VERDICT
In the legal dispute
xxx,
– Plaintiff –
Legal representative:
Attorney Sven Adam, Lange Geismarstraße 55, 37073 Göttingen
against
County xxx,
– Defendant –
The 33rd Chamber of the Social Court of Hildesheim, in the oral proceedings of September 30, 2013, with Judge xxx and Lay Judges xxx and xxx presiding, has ruled as follows:
1. The defendant is ordered, by amending the decision of 04.05.2010 as modified by the appeal decision of 05.07.2010, to grant the plaintiff a further 27.00 euros per month for the period from June to November 2010.
2. The defendant shall pay the plaintiff interest at a rate of 4 percent on an amount of 165.00 euros from 1 December 2010, on a further 33.00 euros from 1 January 2011 until 30 September 2013, and on an amount of 162.00 euros from 1 October 2013 until the end of the calendar month preceding payment.
3. The defendant shall reimburse the plaintiff for his necessary extrajudicial costs.
4. The appeal is admitted
FACTS OF THE CASE
The parties are in dispute over the granting of higher benefits to secure their livelihood under the Second Book of the Social Code (SGB II), taking into account higher accommodation costs.
The plaintiff is currently receiving benefits under the German Social Code, Book II (SGB II). Until November 30, 2009, he lived in an apartment in xxx together with Ms. xxx. Ms. xxx terminated the sublease agreement with the plaintiff on August 29, 2009, effective November 30, 2009. Subsequently, starting December 1, 2009, the plaintiff rented the apartment in xxx, which he occupied during the period in dispute, with a living area of 45 square meters, for a total price of €388.00 (€300.00 basic rent, €58.00 advance payment for utilities, and €30.00 advance payment for heating costs). He informed the defendant of this by email on November 5, 2009, and simultaneously applied for the continued provision of benefits under the German Social Code, Book II (SGB II). By decision dated December 3, 2009, the defendant granted the plaintiff benefits under the SGB II for the period from December 2009 to May 2010, taking into account €325.00 as reasonable housing costs and a deduction of €30.00 for heating costs.
On May 3, 2010, the plaintiff applied for continued benefits under the German Social Code, Book II (SGB II), for the period beginning June 1, 2010. The defendant subsequently granted benefits under the SGB II for the period from June to November 2010 by decision dated May 4, 2010, taking into account reasonable housing costs of €325.00 and a heating cost allowance of €30.00. The plaintiff filed an objection to this decision, arguing that the actual housing costs of €358.00 should be covered. Furthermore, he stated that his heating cost allowance had increased to €40.00, and therefore this amount should also be covered. As evidence, he submitted a letter from his landlord dated April 1, 2010, confirming that the heating cost allowance would be increased by €10.00 per month starting April 1, 2010. By partial remedy and appeal decision dated July 5, 2010, the defendant granted the plaintiff's appeal insofar as he approved a monthly increase of €10.00 for heating costs for the period in dispute. Otherwise, the defendant rejected the appeal, stating that extensive investigations had been conducted in the Göttingen area, which had shown that a gross rent of €325.00 is appropriate for a one-person household.
The plaintiff filed a lawsuit against this decision with the Hildesheim Social Court by letter dated July 22, 2010.
There is no valid evidence regarding the appropriateness of accommodation costs in the Göttingen area. An existing expert opinion from company xxx is outdated. Furthermore, the expert opinion prepared by company xxx does not meet the requirements for a conclusive concept established by the Federal Social Court (BSG). Therefore, the table in Section 12 of the Housing Benefit Act (WoGG) must be used. Based on the applicable rent level for Göttingen, this results in an appropriate gross rent (excluding utilities) of €358.00. Moreover, the plaintiff was never asked to reduce his accommodation costs.
In the oral proceedings, the defendant's representative acknowledged the plaintiff's claim insofar as a monthly amount €6.00 higher than the reasonable housing costs is payable, since the expert opinion from company xxx considers €331.00 to be reasonable housing costs for a one-person household in Göttingen. The plaintiff's representative accepted this partial acknowledgment.
