Contract Law2026-11-15

Your Building Permit Has Been Revoked — Who Is Liable for the Works, the Purchase Price and the Rent?

The authority revokes a building permit it has already granted, yet the shell stands, the purchase price is paid and the lease is running. Who answers for which part of the loss — and which deadline you must protect first.

You built, bought or took a lease in reliance on a permit the authority granted you in writing. Now the revocation is sitting in your letterbox and the invoices keep coming. The question is no longer whether you were in the right — it is who bears the loss, and in what order you have to pursue it.

In short

There are three separate strands of liability, and you have to pursue all three in parallel: the authority will usually owe you compensation for your reliance loss (§ 48 Abs. 3 VwVfG and the equivalent provisions of the state administrative procedure acts), your seller, landlord or designer is liable under contract law, and part of the loss stays with you if you yourself gave incorrect information. The first step is decisive: anyone who fails to challenge the revocation in time loses the official-liability claim entirely under § 839 Abs. 3 BGB. The one-month period runs from the date the revocation is notified to you.

How I can help

Reviewing the revocation for lawfulness, the one-year time limit and the exercise of discretion; lodging an objection or bringing an action to set it aside
An urgent application to the court where the authority has ordered immediate enforcement
Applying to the authority for financial compensation, including drawing up the schedule of loss
Claims against the seller, landlord, architect or building contractor — out of court and before the courts
Co-ordinating all of these proceedings with one another, so that you do not prejudice one claim by pursuing another

The authority: compensation for your reliance

Under § 48 VwVfG, only an unlawful administrative act can be revoked — so by revoking the permit, the authority is itself admitting that its earlier decision was wrong. Because building regulation is a matter of state law, it is the administrative procedure act of the relevant state that applies; in substance, however, those provisions are almost always modelled on the federal rules. If, by contrast, the permit was lawful and is merely withdrawn for the future, § 49 VwVfG applies, with its own rule on compensation in paragraph 6.

A building permit does not provide for any payment of money. It is therefore governed by § 48 Abs. 3 VwVfG: on your application, the authority must compensate you for the financial disadvantage you suffered because you relied on the permit continuing to exist. What is made good, in other words, is what you spent in reliance on it — planning costs, building work, finance costs, demolition — not the profit the finished project would have earned. The compensation is additionally capped at the value of your interest in the permit continuing to exist (§ 48 Abs. 3 Satz 3 VwVfG).

The claim falls away if your reliance is not worthy of protection. For this, § 48 Abs. 3 Satz 2 VwVfG refers across to paragraph 2, sentence 3: no protection of reliance where there has been fraudulent misrepresentation, duress or bribery, where the information you gave was incorrect or incomplete in a material respect, or where you knew of the unlawfulness or failed to recognise it through gross negligence. In practice, almost every one of these cases turns on the second limb — on separation distances, descriptions of use or floor areas in the building application that were not correct. Whether that is to be attributed to you or to your designer is a separate battle in its own right.

Many people overlook two procedural rules: the authority determines the compensation itself (§ 48 Abs. 3 Satz 4 VwVfG) — so you have to apply for it and quantify it. And the claim can only be asserted within one year, calculated from the authority’s notice drawing your attention to this time limit (§ 48 Abs. 3 Satz 5 VwVfG).

The deadlines that decide everything

A one-month period runs against the revocation from the date it is notified to you — an objection to the authority (§ 70 Abs. 1 VwGO) or, where the relevant state provides for no preliminary procedure, an action to set it aside directly (§ 74 Abs. 1 VwGO). An objection and an action to set aside in principle have suspensive effect (§ 80 Abs. 1 VwGO); the revocation then cannot be enforced for the time being. If the authority has ordered immediate enforcement (§ 80 Abs. 2 Satz 1 Nr. 4 VwGO), only an urgent application to the court will help.

This deadline is not merely the route to saving the permit. It is the precondition for money: under § 839 Abs. 3 BGB the duty to compensate falls away where the injured party has intentionally or negligently failed to avert the loss by making use of a legal remedy. Anyone who lets the revocation become final and only then asserts official liability under § 839 BGB in conjunction with Art. 34 GG is, as a rule, left empty-handed. On top of that, where there has merely been negligence, the public official is only liable if you cannot obtain compensation in some other way (§ 839 Abs. 1 Satz 2 BGB) — one more reason to secure the contractual claims at the same time.

