The EPH Group of Czech entrepreneur Daniel Kretinsky through its subsidiary EP Logistics International a.s. has acquired all shares in LOCON LOGISTIK & CONSULTING AG (“LOCON”).

LOCON is a licensed railway carrier based in Berlin with about 150 employees. The company operates about 30 locomotives throughout Germany.

EP Logistics International a.s. was advised by DSC Legal throughout the entire transaction.

Smart and to the point.

DSC Legal is specialized in advising on all legal and notarial aspects of real estate transactions.

Due to the legal support of various corporate acquisitions and mergers, we have been able to constantly strengthen our M&A advisory practice in recent years.

We advise our domestic and international clients in all areas of real estate law, corporate law, banking and finance law, construction and architectural law, the law regarding startups and venture capital and IP/IT law for domestic and cross-border matters.

On July 4, 2019, the European Court of Justice (ECJ) found in the infringement proceedings against the Federal Republic of Germany initiated by the European Commission (C-377/17) that Germany had infringed Article 15 of the so-called Services Directive (1) by imposing binding fees on has maintained the planning services of architects and engineers.

(1) Directive 2006/123 / EC of the European Parliament and of the Council of 12 December 2006 on services in the internal market

The essential reasons for the decision:

First of all, the ECJ notes that the Services Directive is also applicable to purely domestic matters without foreign reference.

The minimum and maximum rates for architect and engineer design services would be compatible with the objectives of the Services Directive only if they did not constitute discrimination and were necessary and proportionate to the achievement of a overriding reason in the public interest (see Article 15 (2) (g)) and paragraph 3 of the Services Directive).

A direct or indirect discrimination effect of the maximum and minimum rates of the HOAI has been denied by the ECJ. The ECJ is also of the opinion that the minimum rates of the HOAI due to the specificities of the German market serve the overriding reasons of general interest: the quality of planning services, consumer protection, construction safety, the preservation of building culture and ecological construction. However, according to the ECJ, the national legislation in question is only capable of attaining the intended objective if it pursues that objective in a systematic and coherent manner, that is to say, in accordance with that provision. coherently pursued. The ECJ complains that the objective of maintaining a high quality of planning services is inconsistent with the minimum rate, because in Germany planning services can be provided by service providers who have not demonstrated their professional aptitude. This is to say that there are no minimum guarantees to ensure the quality of these benefits when making the payments subject to these minimum rates

According to the ECJ, the maximum rates of the HOAI can in principle contribute to consumer protection by increasing price transparency and preventing excessive price increases. As a result, the maximum rates are disproportionate. In the view of the European Court of Justice, it would be sufficient to provide customers with price orientations for the various categories of services mentioned by the HOAI.

Consequences for the practice:

It should first be noted that the HOAI is a pure price right. Which architects / engineering services are to be provided is determined solely by the agreement of the parties. To determine the architects / engineers owed, the HOAI can be used for the conclusion of the contract. Nothing changed about that. The HOAI remains applicable with the exception of the regulation of the maximum and minimum rates in § 7 (1) of the HOAI. The provision in § 7 (1) of the HOAI is likely to retain its validity, but in the version which is removed from the anti-Community law:

"The fee is based on the written agreement that the contracting parties make when placing the order."

However, as a result of the ECJ's ruling, minimum sentence actions by which an architect / engineer seeks payment of an increase in the amount of a fee agreed in the contract to the minimum amount must now be dismissed as unfounded. The first recent judgments show the future tendency in case law (see, for example, OLG Celle, judgment of 17.07.2019 - 14 U 188/18 - not final).

Outlook:

The decision of the ECJ is final. How the legislature will react to the judgment of the ECJ is still open. It is conceivable, but not the only way to make it possible, that the provision of architects 'and engineers' services should be more strictly regulated in order to maintain the minimum rate. However, this also requires compliance with Community law. The maximum rates of the HOAI will certainly no longer exist after the HOAI amendment.

On 23.05.2019 the second event of the event series "Immodrinks" took place. With good drinks in a relaxed atmosphere, we highlighted current issues around the property and took the opportunity to exchange ideas and networking was.

The event focused on current corporate real estate (CRE) trends that have established themselves as an asset class. They offer companies without a real estate business core business the opportunity to develop their entrepreneurial potential even better and react more calmly to cyclical fluctuations.

We were particularly pleased that Andrew Coombs (CEO of Sirius Facilities GmbH and board member of the Corporate Real Estate Initiative)

on the topic THE CORPORATE REAL ESTATE TREND IN THE GERMAN REAL ESTATE MARKET 2019 held the keynote.

The event took place in the offices of DSC Legal Rechtsanwaltsgesellschaft at Pariser Platz 3, 10117 Berlin.

We were delighted to welcome numerous guests to the event, which was hosted by DZ Hyp AG, DSC Legal Rechtsanwaltsgesellschaft mbH and geomap GmbH.

Since last year, DSC Legal has been actively supporting the German Association for Small and Medium-sized Businesses, the German Business Association e.V. (Bundesverband mittelständische Wirtschaft, Unternehmerverband Deutschlands e.V. - "BVMW") in the implementation of its new SME initiative "Job plus Dwelling" (German: „Job plus Wohnung“). The initiative goes back to a position paper of the BVMW in which the association (it represents more than 900,000 businesses together with its cooperation partner associations) called for policies to improve the framework conditions for the construction of company-owned apartments. Author of the conception and the position paper is the attorney-at-law and notary public Dr Peter Diedrich (Managing Partner of DSC Legal), who serves in an honorary capacity as spokesman for the Legal Committee and Deputy Chairman of the Arbitration Panel of the BVMW.

