Compulsory Purchase and Compensation for Infrastructure in Germany

Compulsory purchase in Germany: the constitutional framework

Property is protected by Article 14 of the Basic Law (Grundgesetz, GG). Its content and limits are defined by statute, and property entails obligations: its use should also serve the public good. Expropriation – compulsory purchase in English terminology, Enteignung in German – is the most severe interference. Under Article 14(3) GG, it is permissible only for the public good, and only by or pursuant to a law that determines the nature and extent of compensation. Compensation must be determined by striking a fair balance between the public interest and the interests of those affected, and disputes about the amount can be taken to the ordinary courts.

There is no single compulsory purchase code in Germany. The Federal Building Code (BauGB) contains a general regime for urban development purposes; sector laws provide expropriation powers for federal trunk roads, railways, waterways, airports, energy lines and pipelines; and the states' expropriation acts fill gaps and regulate procedure. In practice, most infrastructure expropriations are based on an approved plan (Planfeststellungsbeschluss), which determines the project and the land needed, and binds the expropriation authority.

This article explains the conditions for compulsory purchase, the procedure, early possession, the compensation rules and how landowners and project developers can protect their interests.

Legal bases for compulsory purchase

The main legal bases are:

For federal trunk roads, the authority responsible for road construction has the right of expropriation insofar as it is necessary to carry out an approved project; no further determination of admissibility is required, and the approved plan is binding on the expropriation authority (§ 19(1), (2) FStrG). Similar rules apply to railways under § 22 AEG and to energy lines under § 45(1) EnWG, which permits expropriation to the extent necessary to implement a project with an approved plan or for other energy supply purposes.

The binding effect of the plan has a major practical consequence: objections to the need for the project, the route and the land required must be raised in the planning approval procedure. In the later expropriation procedure, the landowner can generally only challenge issues specific to expropriation and compensation.

Conditions: public good, necessity and prior negotiation

Under the BauGB, expropriation is permissible in the individual case only if the public good requires it and the purpose cannot be achieved in another reasonable way (§ 87(1) BauGB). The applicant must have made a serious attempt to acquire the land by agreement on reasonable terms – where appropriate, offering suitable replacement land – and must credibly show that the land will be used for the intended purpose within a reasonable time (§ 87(2) BauGB). Sector laws contain comparable requirements, and the principle of proportionality applies throughout: a restriction such as an easement for a cable must be preferred to the full transfer of ownership where it suffices.

For energy lines, many cases are resolved by easements rather than full acquisition. Grid operators negotiate easement agreements with compensation payments; expropriation is used where agreement fails. The same applies to pipelines for gas, hydrogen and carbon dioxide.

Early possession: building before expropriation is completed

Infrastructure projects often cannot wait for the conclusion of expropriation procedures. Early possession (vorzeitige Besitzeinweisung) allows the project developer to take possession and start construction before the expropriation decision is final.

• Under § 116(1) BauGB, the expropriation authority can, on application, put the applicant into possession of the land if immediate implementation of the measure is urgently required for reasons of the public good, after an oral hearing.
• For energy lines, § 44b(1) EnWG provides that where the immediate start of construction is required and the owner or possessor refuses to transfer possession by agreement reserving all compensation claims, the expropriation authority must, on application and after the plan has been approved, put the project developer into possession.
• Federal trunk road and railway law contain similar provisions.

The owner receives compensation for the disadvantages caused by early possession, and the final compensation for the loss of rights is determined later. Early possession has become a standard tool in grid expansion, where developers increasingly apply for it as soon as the plan is approved.

Compensation: what landowners receive

Compensation is owed for the loss of rights and for other financial disadvantages caused by the expropriation (§ 93 BauGB). Financial advantages resulting from the expropriation are taken into account, and contributory fault reduces compensation.

Loss of rights: market value

Compensation for the loss of rights is based on the market value of the land or other object of expropriation at the time when the expropriation authority decides on the application (§ 95(1) BauGB). Certain value changes are disregarded, for example increases in value based on the prospect of a change in permitted use that is not expected in the foreseeable future, and value changes resulting from the planned project itself (§ 95(2) BauGB). The relevant condition of the land is generally determined at an earlier date, which prevents speculative improvements from increasing compensation.