The authority, too, is subject to a deadline: from the point at which it gains knowledge of the facts that justify revocation, it has only one year in which to revoke (§ 48 Abs. 4 Satz 1 VwVfG). That does not apply where the permit was obtained by fraudulent misrepresentation, duress or bribery (§ 48 Abs. 4 Satz 2 VwVfG). This deadline is breached more often than one might think — it is worth going through the authority’s file to see when the decisive note was written.

Purchase price and conversion costs: seller, designer, contractor

If you bought a property whose permit is later revoked, it lacks the agreed quality, or at least its suitability for the use assumed under the contract (§ 434 Abs. 2 BGB); where that does not apply, there remains its suitability for ordinary use under § 434 Abs. 3 BGB. From this follow the rights in § 437 BGB: subsequent performance, rescission or reduction of the price, damages, or reimbursement of wasted expenditure under § 284 BGB. Reimbursement of expenditure is often the most practical route in these cases, because it captures planning and conversion costs without your having to prove any lost profit. Where the project was incapable of being permitted from the outset, § 311a Abs. 2 BGB also comes into play; the seller then escapes liability only if he was unaware of the impediment and his ignorance was not his own fault either.

The standard objection is that liability for defects was excluded in the notarial contract. The seller cannot rely on that exclusion in so far as he fraudulently concealed the defect or gave a guarantee of quality (§ 444 BGB). Conversely, your rights are excluded if you knew of the defect when the contract was concluded (§ 442 Abs. 1 Satz 1 BGB). As to limitation: for defects in a building the statute provides for five years (§ 438 Abs. 1 Nr. 2 Buchst. a BGB), running from handover in the case of land (§ 438 Abs. 2 BGB); where there has been fraudulent concealment, the ordinary limitation period applies (§ 438 Abs. 3 BGB). Which period fits your contract depends on what was bought, and the notarial contract frequently departs from the statutory rule.

As against the architect or specialist designer, the issue is the agreed planning objective (§ 650p Abs. 1 BGB). Anyone who commissions permit-stage design as a rule agrees a design that is capable of being permitted and that rests on correct information. If the error in the building application came from his pen, that is his problem — and it is at the same time the very point on which the authority wants to strip you of your protection of reliance.

Rent: price reduction, damages, termination

As a tenant, the position is this: if the defect removes the premises’ suitability for use in accordance with the contract, you owe no rent for that period; if it is merely reduced, you owe an appropriately reduced rent (§ 536 Abs. 1 Sätze 1 und 2 BGB). Insignificant reductions are left out of account. The dispute almost always turns on timing: whether it is already the revocation of the permit that legally bars use, or only a formal prohibition on use. Both positions are tenable, and the answer depends on how concretely enforcement action by the authority is threatened — this is a point you have to prove, not merely assert.

The strongest lever is § 536a Abs. 1 BGB: if the defect was already present when the contract was concluded, the landlord is liable in damages without fault. In many cases that captures the costs of relocation, conversion and business interruption. Where you are deprived of the use in accordance with the contract, in whole or in part, you can also terminate without notice (§ 543 Abs. 2 Satz 1 Nr. 1 BGB) — though, in the case of breaches of duty, in principle only after a period for remedy or a warning (§ 543 Abs. 3 BGB). For commercial premises, bear in mind that the protective provision of § 536 Abs. 4 BGB applies only to residential accommodation; there, the lease can therefore restrict the right to reduce the rent.

A typical case

An investor buys a commercial hall, has it converted into flats, and holds the change-of-use permit in her hand. On the neighbouring plot there is an industrial site from which serious accidents may emanate. The appropriate separation from installations of that kind is a consideration that also bears on whether the individual project may be permitted — the principle of separation in § 50 BImSchG is, true enough, addressed to planning, but it shapes the assessment of the surroundings as a whole. Two years after building work begins, the authority revokes the permit.