The plaintiff requests
that the defendant, by amending the decision of May 4, 2010 as modified by the appeal decision of July 5, 2010, be ordered to grant the plaintiff additional accommodation costs in the amount of €27.00 per month for the period from June 1, 2010 to November 30, 2010, as well as interest pursuant to Section 44 of the German Social Code, Book I (SGB I), on a claim in the amount of €33.00 (the €6.00 per month acknowledged in the oral hearing of September 30, 2013, as well as the remaining disputed amount of €27.00 per month) until September 30, 2013, and interest pursuant to Section 44 of the German Social Code, Book I (SGB I), on an amount of €27.00 from October 1, 2013.
The defendant requests that
the action be dismissed and that leave to appeal be granted.
The expert opinion from company xxx represents a coherent concept within the meaning of the Federal Social Court's (BSG) jurisprudence. Furthermore, a request to the plaintiff to reduce costs was unnecessary, as he had moved into unreasonably expensive accommodation without any assurance of cost reduction.
For further details of the facts and the legal arguments, reference is made to the court file and the defendant's administrative file. These documents were available and formed the basis of the decision.
REASONS FOR THE DECISION
The admissible claim is well-founded.
The decision of May 4, 2010, as amended by the appeal decision of July 5, 2010, is unlawful and violates the plaintiff's rights pursuant to Section 54 Paragraph 2 of the Social Courts Act (SGG). The plaintiff is entitled to additional housing costs (KdU) in the amount of €27.00 per month for the period in question.
Housing costs are reimbursed in the amount of the actual expenses, provided they are reasonable (§ 22 para. 1 sentence 1 SGB II). If the housing costs exceed what is reasonable given the specific circumstances of the individual case, they are to be considered as part of the recipient's needs for as long as it is not possible or reasonable for the recipient to reduce the costs by moving, subletting, or otherwise, but generally for no longer than six months (§ 22 para. 1 sentence 2 SGB II). The assessment of reasonableness limits the amount of reimbursable costs (see Federal Social Court, judgment of September 22, 2009, case no. B 4 AS 18/09 R). "Reasonableness" is an indeterminate legal term that is subject to full judicial review (see Federal Social Court, judgment of November 7, 2006, case no. B 7b AS 10/06 R). According to established case law of the Federal Social Court (BSG), determining appropriateness of rent must be carried out in several stages. First, the abstractly appropriate size of the apartment and the relevant comparison area must be defined. In a further step, it must be determined how much one would have to spend on a basic-standard apartment on the housing market of the comparison area. The aim of this determination is to find the price per square meter for basic-standard apartments, which, according to the product theory, is to be multiplied by the appropriate square footage. The result is the regionally appropriate rent (see BSG, judgment of September 22, 2009, case no. 18/09 R).
The defendant, however, failed to provide the court with a comprehensible explanation of what constitutes a regionally appropriate, abstract rent. The court is convinced that the defendant's determination of the appropriate rent per square meter for the relevant apartment size category, in accordance with his opinion, is not based on a coherent concept. In this regard, the court refers to the decisions of the 23rd Chamber of the Hildesheim Social Court of June 16, 2010 (S 23 AS 1062/06) and December 9, 2011 (S 23 AS 1911/10). The 23rd Chamber stated:
"The expert opinion of [name omitted] therefore does not confirm that the costs considered by the defendant are reasonable costs within the meaning of Section 22 of the German Social Code, Book II (SGB II). This expert opinion is flawed in a fundamental way, and this flaws cannot be remedied even through a court-ordered revision.".
According to the Federal Social Court's (BSG) jurisprudence, the determination of the regional adequacy limit must be based on a verifiable and coherent concept that provides sufficient assurance that the current conditions of the local rental housing market are reflected (BSG, Judgment of June 18, 2008, B 14/7b AS 44/06 R). The limitation of actual accommodation costs to a "reasonable level" must be sufficiently comprehensible. The BSG defines a coherent concept as "a systematic approach by the basic income support provider in the sense of systematically determining and evaluating general, albeit location- and time-specific, facts for all cases within the relevant comparison area, and not merely an ad hoc approach on a case-by-case basis" (BSG, Judgment of September 22, 2009, Case No. B 4 AS 18/09 R, para. 19).