Trigger for the BVMW initiative is the acute shortage of housing and specialist staff, which is particularly noticeable in the major conurbations. In Berlin, Frankfurt, Munich, Hamburg and other major German cities, where living space is becoming increasingly scarce and expensive, well-paid and qualified specialists often have no chance to rent an affordable flat. At the same time, companies are sometimes forced to reject lucrative contracts because they are unable to recruit specialist staff necessary to get the job done. In view of the increasing attractiveness of urban life, the lack of housing is likely to increase even more in the future. Scientists predict that by 2050 more than 80 percent of people will live in cities.

While policymakers have identified and named the problem, the measures taken so far have shown little success. To implement its project to build 1.5 million new dwellings in the current legislative period until 2021 (so-called housing offensive – „Wohnungsoffensive“) and to secure affordable housing, the German Government together with the municipal umbrella organizations and the associations combined in the "Alliance for Affordable Housing and Building" („Bündnis für bezahlbares Wohnen und Bauen“) agreed on the joint implementation of a comprehensive package of measures at the "Housing Summit 2018". In a document summarising the results of this summit meeting which was held on 21 September 2018, the construction of company-owned dwellings was expressly emphasized as a valuable contribution to improve the situation in strained housing markets. Employee housing provides a "great advantage in recruiting employees" and "can be decisive in the choice of the employer". To coordinate the implementation process at the federal level, an interministerial committee of state secretaries headed by the Federal Ministry of the Interior was established.

The BVMW's new SME initiative continues the tradition of company-owned apartments, which had fallen out of fashion after many of the industrial corporations had disposed of their company housing stock. The offer "Job plus Dwelling" will make it much easier for companies to attract qualified specialists and to retain them. That makes employee housing attractive again today.

Many small and medium-sized enterprises would be able to build dwellings for their employees on their own. However, if several enterprises combine their efforts according to the motto "together we are strong" and form a cooperative, the construction of new staff apartments will be considerably more realistic.

At least three companies set up a cooperative for the purpose of attracting potential employees and keeping existing staff by providing affordable dwellings. Member companies send from their midst authorized persons to the management board and the supervisory board of the cooperative. An independent service company supports the cooperative in implementing its purpose on the basis of a management contract.

Each member receives the requested number of occupancy rights to apartments to be designated in advance as part of the membership of the cooperative. Occupancy rights give the right to determine which persons (employees) shall be entitled to use the respective apartments on the basis of a lease agreement with the cooperative. The cooperative then acquires land (ownership or leasehold) for residential development. A pilot project currently implemented in Berlin calculates the costs for acquisition and development at EUR 2,215 per m² of living space.

The cooperative enters into lease agreements with the employees who have been nominated by the member companies on the basis of the occupancy rights. The pilot project in Berlin provides for a net rent of EUR 6.50 per m² of living space, which corresponds to the requirements for promotion of social housing projects by the Federal State of Berlin.

In addition to the capital contributions of the member companies, financing will be provided, in particular, through loans from cooperative members and credit institutions, as well as loans and grants from public development banks (e.g. Investitionsbank Berlin - IBB).

Affordable housing in major conurbations is only feasible where cost-effective construction is made, and land does not have to be acquired at market value, but is provided by the SMEs or the respective municipality below market value or as leasehold.

In order to implement future construction projects under the BVMW‘s SME initiative as quickly and cost-effective as possible, a serial and modular construction method will be applied. Modern modular construction is sustainable and meets the requirements of the promotional bank KfW with regard to energy efficiency. The construction period for multi-storey residential buildings in serial construction is currently a few months, at costs which are far below the usual construction costs. It remains to be seen to what extent the federal states will facilitate the approval procedures and requirements for serial and modular construction by harmonizing the building regulations.

The building plot can also be located in an heavily built-up urban area or commercial area to allow employees short distances between work and home. The legislator enacted the required legislative amendment in 2017 by introducing the new land-use area category of "urban areas" („Urbane Gebiete“) pursuant to section 6a of the German Land Utilisation Ordinance.

However, employee housing in the private sector requires specific tax incentives to contribute effectively and sustainably to the creation of affordable housing. The Federal Government's bill on the taxation of rental housing construction, which provides for a special depreciation of 5% annually of the acquisition or production costs (max. EUR 2,000 per m²) under further conditions (e.g. maximum acquisition or production costs of EUR 3,000 per m²) does not go far enough. Further investment incentives for the construction of company-owned dwellings would be expedient (e.g. exemption from / reduction of real estate transfer tax).

The concept of employee housing in the cooperative model, which was developed by DSC Legal together with the German Cooperative and Raiffeisen Confederation – reg. assoc. (DGRV - Deutscher Genossenschafts- und Raiffeisenverband e. V.), was recently described as a "very promising approach" by the State Secretary at the Federal Ministry of the Interior, Building and Community, Mr Gunther Adler who is responsible for the areas of urban development, housing and public building law, building, the construction industry and federal buildings. He also emphasized that it is precisely the teaming up of companies for the purpose of employee housing construction at the regional level that can lead to "significant synergy effects and thus lower costs".

The first information event on "employee housing in the cooperative model" took place – with great response - on 15 January 2019 at the headquarters of BVMW. Since then, more events have followed.

Smart and to the point.

DSC Legal focuses on rendering legal advice and providing notary services with respect to real estate, startup & venture capital, IP/IT, banking & finance, property construction, and renewable energy projects.