Eigentum: The Concept of Property in German Law

The concept of property (Eigentum) in German law operates on two distinct but interrelated levels. Private law property is governed by the Bürgerliches Gesetzbuch (BGB), which defines ownership as the legal power to dispose of a thing as one pleases and to exclude others from interference. Constitutional property is guaranteed by Article 14 of the Grundgesetz, which protects property as a legal institution and as an individual right. The constitutional guarantee goes beyond the BGB’s conception, extending to all patrimonial rights that the legal order recognises as belonging to the individual. The interaction between the BGB and the Grundgesetz creates a layered system in which private law defines the content of property rights while constitutional law limits the state’s power to interfere with them.

Property Under the BGB

The BGB’s law of property (Sachenrecht) is governed by the principle of numerus clausus: only a limited number of proprietary rights are recognised, and their content is fixed by law. Section 903 BGB defines ownership (Eigentum) as the right to deal with a thing at one’s discretion and to exclude others from any interference, subject to legal limitations and the rights of third parties. The BGB distinguishes between ownership of movable property and ownership of land, with different rules for acquisition and transfer. Movable property is acquired through delivery and agreement under sections 929–932 BGB, while land is acquired through registration in the Land Register (Grundbuch) under sections 873–874 BGB. The system is characterised by the abstract principle (Abstraktionsprinzip), which separates the validity of the property transfer from the validity of the underlying contract. The BGB also recognises limited proprietary rights, including possession (Besitz), usufruct (Nießbrauch), mortgage (Hypothek), and land charge (Grundschuld).

Constitutional Protection of Property

Article 14(1) GG guarantees property as a fundamental right and as a legal institution (Institutsgarantie). The institutional guarantee requires the legislature to maintain a system of private property as a basic element of the legal order. The individual right protects the holder against unlawful interference by the state. The Federal Constitutional Court has defined the scope of constitutional property broadly, encompassing not only ownership of physical things but also intellectual property, contractual rights, claims, and established business operations (eingerichteter und ausgeübter Gewerbebetrieb). The Court has held that the guarantee protects the existing legal position rather than expectations or future opportunities. The social function of property is expressed in Article 14(2) GG: property imposes duties (Eigentum verpflichtet), and its use shall serve the public good. This provision establishes the constitutional basis for limitations on property rights.

Sozialbindung: The Social Obligation of Property

The social obligation (Sozialbindung) of property under Article 14(2) GG permits the legislature to define the content and limits of property rights in the public interest. Unlike expropriation under Article 14(3) GG, Sozialbindung does not require compensation and is not limited to exceptional circumstances. The Federal Constitutional Court distinguishes between permissible determinations of content and limits (Inhalts- und Schrankenbestimmungen) under Article 14(1)(2) GG, which define the scope of property rights in general terms, and expropriation (Enteignung) under Article 14(3) GG, which removes specific property rights for a particular public purpose. The distinction is crucial because only expropriation requires compensation and is subject to strict procedural requirements. The Court applies a proportionality analysis to determine whether a restriction on property constitutes a permissible social obligation or an expropriation requiring compensation. Factors include the severity of the interference, the legitimate purpose, and the existence of alternative means of achieving the public interest.

The Naßauskiesung Decision

The landmark Naßauskiesung decision of the Federal Constitutional Court (BVerfGE 58, 300, 1981) fundamentally restructured the relationship between property and regulatory power. The case concerned a mining permit that prevented a landowner from exploiting gravel deposits on his property. The Court held that the determination of the content of property rights is primarily a matter for the legislature, not the courts or the administration. Where the legislature defines the permissible uses of property in a general and abstract manner, this constitutes a determination of content and limits rather than an expropriation. Expropriation occurs only when the state specifically targets a concrete property right for removal or restriction for a particular public project. The decision established that the constitutional guarantee of property does not protect a particular economic use or value; the legislature may restrict the use of property as part of its regulatory power as long as it respects the proportionality principle and the essence of property ownership.

Expropriation and Compensation

Article 14(3) GG permits expropriation only for the public good (Wohl der Allgemeinheit) and only by or pursuant to a law that determines the nature and extent of compensation. Expropriation must be proportionate and may be ordered only where the public interest in the specific project clearly outweighs the private interest in the property. The compensation must reflect a fair balance between the public interest and the private interest, generally determined by the market value of the property. The principle of Junkimklausel requires that the law providing for expropriation also regulate the amount and payment of compensation; a law authorising expropriation without such provision is unconstitutional. The Federal Constitutional Court has held that the requirement of compensation is not merely procedural but substantive: inadequate compensation may render an expropriation unconstitutional even if the formal requirements are satisfied. The owner is entitled to full compensation for the loss suffered, including consequential losses where these are directly attributable to the expropriation.

The Protective Function of Property

Article 14(1) GG imposes a duty on the state to protect property against interference by private parties. This protective duty (Schutzpflicht) requires the legislature to enact laws that safeguard property rights in private law relationships, and the courts to interpret and apply these laws in conformity with the constitutional guarantee. The Federal Constitutional Court has held that the state must provide effective legal protection against encroachments on property, including adequate remedies for infringement. The protective function is particularly important in the context of landlord-tenant relationships, where the state must balance the landlord’s property right against the tenant’s interest in housing. The Court has also recognised a duty to protect intellectual property against unauthorised use, requiring the legislature to provide effective enforcement mechanisms. The protective dimension of Article 14 GG ensures that property is not merely a negative right against the state but a positive right to a legal order that respects and protects property in all its dimensions.