Federal Constitutional Court - Press office -
Press release no. 59/2010 of 5 August 2010
Order of 21 July 2010 – 1 BvR 8/07 –
Transfer of property rights of untraceable co-heirs to the
compensation fund held constitutional
Numerous assets in the GDR - in particular pieces of real property -
that had not been expropriated were under compulsory state
administration. This meant that although those affected retained formal
ownership of their assets, their rights to use and dispose of such
assets were restricted and the economic effect was largely comparable to
expropriation. The Property Act (Vermögensgesetz - VermG) was amended on
14 July 1992 by the insertion of a new § 11a, which provided for the
revocation of all state administration of affected assets by direct
operation of law with effect from 31 December 1992. However, thereafter
much of the real property that had been previously been administered by
the state was “effectively ownerless” because the respective owners or
their whereabouts were still not known. The Compensation Act
(Entschädigungsgesetz) that entered into force on 1 December 1994
provided that assets that were effectively ownerless should be
transferred to the compensation fund administered by the Federal Office
of Central Services and Unresolved Property Issues (Bundesamt für
zentrale Dienste und offene Vermögensfragen) if the owners could not be
ascertained or did not come forward even after a public notice procedure
was carried out. Among other things, compensation under the Compensation
Act and the Federal Act for the Compensation of the Victims of National
Socialist Persecution (NS-Verfolgtenentschädigungsgesetz) as well as
equalisation payments for irreversible expropriations are paid from the
compensation fund. Finally, the Amending Act (Änderungsgesetz) of 10
December 2003 amended § 10.1 sentence 1 no. 7 sentence 2 EntschG so as
to provide that even those assets to which unknown or untraceable
co-heirs were entitled would be subject to transfer to the compensation
fund. As a result, the compensation fund becomes a member of the
community of owners or community of heirs in relation to assets formerly
administered by the state. Current law makes no provision for the
restitution of a co-owner’s or co-heir’s share which has been
transferred to the compensation fund in the event that the excluded
legal owner or his or her legal successors later come forward.
The plaintiff in the original proceedings whose case was brought by a
curator absentis is entitled as co-heir to a one-third share of the
property that was owned by her father in Brandenburg. Both of her
sisters registered their inheritance claims within the required period.
After failing in spite of intensive research to establish the
whereabouts of the plaintiff, who had already moved to Great Britain in
1965, the Federal Office of Central Services and Unresolved Property
Issues excluded the plaintiff from her co-heir’s share in the property
and declared that her share would pass to the compensation fund owned by
the Federal Republic of Germany. The action brought by the curator
absentis against this decision led the Federal Administrative Court
(Bundesverwaltungsgericht) to refer § 10.1 sentence 1 no. 7 sentence 2
EntschG to the Federal Constitutional Court for a decision on its
constitutionality. According to the Federal Administrative Court, the
provision was incompatible with Article 14.1 of the Basic Law
(Grundgesetz - GG) insofar as it related to the rights of untraceable
co-heirs.
The First Senate of the Federal Constitutional Court has decided that §
10.1 sentence 1 no. 7 sentence 2 EntschG is compatible with the Basic
Law to the extent that it also allows an untraceable co-heir to be
deprived of his or her rights in respect of assets formerly under state
administration where at least one other co-heir is known and can be
traced.
In essence, the decision is based on the following considerations:
The status of co-heir acquired under former GDR law enjoys the
protection of the fundamental right to property (Article 14 GG).
Nonetheless, the encroachment on this legal interest which results from
the deprivation of an untraceable co-heir of his or her legal status
provided for in § 10.1 sentence 1 no. 7 sentence 2 EntschG meets the
requirements that must be placed on a fair reconciliation of interests
when determining the content and limits of property. The provision
serves the legitimate goal of promoting the public interest since it
eliminates the problem of the assets previously administered by the
state in the accession territory being effectively ownerless and
establishes ownership rights in respect of them; it thereby improves the
marketability of the properties. It thus contributes to an orderly legal
and economic development in the new Länder (states). When exercising its
discretion in connection with the promotion of economic development in
the new Länder, the legislature was entitled to assume that the
inability to trace a co-heir would limit the community of heirs’
capacity to act. Without the untraceable co-heir the only options
available to the community of heirs are to take measures whose purpose
is the proper administration of the deceased’s estate or to take action
under the power granted to heirs to protect a deceased’s estate against
imminent harm. Even if one were to appoint a representative or curator
to take only certain measures, this would not allow such obstacles to be
removed with the same swiftness as the transfer of an inheritance share
to the compensation fund, which will normally dispose of the assets.
Nor does § 10.1 sentence 1 no. 7 sentence 2 EntschG impose a
disproportionate and unreasonable burden on the untraceable co-heir who
is excluded from the inheritance. In this context, it must be taken into
account in particular that only those assets are affected where a long
period of time has elapsed in which the rightful owner (who has remained
untraceable in spite of the exhaustion of all possible means of
ascertaining his or her whereabouts) has not claimed them although the
opportunity to do so existed. In this case, the untraceable co-heir had
13 years to claim her inheritance. In addition to this, a public notice
procedure may not be commenced until after the Federal Office has
satisfied its duty to find the rightful owner with the means available
to it. Against this background and in view of the special situation
existing after the restoration of German unity, the public interest in
the revival of the real estate market and economic development prevails.
The fact that an untraceable co-heir is deprived of his or her legal
status without compensation is also unobjectionable. The reason for this
is that the money transferred to the compensation fund does not serve
general fiscal purposes, but benefits other persons who are in the same
position as the original legal owner because they also suffered the loss
of assets for which they are entitled to be compensated.
The restriction of the property right is also drafted in such a way as
to afford equality before the law (Article 3.1 GG). It is true that
communities of heirs with untraceable co-heirs can also arise in cases
where under the Property Act compensation is made through retransfer
(restitution) of withdrawn assets and where the untraceable co-heir’s
inheritance shares are not, however, subject to a public notice
procedure. This unequal treatment is, however, permitted under
constitutional law in view of the legislature’s broad operating
latitude. It is factually justified and thus not arbitrary. The
legislature was entitled to take into account that, compared with other
assets covered by compensation under the Property Act, the fact that
those assets were effectively ownerless after the removal of state
administration by the Act of 31 December 1992 had acquired a completely
different significance.
Neither the constitutional position of the other available co-heirs
arising from Article 14.1 GG, nor that of the testator is violated. To
the extent that the other co-heirs have the compensation fund forced on
them as a co-heir, this does not in and of itself amount to an
encroachment on a legal position that has the value of an asset, in
particular since the community of heirs is anyway only a temporary
arrangement. The fundamental-rights position of the testator is not
affected since the encroachment at issue does not affect his or her
testamentary freedom or his or her right to leave his or her assets in
accordance with the statutory provisions governing inheritance by
relatives, but instead only the legal position of such person who has on
this basis become a co-heir.
This press release is also available in the original german version.
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