Reasonableness (Renovation)

Reasonableness (Renovation) is a legal concept used in the context of renovation obligations to determine whether a property owner can reasonably be expected, both financially and personally, to carry out modernization or repair measures. It plays a role in, among other things, the Building Energy Act (GEG), building and regulatory law, and tenancy law. Reasonableness limits statutory renovation obligations and protects owners from being financially overwhelmed by disproportionate requirements.

Reasonableness under the Building Energy Act (GEG)

Under certain circumstances, the GEG requires owners of existing buildings to carry out energy-efficiency renovations-such as replacing old heating systems or insulating roofs. Regarding a change in ownership, the following applies: Anyone who acquires a building with more than two apartments must meet certain minimum energy standards within two years. If the renovation is not economically reasonable-because the costs are disproportionate to the achievable benefits or property value-an exemption may be requested (Section 102 GEG). The relevant building authority is responsible; the exemption must be well-documented and justified.

Specifically, this means: If a building with 200 m² of living space in a peripheral location has a market value of 180,000 euros, and a complete energy-efficiency renovation (insulation, heating system replacement, windows) would cost around 120,000 euros, the proportionality of the costs is seriously in question. If the renovation costs exceed 50-60% of the market value, courts and authorities consider economic unreasonableness to be well-founded-though without fixed statutory thresholds. The decisive factor is always the individual assessment of each specific case.

Reasonableness in Tenancy Law

In tenancy law, reasonableness is relevant when modernizations are announced: Tenants may object to a modernization if it constitutes an unreasonable hardship for them (Section 555d(2) of the German Civil Code). From the landlord’s perspective: The cost allocation to tenants (11% of the modernization costs per year) is also subject to reasonableness limits-the rent must not increase to such an extent that it places an unreasonable burden on the tenant’s financial situation. In this context, courts weigh the interests of the landlord, the interests of the tenant, and the public interest in the modernization of the property.

The reasonableness assessment becomes particularly relevant in cases where tenants raise hardship objections: If, following an energy-efficiency modernization, a tenant can no longer afford a rent increase of 200 euros per month and is simultaneously suffering from health issues, the court may limit the tenant’s obligation to tolerate the modernization, at least temporarily. Since the 2019 rental law reform, the so-called cap has applied: Rent may not increase by more than 3 euros/m² over a six-year period due to modernization-related rent increases-and for initial rents below 7 euros/m², the increase is limited to just 2 euros/m².

Economic Reasonableness as a Ground for Exemption

Whether a renovation is economically reasonable depends on the ratio of renovation costs to achievable benefits, the market value of the property, and the owner’s financial capacity. In practice, authorities often follow the rule of thumb: if the renovation costs exceed the property value achievable after the work is completed, the unreasonableness of the renovation is at least well-founded. Expert opinions from a publicly appointed expert are the most important evidence in such proceedings.

In addition, personal circumstances can also influence reasonableness: the owner’s advanced age, serious illness, imminent abandonment of the property, or ongoing inheritance disputes. These factors are weighted differently by authorities and must be substantiated with evidence on a case-by-case basis. Whoever invokes unreasonableness bears the burden of proof-a blanket assertion without documentation is not sufficient.

Another aspect of reasonableness concerns historic preservation: For buildings under historic preservation, implementing energy efficiency measures may be structurally impossible or incompatible with historic preservation laws. In such cases, owners may-after consultation with the historic preservation authority-apply for exemptions from GEG requirements, as proportionality is not structurally feasible.

Renovation Obligations Upon Change of Ownership: What New Owners Need to Know

According to GEG § 47, anyone purchasing a property also assumes existing renovation obligations, provided they must fulfill these within two years. For buyers, this means: Before purchasing, check which GEG obligations apply to the property, realistically calculate the costs of compliance, and, if necessary, deduct them from the purchase price. The energy performance certificate provides initial indications of the building’s energy efficiency; a comprehensive energy consultant’s report clarifies specific mandatory measures and their costs.

Buyers who wish to claim that a required measure is unreasonable must actively file a request with the building authority-ideally before the two-year deadline expires. Simply failing to act is not a permissible option and can result in fines.

Practical Tip for Property Owners in Nuremberg and Franconia

In Nuremberg and the Franconia metropolitan region, there is a comparatively large stock of older buildings from the Wilhelminian era and the post-war period, where energy-efficiency renovation obligations under the GEG regularly come into play. Anyone purchasing such a property who has doubts about the economic feasibility of certain measures should commission an energy consultant’s report at an early stage and, if necessary, submit an application for exemption. We are happy to put you in touch with certified energy consultants and experts in the region.

The issue of economic feasibility is particularly relevant in Nuremberg’s city center and in neighborhoods such as Gostenhof or St. Johannis, where older buildings are concentrated and historic preservation regulations often apply. We are familiar with the local authorities, the application procedures, and typical scenarios-and help our clients navigate the administrative process efficiently without missing deadlines unnecessarily.

Frequently Asked Questions

As a new owner, what must I renovate under the GEG?

When purchasing a building with more than two residential units, you must, among other things, insulate the top floor ceiling (if unheated) and replace a heating system that is older than 30 years and does not use low-temperature or condensing technology within two years. Exceptions apply in cases of economic unfeasibility-however, these must be actively applied for and documented.

How do I apply for an exemption from renovation obligations?

The exemption must be applied for in writing with the competent building authority (in Nuremberg: the City of Nuremberg Building Authority). You must include proof of economic unfeasibility-ideally an expert opinion-a description of the planned measures that can still be implemented, and a cost estimate. The more complete the documentation, the faster and smoother the process will be.

Can a tenant refuse a renovation measure?

Yes, in cases of undue hardship pursuant to Section 555d of the German Civil Code (BGB), the tenant may object to the modernization. The court will then weigh the interests involved. Mere inconvenience or disruption caused by noise and dirt during the construction period is not sufficient; serious health, social, or economic burdens are required to successfully justify the objection.

Does the reasonableness threshold also apply to voluntary renovations?

No-reasonableness is only relevant for renovation measures mandated by law or ordered by an official decree. Those who modernize voluntarily can determine the scope of the measures themselves. Furthermore, the allocation of modernization costs under tenancy law is not tied to any reasonableness threshold for the owner-here, only the upper limits at the tenant’s expense apply.

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