What has to be done now: within one month, lodge an objection, so that the revocation does not become final and § 839 Abs. 3 BGB does not bite. In parallel, inspect the file — when did the authority learn of the industrial site, had the one-year period of § 48 Abs. 4 VwVfG already started to run? In parallel, apply for financial compensation with a quantified reliance loss. In parallel, examine whether the seller knew of the neighbouring site and what the purchase contract promised as to use. And in parallel, put the question to the designer of what he stated in the building application about the surroundings. If any one of these strands falls away, the loss ends up resting with the investor.

Common mistakes

Negotiating first, suing later: the one-month period runs while the authority makes friendly telephone calls. After that the revocation is final and the official-liability claim is usually lost.
Forgetting the application under § 48 Abs. 3 VwVfG. The authority does not pay of its own accord, and the one-year period from its notice is running.
Carrying on building because the objection and the action have suspensive effect. In legal terms you are not in the wrong, but in economic terms you increase your own loss with every stage of the works.
Fixing your sights on a single opponent. The authority, the seller, the landlord and the designer are each liable under different provisions with different deadlines; anyone who goes after only one loses the others.
Writing the seller off because of the exclusion of liability in the notarial contract, without examining what he knew.
As a tenant, simply withholding the rent without notifying the defect in writing and documenting the timing.

Frequently asked questions

May I carry on building after the revocation has been served on me?

If you lodge an objection or bring an action to set the revocation aside, these in principle have suspensive effect (§ 80 Abs. 1 VwGO) — the revocation then cannot be enforced for the time being. It is different if the authority has ordered immediate enforcement, and without an urgent application you risk a stop-work order. In economic terms I almost always advise clarifying the legal position first, because every further stage of the works increases your loss, which someone will have to bear in the end.

Will the authority make good the lost profit of the project?

As a rule, no. § 48 Abs. 3 VwVfG makes good the financial disadvantage you suffered through relying on the permit continuing to exist — that is, your expenditure, not the return on the finished project. On top of that, the compensation is capped at the value of your interest in the permit continuing to exist. Any claim going beyond that is possible, if at all, only through official liability, and for that you need fault.

The authority says my reliance is not worthy of protection. Is that always right?

No. The authority has to establish one of the grounds in § 48 Abs. 2 Satz 3 VwVfG — fraudulent misrepresentation, information that was incorrect or incomplete in a material respect, or knowledge of the unlawfulness or ignorance of it through gross negligence. Not every inaccuracy in the building application is material, and not every error by the designer is to be attributed to you. That question of attribution is often the very heart of the case.

How long may the authority wait before revoking?

From the point at which it gains knowledge of the facts that justify revocation, it has one year (§ 48 Abs. 4 Satz 1 VwVfG). Cases of fraudulent misrepresentation, duress or bribery are excepted. When that knowledge arose often emerges from the authority’s file — a neighbour’s complaint or an internal note may have set the clock running.

As a tenant, do I have to keep paying while the authority does nothing?

This is the most common point of dispute. So long as you are actually using the premises undisturbed, the landlord will argue that their suitability is not reduced; from the point where enforcement action by the authority is concretely threatened, there is much to be said for a reduction under § 536 Abs. 1 BGB. In any event, notify the defect in writing and, if necessary, pay under reservation rather than cutting the rent unilaterally.

Your next step

If the revocation is sitting with you, the one-month period is what counts — everything else can still be put in order afterwards, but not this deadline. Send me the decision with the date you received it, the permit, the building application and, if you have them, the purchase, lease or architect’s contract. In an initial consultation I will tell you whether the revocation can be challenged, which part of your loss runs through the authority and which through your contractual partners, and I will secure the deadlines in both directions. You will find further articles on contracts relating to building and acquisition under Contract law.

I discuss the costs in advance: billing under the RVG or by fee agreement, and where you have legal expenses insurance I handle the request for cover. I work nationwide, by video or telephone — the decision can reach me digitally too.

This article provides general information and is no substitute for an examination of your individual case.

This article provides general information and is no substitute for legal advice in an individual case. Last updated: 2026-11-15.

Christian Czirnich, Rechtsanwalt (attorney at law), Kirchseeon near Munich

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