The Federal Social Court (BSG) has made the following specifications regarding the minimum requirements of a coherent concept (ibid.):
= Data collection must take place exclusively within the precisely defined area and must cover the entire comparison area (no ghettoization);
= a comprehensible definition of the object of observation is required, e.g., what type of apartments – differentiation according to apartment standard, gross and net rent
= Information about the observation period,
= Determination of the method of data collection (sources of information, e.g. rent index),
= Representativeness of the scope of the data collected,
= Validity of the data collection,
= Compliance with recognized mathematical-statistical principles of data evaluation
and
= Information about the conclusions drawn (e.g. upper limit of the range or capping limit).
The data collected by xxx-GmbH in 2008 do not meet the minimum requirements for a coherent concept specified by the BSG in essential points.
"The Chamber has concluded that the F+B report does not constitute a coherent concept because it lacks a comprehensible definition of the subject of observation, the method of data collection is objectionable, the scope of the collected data is not representative, and the capping threshold (33rd percentile) is incomprehensible.
The Chamber bases its decision primarily on the fact that..."
– not the entire housing market was included in the data collection,
– therefore the previous definition of the basic housing standard was wrongly omitted
,
– the rental housing stock from 1987 was used as a basis and then estimated for the year 2006, and
– the capping limit drawn at the 33% quantile is not comprehensible.
As already stated above, the BSG explains:
"A comprehensible definition of the object of observation is required, e.g., what type of apartments – differentiation according to the standard of the apartments, gross and net rent (comparability), differentiation according to apartment size."
According to the Federal Social Court's (BSG) guidelines, both apartments from the overall housing stock (i.e., those of basic, average, and high standards) and apartments of basic standards alone can be included in the monitoring. For example, apartments with a rent cap are also permissible. However, housing that cannot provide reliable information, such as dormitories, is not to be considered (Judgment of September 22, 2009, Case No. B 4 AS 18/09 R).
The court doubts that capturing the entire housing market renders differentiation based on, among other things, location and amenities unnecessary. Unlike the defendant, it does not derive this necessity from the Federal Social Court's (BSG) ruling of September 22, 2009. The lack of differentiation leads to subsequent problems in determining the rent cap (see below). However, this point is moot, as the court does not even accept the defendant's assumption that the xxx expert opinion captured the entire housing market. In the court's view, the entire housing market was not captured because data cleansing was carried out that is not entirely transparent.
In the survey of existing rents, apartments of up to 20 square meters were excluded because xxx GmbH assumed they were residential care home apartments. According to the court, this should have been verified, but this verification was not possible due to the anonymized nature of the tenant survey and was therefore omitted (see p. 8 of the expert opinion). The argument that these apartments are not necessarily residential care home apartments is provided by the expert opinion itself, which states on p. 8: "An address comparison with some information obtained during the survey of advertised rents partially confirmed this assumption." Crucial for justifying the exclusion of these apartments from the dataset without resulting in a shift in the burden on welfare recipients is the extent of "partially," which, however, remains undefined. In the court's view, it is equally plausible that these are, for example, apartments from housing programs for socially disadvantaged citizens. Removing these apartments from the data is detrimental to welfare recipients, as these apartments, while generally having low rents and therefore being attractive to single people with low incomes, have a comparatively high price per square meter, which ultimately needs to be determined. If, on the other hand, apartments with fixed maximum rents, i.e., publicly subsidized housing, remain in the dataset (see Figure 2.3, p. 9 of the expert report), the court believes this leads to a distortion to the detriment of welfare recipients. The defendant has not addressed these concerns in his written submission of February 12, 2010 (see p. 154 of the court file). It is unclear what "extensive research" xxx GmbH conducted before excluding this data from the analysis, and this also contradicts the statements in the expert report, which merely "assumes" that the apartments in question are dormitory-style apartments. The fact that this only represents about 1% of the gross sample does not lead to a different assessment, since this means that a group was not included, and it is unclear whether this group was wrongly completely disregarded.
