German Communities Demand Good Social Credit Rating When Buying Land

The allocation guideline for the allocation of community-owned building plots in the development plan area “South of Adolf-Reichwein-Strasse” in the Rodenbach community provides an example of applied social credit rating in Germany.

As part of the reallocation process, the municipality of Rodenbach acquires areas to implement the objectives pursued with the land-use planning. The municipal council of the municipality of Rodenbach resolved the following guidelines for the allocation of building sites with a view to a socially and urban-planning sensible building and land policy. The aim is to cover the housing needs of population groups with special housing supply problems, as well as the housing needs of the local population. The priorities are set under a socialist majority in the local council and with an SPD mayor for a family-friendly and sustainable development.

The developer has been entrusted with the development of the building area ‘south of Adolf-Reichwein-Straße’ and thus also with the sale of the building plots. The construction sites are to be allocated according to social criteria and with local residents, taking into account compliance with EU law. The award procedure for the building sites that are owned by the municipality of Rodenbach after completion of the reallocation procedure is regulated by the following award guideline, which comprises a specific rating system.

So-called “local residents’ models”, taking into account the basic right to freedom of movement, shall enable lower-income and less well-off residents to acquire adequate housing in their home municipality. In this way, an intact socially and demographically balanced population structure and social cohesion in the community should be preserved.

The following criteria are used in the specific case of Rodenbach and give an example of socialism in Germany. The following criteria are believed to ensure fair and traceable allocation of the properties:

1. Applicants’ need according to social criteria such as number of children, relatives in need of care,
2. Applicants’ need for income,
3. Exercising an honorary position,
4. Applicants’ reference to the municipality of Rodenbach, taking into account the length of time their main residence, employment / business practice.

The municipality board is authorized to allocate part of the land in a direct procedure, provided there is a public interest (e.g. doctors, pharmacists).

The building site applicant list is the basis for awarding building plots according to a point system.

Requirements for an Application

In the award procedure, the applications of the persons are considered who are entitled to apply according to the criteria listed here and who can prove the correctness of the information if required by submitting appropriate evidence upon request. Information that cannot be verified cannot be taken into account.
It is expressly pointed out that all information provided by the applicant must be correct and complete. This must be confirmed with a signature when applying. Incorrect or incomplete information can lead to exclusion from the award procedure or, after the award decision, to reversal.

1. Asset limit: Applicants may have a maximum of assets equal to the value of the property. Applicants are not allowed to own a plot of land that can be built or a property in the municipality of Rodenbach. Real estate property outside the municipality of Rodenbach, on the other hand, is counted as assets, but is not an exclusion criterion.
2. Upper income limit: Applicants may earn a maximum income (total amount of income) as an average according to the tax assessments of the last three years, taking into account the average nationwide annual income. The following income limits must not be exceeded: Individual € 51,000, couple € 102,000. If the acquisition is made as a couple, the calculation is based on the added income in relation to twice the average income. A tax exemption of € 7,000 per dependent child must be added to the upper limit.
3. Applicants must be of legal age with unlimited legal capacity at the time of application.
4. Applicants must meet the requirements listed in the procurement guidelines.
5. Only one application will be considered per household: Only one property application can be submitted per couple, family, registered partnership, cohabiting community, cohabiting community or single parent.
6. Applicants undertake to acquire the property in their own name. Applicants must also be the contractual partner or purchaser in the sales contract. A transfer of the property to third parties (also within the relatives) is excluded.

Award criteria

The eligible applications will be evaluated according to the following award criteria and the point system. The amount of points achieved is decisive here. A ranking list will be created. The higher the number of points, the further up the ranking is. If the points are equal, then chance decides.

Social Credit Rating system

The land is awarded by the municipality board. For each applicant a score is calculated. The following point system is used:

General terms and conditions

1. The purchase process takes place on the basis of a uniform standard purchase contract.
2. As the seller, the municipality of Rodenbach will appoint the notary’s office.
3. If the applicant confirms in writing within eight weeks, a notification is sent to the notary to set a date for the notarization. The purchase agreement must be notarized within a period of 3 months after the decision.
4. If a purchase contract does not come into existence, plots that become available again are offered individually to successors in accordance with the order of criteria.
5. It is assumed that the intended construction project can be financed by the applicants. A current confirmation of financing must be submitted with the application.
6. 30% of the purchase price is due upon certification, 70% of the purchase price upon completion of the development (preliminary stage expansion).
7. In certain cases, the seller reserves the right to repurchase the property in accordance with §§ 456 ff. BGB or the obligation to make additional payments: a. In the event of incorrect information from the applicant in the award procedure. b. In the event of a violation of personal use and sales restrictions. c. In the event of a breach of the construction and purchase obligation.
8. Right of repurchase: When exercising the right of repurchase, the municipality has to repay the purchaser the purchase price minus any depreciation, encumbrances and plus connection costs; Likewise, the building value is reimbursed for developed properties. The building value is determined by the responsible expert committee (Office for Land Management).
9. Additional / additional payment obligation: If the return transfer is not used, the purchaser undertakes to reimburse an appropriate part of the discount to the municipality. This percentage is calculated from the period that is missing up to 10 years of use, i.e. a refund of the discount of 10% per year.
10. Construction / purchase obligation: With the purchase of the property, the purchaser undertakes to build a residential building within a period of 3 years from the completion of the development (preliminary expansion) according to the stipulations of the development plan (ready for occupancy).
11. Own use: The properties are sold with a personal use obligation. This means that the purchaser undertakes to live in the house without interruption for a period of 10 years after it is ready for occupancy. If the property consists of 2 residential units, the buyer has to live in one residential unit with primary residence for the specified period. If you move out earlier, the obligation of the percentage reimbursement of the discount to the municipality according to point 9 also applies here.
12. Sale restriction: If the property is sold or given away in whole or in part, the municipality of Rodenbach has the right to buy back the property.

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Advancement

The municipality of Rodenbach grants a child bonus in the form of a discount on the sales price on the purchase of building land for the construction of residential buildings for personal use. The children for whom the applicant is entitled to child benefit and who live in his household when the purchase contract is concluded and are registered with their main residence are taken into account. Applicants receive a discount of € 5 per child per square meter. The maximum discount is limited to € 15 per applicant.

Note on legal entitlement

Citizens have no claim, since there is no legal claim to the allocation of a communal building plot. There is also no legal entitlement to the maintenance of the procurement guidelines. By participating in the selection process, the interested parties declare that they agree that a judicial review of the award process is excluded.

Reservation

A plot of land is reserved for 2 months without obligation and free of charge. If a purchase decision is not yet possible, the reservation will be withdrawn and the property will be released again for new interested parties. The municipal council of the Rodenbach municipality discussed the allocation of the municipality’s own building plots in the construction area “south of Adolf-Reichwein-Straße” at the public council representatives meeting on November 12th, 2020 and decided to make the allocation in accordance with this allocation guideline.