right of first refusal under section 26 BauGB in the sense of a negative constituent element (negative Tatbestandsvoraussetzung). The list of grounds stated there specifies exemplary cases where the common good typically does not justify exercising the right of first refusal (see BVerwG, decision of 29 June 1993 - 4 B 100.93 - (...)). In the present case, section 26 no. 4 BauGB precludes the exercise of the right of first refusal. (...)

14 2. Under section 26 no. 4 BauGB, exercising the right of first refusal is excluded where - first - the plot of land is developed and used in line with the stipulations in the zoning plan or the aims and purposes of the urban development measure, and - second - a physical structure built on the plot reveals no deficits or defects within the meaning of section 177 (2) and (3) first sentence BauGB.

15 The latter condition is met according to the binding factual findings of the Court of Appeal (section 137 (2) VwGO). The condition of the premises sold does not impede its intended use; it is also in line with the general requirements for healthy living and working conditions. The first condition is also met.

16 a) This is not precluded by the fact that, according to the factual findings of the Court of Appeal based on federal state law, which is not subject to an appeal on points of law, and as such have also not been challenged by means of any complaints within the appeal on points of law, the number of floors stipulated in the applicable development plan is exceeded. This is because the ground for exclusion of plan conformity of the development and use (section 26 no. 4 first alternative BauGB), referring to all stipulations possible in accordance with section 30 BauGB since the Act does not provide for any limiting requirements (...), does not apply if exercising the right of first refusal is justified with safeguarding the aims of a preservation by-law (Erhaltungssatzung) regardless of the situation under planning law.

17 The Act has combined grounds for exclusion for various types of rights of first refusal in the two alternatives of the first condition in section 26 no. 4 BauGB; these can be distinguished however, concerning their objective and they are distinguished also in terms of their point of reference. The very use of the definite article (the zoning plan) suggests that alternative 1 refers solely to the scenario where the exercise of the right of first refusal serves to ensure compliance with the stipulations contained in a zoning plan (section 24 (1) first sentence no. 1 BauGB). The explanatory memorandum to the draft act supports this interpretation when it exclusively - even though not taking exhaustive account of the entire regulation - refers to section 24 (2) second sentence no. 1 of the Federal Building Act (BBauG, Bundesbaugesetz) and therefore to the right of first refusal under 24 (1) no. 1 BBauG (Bundestag printed paper (BT-Drs., Bundestagsdrucksache) 10/4630 p. 83) as a model regulation, but does not refer to the right of first refusal under section 24a BBauG, with its third sentence specifically not referring to section 24 (2) second sentence BBauG, even though this does not take exhaustive account of the regulation as a whole. The scenarios in alternative 2 complement this: The different scopes of application may only overlap if the zoning plan specifically aims at the implementation of the urban development measures (...); in the present case this can be ruled out already due to the temporal sequence of events.

18 b) Section 26 no. 4 second alternative BauGB is applicable in favour of the claimant.

19 aa) The urban development measures covered by this provision also comprise the issuance of a preservation by-law under section 172 BauGB. This term, as the counter term to zoning plan, must be understood in the broad sense, similar to section 25 (1) first sentence no. 2 BauGB; it covers all measures related to urban development that help the municipality to fulfil its planning ideas (see BVerwG, decisions of 14 April 1994 - 4 B 70.94 - (...); of 8 September 2009 - 4 BN 38.09 - (...) and of 19 December 2018 - 4 BN 42.18 - (...)). They may also relate to the protection and preservation of existing building stock under urban development aspects (...) and may also serve aims and purposes in this context as a sub-aspect of "municipal social planning" (see BT-Drs. 7/2495 p. 53) - first and foremost by the respective use of the existing building stock.

20 The fact that sections 172 et seqq. BauGB do not use the term "measure" is irrelevant. This is what distinguishes the provisions concerning the preservation by-law from other urban development instruments listed in the second chapter of the Federal Building Code (special urban development law), such as in particular the redevelopment measures (sections 136 et seqq. BauGB) and development measures (sections 165 et seqq. BauGB), which are directed at changing and redesigning a specific area. However, the preservation by-law that is directed at the protection of an existing building stock, including municipal possibilities of exerting influence that are based on it, is part of the special measures law under urban development law (...). Section 187 (1) first and second sentence BauGB are also based on the assumption of a comprehensive term urban development measure; since it includes among other things all by-laws issued on the basis of the Federal Building Code (...). In the context that is relevant here, this broad approach can also be found in the explanatory memorandum, when it refers to use "in accordance with the measures" in connection with the authority to prevent the exercise of a right of first refusal with reference to section 24a second sentence BBauG concerning the right of first refusal in preservation areas (BT-Drs. 10/4630 p. 83). The documents used when drafting the act, with the title "Materials on the Federal Building Code - Reports of the working and discussion groups on the Federal Building Code" ("Materialien zum Baugesetzbuch - Berichte der Arbeitsgruppen und der Gesprächskreise zum Baugesetzbuch") (publication series 03 "urban development studies" (Schriftenreihe 03 "Städtebauliche Forschung"), issued by the Federal Minister for Regional Planning, Building and Urban Development (Bundesminister für Raumordnung, Bauwesen und Städtebau), issue no. 03.108, 1984; see BT-Drs. 10/4630 p. 49), are also based on the same understanding of this term (p. 137).

