Old Debt Aid Act

Basic data
Title:	Law on old debt aid for municipal housing companies, housing associations and private landlords in the area named in Article 3 of the Unification Treaty
Short title:	Old Debt Aid Act
Abbreviation:	AltSchG (not official); in the literature often also AHG (not official)
Type:	Federal law
Scope:	Federal Republic of Germany
Legal matter:	Constitutional law , commercial law
References :	105-20
Issued on:	June 23, 1993 ; ( BGBl. I p. 944, 986 )
Entry into force on:	June 27, 1993
Last change by:	Art. 6 VO of June 19, 2020 ; ( Federal Law Gazette I p. 1328 )
Effective date of the ; last change:	June 27, 2020 ; (Art. 361 of June 19, 2020)
Weblink:	Text of the Old Debt Aid Act
	Please note the note on the applicable legal version.

The Old Debt Aid Act is a German federal law primarily to regulate the so-called old debts of municipal and cooperative housing companies. It also applies to private landlords.

Old debts, old liabilities

Old debts or old liabilities are or were financial burdens that were or were based on formerly state property in the new federal states. According to Art. 22 Para. 4 of the Unification Agreement, “when the accession becomes effective, the nationally owned property used for housing supply with simultaneous assumption of the proportionate debts is transferred to the ownership of the municipalities.” The original credit volume to be taken over as of July 1, 1990 was around 36 Billion DM (around 15,000 DM per apartment). This amount was initially deferred until December 31, 2003.

Legally, these old liabilities were later defined as:

... Obligations of the housing companies and private landlords referred to in Section 2 (1) from loans for apartments, the maximum permissible rent of which is based on Section 11 (2) and (3) of the Rent Amount Act in the version applicable until June 10, 1995 and for which the loans
1 . were granted until June 30, 1990 on the basis of legal provisions of the German Democratic Republic for residential purposes in the context of nationally owned and cooperative housing construction as well as for the creation and maintenance or improvement of private housing in the area specified in Article 3 of the Unification Treaty or
2. by Housing companies for the financing of rental housing construction projects started before October 3, 1990 after June 30, 1990 in the area specified in Article 3 of the Unification Treaty. (Section 3 (1) AltSchG)

Course of the law and its amendments

From January 1, 1994, this amount would have had to be paid interest and repaid, which would have hopelessly overwhelmed the municipalities in the accession area and the newly formed housing companies. The law, which came into force on June 27, 1993, initially introduced a full interest rate subsidy, which was valid until June 30, 1995. (Section 7 of the AltSchG, incidentally the only regulation that also affected private landlords).

In addition, a regulation was introduced so that partial relief can take place under certain framework conditions if the company or the cooperative submits an application to the Inherited Debt Repayment Fund by December 31, 2003 and thus undertakes to accept the associated obligations arising from the AltSchG fulfill. The assumption of these liabilities was regulated in such a way that all liabilities of more than 150.00 DM per square meter of living space , but not more than a total of 1,000.00 DM per square meter of living space, are taken over by the Inherited Debt Redemption Fund. This corresponds to a provisional relief of around DM 31 billion.

In return, the housing companies had to undertake to privatize 15 percent of their apartments and at least 15 percent of the total living space of the applying company (based on the status of January 1, 1993) or, in the case of the housing associations, to sell them in the period up to and including 31 December 1999. Homes returned to previous owners did not count towards these figures. (§ 5 Abs. 1 AltSchG)

From the proceeds from the sale, the excess proceeds of DM 150.00 (plus the disposal costs) had to be transferred proportionally to the Inheritance Repayment Fund, from 20 percent in 1993 to 50 percent in 1999 (Section 5 (2) AltSchG). Since it became apparent that this period was too short, an extension to the original regulation was introduced until December 31, 2003 in such a way that privatizations up to 2003 were also taken into account, the share to be transferred to the Inherited Debt Redemption Fund remained at 50 percent in 2000 and then rose to 55 percent by 2003. In addition, companies that were unable to achieve the privatization goals could also pay a so-called relief amount (redemption) in the amount of the regular amount to be paid to the Inherited Debt Redemption Fund by December 31, 2003. (§ 5 Abs. 2a and 3 AltSchG)

As part of the 2nd amendment of the Old Debt Aid Act of August 28, 2000 and the Old Debt Aid Ordinance issued on this legal basis, the possibility of granting additional relief from old liabilities was created if the applying housing company had a vacancy rate of at least 15 percent of the housing stock in its economic existence is at risk within the meaning of the Old Debt Aid Ordinance, but has a viable redevelopment concept that, taking into account urban planning aspects, is suitable to reverse the negative economic development of the company by reducing excess housing stock (demolition or dismantling). In this case, from then on this demolition / dismantling was also included in the privatization quota according to AltSchG of 15 percent.

effect

The law was controversial, as many municipalities and housing associations argued that the old debts were only book loans and only became real loans through the sale of the State Bank of the GDR . There were also fears that the priority privatization to tenants would not work. That turned out to be correct in the further course of the process. In the course of the law, many more regulations have been created to prevent the formation of so-called “new cooperatives” (also as spin-offs from existing cooperatives), intermediate buyer models (mainly to cushion the short time) or package sales to financial investors as “privatizations” or . To be considered "disposals" within the meaning of the law.

According to an analysis by the Kreditanstalt für Wiederaufbau in 2001, “the housing companies that were granted partial relief invested EUR 45 billion in their housing stock by the end of 1999. Of the total of 364,000 apartments to be privatized, 277,000 apartments were sold by the end of 2001, ie 77% of the existing privatization obligation was fulfilled by the end of 2001. In the meantime, around 95% of the companies that received old debt aid in the form of partial relief have finally been able to confirm that they have fulfilled their obligations under the AHG ”.

The effects of this law are still controversially discussed today (2015): The different effects in rural versus urban areas of this, e.g. Measures sometimes referred to as “forced privatization” are still evident, especially since the goal of the priority “tenant privatization”, which was aimed at in 1993, was clearly missed.

literature

Roger Peter Barthling-Schattevoy: The Old Debt Aid Act as an Instrument of Regional Economic Policy: A study of the effects of the Old Debt Aid Act on the economic development of municipal and cooperative housing companies and the resulting consequences for the regions in the five new federal states and Berlin ( Ost) , Verlag Peter Lang, Frankfurt, 1998. ISBN 978-3-631-33742-4

Freia Steinmetz: Housing privatization in the new federal states with special consideration of rural and urban areas: an analysis in the context of European privatization programs. , Verlag Cuvilliers, Göttingen, 2003. ISBN 3-89873-700-4

Individual evidence

↑ ^a ^b Institute for Housing and Environment (ed.): Planungslexikon: A guide through the labyrinth of planning language VS Verlag für Sozialwissenschaften, Wiesbaden, 1999, p. 24, ISBN 978-3-531-51462-8 preview at Google Books, Retrieved July 26, 2015.

↑ ^a ^b Genossenschaftsverband (Ed.): The Altschuldenhilfegesetz and the establishment of property-oriented cooperatives , online ( memento of the original from January 5, 2016 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. . Retrieved July 26, 2015. @1@ 2

↑ ^a ^b Kreditanstalt für Wiederaufbau (ed.): Altschuldenhilfe for East German housing companies , online . Retrieved July 26, 2015.

[pl-1] Institute for Housing and Environment (ed.): Planungslexikon: A guide through the labyrinth of planning language VS Verlag für Sozialwissenschaften, Wiesbaden, 1999, p. 24, ISBN 978-3-531-51462-8 preview at Google Books, Retrieved July 26, 2015.