In view of the housing shortage in Germany, the federal government has presented a draft law for simpler and cheaper construction. By changing the construction contract law, construction should be possible faster without certain comfort standards, as can be seen from a draft by the Ministry of Justice (BMJV) for the so-called building type E. According to experiences from pilot projects, construction costs can be reduced by ten to 15 percent.
The new regulation provides for a voluntary option. The simplified rules only apply if the parties to a construction project expressly agree on the new “building type E basic standard”. Otherwise, the previous, higher standards will remain. The law does not change any of the mandatory government requirements regarding fire protection, statics or lighting. »Construction in Germany must become easier and cheaper. Because we need more affordable housing," explained Federal Justice Minister Stefanie Hubig (SPD). “With the Building Type E Act, we are paving the way for this.” Construction Minister Verena Hubertz (SPD) said: “Every euro that we do not put into unnecessary standards is a euro for more affordable housing. This makes building cheaper and remains legally secure.«
Complicated clarification questions
The draft was preceded by months of discussions within the government. The Ministry of Justice and the Ministry of Construction originally presented a joint key points paper in November 2025. The CDU is still skeptical about the SPD plans. The so-called building type E can only become a game changer if it is accepted in practice, said the construction policy spokesman for the CDU/CSU parliamentary group, Jan-Marco Luczak, on Monday. »I am not yet convinced that this will work with the new type of contract proposed by the Minister of Justice. This must be expressly agreed upon.
But if I agree on a contract that deviates downwards from the usual standards, there is a risk of complicated clarification questions, documentation obligations about saved costs and ultimately liability risks. Building type E could fail in practice because of these hurdles, as experience with the current legal situation has shown.
Luczak added that the parliamentary legislative process must carefully examine whether a basic legal standard would be a better solution than individual contracts. A work would be considered defect-free if the basic standard was met. »Nothing has to be expressly agreed upon, there are no questions of clarification or liability risks. In my opinion, that would be expedient and practical.«
The construction and real estate industry associations as well as several federal states have recently repeatedly urged the government to speed up the project. So far, building according to a more favorable standard has often failed due to legal uncertainties, as construction companies fear legal disputes if they deviate from established standards. The draft law will now be sent to the states and associations, which have until November 13, 2026 to comment.