Other disadvantages

Compensation for other financial disadvantages is granted only insofar as they are not already covered by the compensation for the loss of rights (§ 96(1) BauGB). It covers in particular temporary or permanent losses in the former owner's business or profession – limited to the expense required to use another property in the same way – reductions in the value of remaining land, and relocation costs. For farms and businesses, these consequential losses can exceed the value of the land itself, and they require careful documentation.

Compensation in land and special payments

Owners may in some cases be compensated with replacement land, particularly where they depend on land for their livelihood. In grid expansion, statutory and voluntary acceleration payments have been introduced for landowners who agree to easements early; their availability and amount should be checked in the current rules for the specific project type.

Easements, temporary use and restrictions short of expropriation

Not every interference with land for infrastructure amounts to a full compulsory purchase. Many projects need only a restricted right: an easement for an underground cable or pipeline, a right to cross land with an overhead line, or temporary use of land as a construction site. German law treats the creation of such rights against the owner's will as a partial expropriation, subject to the same conditions and to compensation, but the compensation reflects the lesser impact – typically a percentage of the land value for the easement strip plus compensation for crop losses, damage and temporary use.

Some restrictions are not expropriations at all but determinations of the content and limits of property under Article 14(1) GG – for example general planning restrictions, protection zones and building restrictions near roads. They are generally not compensated, unless they impose an unreasonable burden on a particular owner, in which case statutes often provide for equalisation payments. The distinction matters, because it determines whether compensation is owed and which procedure applies.

Preliminary investigations

Before a project is planned in detail, developers often need access to land for surveys, soil investigations and environmental mapping. Sector laws require owners to tolerate such preliminary work, typically after notice, with compensation for any damage caused. Owners should document the condition of their land before and after such work and report damage promptly, because claims are easier to prove while traces are fresh.

Compulsory purchase and the energy transition

The scale of grid and pipeline construction in the 2020s – transmission lines, distribution grid expansion, the hydrogen core network and potential carbon dioxide pipelines – means that compulsory purchase and early possession are used more frequently than in previous decades. Legislators have strengthened the tools: renewable energy and grid projects are in the overriding public interest, early possession for energy lines must be granted once the plan is approved and the conditions are met, and procedures have been digitised.

For farmers and rural landowners, this means that negotiations with grid operators have become a recurring issue. Standard easement agreements and compensation frameworks negotiated between grid operators and farmers' associations exist for many projects and provide a benchmark, but individual circumstances – drainage, farm operations, future building plans – can justify higher compensation or specific contractual protections. Landowners should not sign standard agreements without checking whether they reflect their situation, and developers should expect that well-advised owners will negotiate.

Court review and strategy

Decisions in expropriation procedures under the BauGB are challenged by an application for a judicial decision (§ 217 BauGB), which is heard by special chambers for building land matters at the regional courts – part of the ordinary court system, consistent with Article 14(3) GG. Under sector laws and state acts, the admissibility of expropriation may be reviewed by the administrative courts, while disputes about the amount of compensation go to the ordinary courts.

For landowners, the strategy is usually to secure the best possible compensation rather than prevent the project, unless the planning approval can still be challenged. Independent valuation, documentation of business losses and early negotiation are key. Interest on compensation for the period between loss of possession and payment, and reimbursement of the owner's costs for legal and valuation advice in the procedure, should also be claimed where the applicable rules provide for them. For project developers, transparent offers based on independent valuations, a documented negotiation history and flexibility on easements rather than acquisition reduce the risk of delays and legal challenges.

How TRW & Co helps with compulsory purchase

We advise landowners, businesses, farms, project developers, grid operators and public authorities on compulsory purchase and compensation. We represent affected owners in planning approval and expropriation procedures, negotiate easement and purchase agreements, assess and claim compensation including consequential business losses, and conduct proceedings before the chambers for building land matters and administrative courts. For developers, we structure land acquisition strategies, early possession applications and compensation offers. Our work connects with our infrastructure projects and planning and environmental practices and our article on grid connection. Please contact us. This article is general information and not legal advice.