21 bb) The ground for exclusion therefore also applies in cases of property sold on account of a right of first refusal in areas that fall within the scope of a preservation by-law (section 24 (1) no. 4 in conjunction with section 172 BauGB) if the plot of land is developed and used in line with the aims and the purpose of the by-law. What is decisive also in this case are the actual circumstances at the time of the last decision taken by the authorities on the exercise of the right of first refusal, whereas future potential developments are irrelevant (...). This interpretation of the norm is based on the sufficiently clear and unequivocal wording of the provision in this respect, which cannot be overcome using different interpretation methods either.

22 (1) The Act uses the present tense ("is developed and used in line with"), which first and foremost describes a current state and is not looking at future circumstances and developments. The fact that both the development and the use contain an element of permanence does not change anything since the Act is obviously based specifically on a certain moment in time in a continuum. It is true that, apart from clear time indications, it would also, from the context, be grammatically possible and, in particular in colloquial language, there could be an intent, to refer to a moment in the future when using the present tense. However, the very reference to the preservation aim, that relates to the (continued) conservation of a current state, is not sufficient to assume that the grammatically exceptional case exists here. Nor does the legislative history contain any indications that would suggest a different understanding of the wording. According to the explanatory memorandum to the draft act of the Federal Government (BT-Drs. 10/4630 p. 83 <concerning section 26>), section 26 no. 4 BauGB was designed to reflect the provisions in section 24 (2) second sentence no. 1, third sentence first half-sentence BBauG. However, section 24 (2) second sentence no. 1 BBauG does not contain any indications of a future-related use of the present tense.

23 The wording of section 24 no. 4 BauGB may also not be described as unclear - and therefore requiring interpretation - on the grounds that, in an interpretation based on the wording, the right of first refusal under section 24 (1) first sentence no. 4 BauGB would lose its spirit with reference to the material substance of section 172 BauGB (...) Rather, it is alleged then in fact that the provision required an interpretation that corrected and/or amended the wording based on teleological considerations (...).

24 (2) If, according to its clear wording, section 26 no. 4 BauGB uniformly bases the assessment of cases of rights of first refusal concerning the question of whether the development and use of the plot of land are in line with planning and measures on the current state, the ground for exclusion of the exercise of the right of first refusal understood in this way could only be left unconsidered in cases of rights of first refusal in the area of a preservation by-law if the requirements of a teleological reduction (teleologische Reduktion) of the norm applied and the provision that was too broadly worded had to be limited to the scope of application intended for its spirit and purpose, thereby allowing a future-oriented assessment within the meaning of section 24 (3) first sentence BauGB (see, for example, BVerwG, judgments of 7 May 2014 - 4 CN 5.13 - (...) para. 14 and of 22 May 2014 - 5 C 27.13 - (...) para. 21 et seq. with further references). However, it is not possible to prove with the required clarity that the legislative concept on which the recast concerning the right of first refusal in the Act on the Federal Building Code (Gesetz über das Baugesetzbuch) are based is only reflected incompletely in the wording of the norm and therefore required a corresponding correction of an "unsuccessful" legal text in this regard (...). In contrast, it is not sufficient to state that only an interpretation correcting the wording of the Act would lead to a provision considered to be desirable and reasonable. Creating such a provision against the backdrop of new developments and pressing problems in the housing market is the task of the legislature.

25 It is not apparent from the legislative materials concerning the design of the right of first refusal in the Federal Building Code that the right of first refusal under section 24a BBauG serving to safeguard urban development preservation aims was meant to be transferred to the Federal Building Code unchanged concerning its content.

26 The aim of the amendments to the law in terms of the right of first refusal generally was to streamline the provisions or to recast them for reasons of simplification (BT-Drs. 10/4630 introduction part B no. 11, p. 50, 52). Based on the experience gained, the idea was to limit the right of first refusal "to the cases of real urban development need" (BT-Drs. 10/4630 p. 56). Due to little importance in practice, the rights of first refusal under section 24 (1) no. 2 and section 25a BBauG were meant to be omitted. The limited relevance of the right of first refusal under section 24a BBauG was also very clear for the legislature. Studies to which the "Materials on the Federal Building Code" ("Materialien zum Baugesetzbuch") used when drafting the Act refer (p. 135), show that the right of first refusal under section 24a BBauG had never been exercised and its use had only been threatened four times - in each case outside of preservation areas (...). The right of first refusal in section 24 (1) first sentence no. 4 BauGB was also limited to the areas determined in the by-law in order to reduce administrative expenditure, which, in view of the small proportion of cases where a right of first refusal had actually been exercised, was ultimately superfluous (...); according to the wording of the provision, such a requirement had not been intended previously (...). It cannot, however, be concluded from the wording "No. 4 corresponds to section 24a of the Federal Building Act" (BT-Drs. 10/4630 p. 82) that the right of first refusal was meant essentially to be left unchanged in this regard, apart from the territorial scope of application (...). This assumption is precluded by the fact that the constituent elements are no longer connected to future intended use (...). Exactly the same thing results from the general determination according to which municipalities "still are entitled to the rights of first refusal established by law (...) under the previous section 39h BBauG in areas where the by-law applies" (BT-Drs. 10/4630 p. 56). It is because this does not say anything about the actual content of this right. Rather it is shaped in detail by means of the recast.

27 With the condition for exercising the right of first refusal under section 24 (3) BauGB the old legal situation is repeated with regard to a justification by the common good (section 24a third sentence in conjunction with section 24 (2) first sentence BBauG). In contrast, the recast concerning the grounds for exclusion of the exercise of the right of first refusal change the legal situation insofar as these grounds now apply uniformly to all rights of first refusal and the ground for exclusion that development and use is in line with the plan (section 24 (2) second sentence no. 1 BBauG) now also applies to development and use in line with a measure (see also BVerwG, decision of 29 June 1993 - 4 B 100.93 - (...)). This is a difference from the provision suggested in the report of Working Group 5 which, in paragraph 4 of the suggestion concerning the exclusion of the right of first refusal, still limited itself to development and use in line with the plan following the existing provisions and was therefore able to note that the grounds for exclusion in the applicable law will survive (...). If the draft act deviates from this and extends the scope of the ground for exclusion, there are many indications that the legislature was in favour of redesigning the content of the right of first refusal in the field of preservation by-laws. In the further course of parliamentary consultations this question was not touched upon any further - as far as this is documented in writing (see BT-Drs. 10/6166 p. 135 et seq.), the Bundesrat did not formulate any recommendations concerning sections 24 to 26 of the draft BauGB (see Bundesrat printed paper (BR-Drs., Bundesratsdrucksache) 575/1/85 p. 42 to 44), and the Act was adopted like this. This means that the right of first refusal is limited in preservation areas, but it does not lack any scope of application. This scope remains at least in cases where a physical structure displays deficits or defects within the meaning of section 177 (2) and (3) first sentence BauGB (...). There is consequently no clear conflict between the intention of the regulation formulated in the explanatory memorandum to the draft act and the understanding of the legal provision that would make it seem reasonable to correct it by interpretation. Rather, the legislature was free to introduce such a limitation of the scope of application of the right of first refusal in the interest of harmonising as well as simplifying the various rights of first refusal - not least against the backdrop of the (at the time) minor practical importance of this urban development instrument. Simplification of the right of first refusal may also be evident in this case in that, firstly, the difficulties related to sufficiently reliable proof of future intended use that is contrary to the preservation aim will no longer exist (...) and, secondly, it is no longer necessary to make a distinction as to the extent to which the preservation aims justify exercise of the right of first refusal or the possibilities of rejecting an approval under section 172 (4) BauGB may be enough in order to achieve these aims (...).

28 Nor, furthermore, do the recast provisions in section 27 (1) first sentence BauGB concerning the right to avert the right of first refusal prove that the legislature had in mind exercise of the right of first refusal to prevent imminent changes of use in preservation areas. Exercise of the right of first refusal may be averted if the purchaser is able to use the plot of land in line with the aims and purposes of the urban development measure within a reasonable period of time. The precondition for averting exercise of the right of first refusal is therefore timely action. There is, however, no mention of an obligation to refrain from a change for which there is a future risk.

29 3. If, by virtue of the law, only use in line with the measure at the time the right of first refusal is exercised is decisive, exercising the right of first refusal is excluded based on the findings of the Court of Appeal that correspond to the parties' submissions. The challenged notice is unlawful and must be annulled (section 113 (1) first sentence VwGO). The action accordingly also meets with success insofar as it aims to oblige the defendant to issue a negative certificate in accordance with section 28 (1) third sentence BauGB (section 113 (5) first sentence VwGO).