The defendant's reference to the stricter procedures used in the creation of qualified rent indices in larger cities is unconvincing. According to Section 558 Paragraph 2 Sentence 1 of the German Civil Code (BGB), rent indices must differentiate between comparable housing types, sizes, features, condition, and location. xxx GmbH does not follow this procedure (p. 16 of the expert opinion). The court is of the opinion that defining the simplified standard only as a result (here, via the 33rd percentile of the price per square meter) necessarily presupposes that the data sets are not cleaned in the same way as when creating qualified rent indices. The more restrictive approach used for rent indices is justified solely by the need for careful differentiation. It should also be noted that xxx GmbH does not consistently adhere to even these requirements for creating rent indices. Unlike the approach taken in the xxx expert opinion, apartments with approved subsidies are not included in the creation of qualified rent indices. In the Chamber's view, incompatible paths are being taken to the detriment of the aid recipients.
The Federal Social Court's (BSG) ruling of September 22, 2009 (Case No. B 4 AS 18/09 R, para. 22) does not lead to a different conclusion. The court does not object to the fact that apartments with funding commitments remained in the dataset, which is permissible according to the BSG, but rather to the fact that, without further review, very small apartments were assumed to be located in dormitories and were subsequently removed from the dataset.
Furthermore, apartments in single-family and two-family houses were not taken into account from the outset, again with the – here non-relevant – reference to the procedure for creating qualified rent indices (see p. 4 of the report).
Another difference compared to the creation of rent indices lies in the lack of information regarding the date on which existing rents were agreed. The court considers this information indispensable, as the current limit of reasonable rent was determined based on these existing rents (see p. 29 of the expert opinion).
In the Chamber's view, it would also have been essential to ensure that the data sets included rental apartments from various locations. Only then could one speak of a comprehensive overview of the entire housing market. This is because apartments in so-called desirable neighborhoods can be significantly more expensive, despite a lower standard, than well-equipped apartments in less sought-after areas.
Since the entire housing market was not included, it is not sufficient to define the basic housing standard only in the result via the price per square meter, which was set at the so-called 33% quantile (see p. 19 of the report).
The lack of a definition of the "basic standard" leads, in the Chamber's opinion, to subsequent problems in determining average cold operating costs. The exclusion of cold operating costs exceeding €2.50/m² from the existing rent survey data (p. 10 of the expert opinion) only avoids data distortion to the detriment of benefit recipients if these cold operating costs do not pertain to apartments of a basic standard. xxx GmbH was unable to verify this because the apartments remaining in the data could not be assigned to any standard.
The court is also not convinced that the cold operating costs for the advertised rents were calculated correctly. The approach of disregarding the cold operating costs listed in the advertisements (see p. 15 of the expert opinion) and instead using the "average cold operating costs per square meter of living space obtained from the evaluation of the existing rent survey" (p. 30 of the expert opinion) actually prevents a review of the calculated existing rent. The available market is thus being assessed based on partial data from the existing market. The mere fact that the cold operating costs in the advertisements often could not be separated from the heating costs (see p. 15 of the expert opinion) does not justify this approach.
In any case, it is necessary to substantiate the claim that no distortion occurs, because the initial assumption is that asking rents reflect the more current market demand for operating costs (excluding utilities). Ultimately, asking rents are the conditions under which those in need of assistance enter the housing market. However, the mere assumption that the operating costs of existing rents are up-to-date ("it can be assumed"; cf. p. 30 of the expert opinion) is insufficient. The court does not rule out the possibility that the asking rent (excluding utilities) determined in this way is accurate, but this would be a random and not verifiable result.
The Chamber considers the "representativeness of the scope of the collected data" required by the Federal Social Court (BSG) to be a crucial pillar of a sound concept, which is also not guaranteed in the xxx expert opinion. The mere fact that the rental housing stock from the 1987 building and housing census, i.e., before the opening of the borders to the current new federal states, was used as the basis for the data collection, and that only an estimate of the current rental housing stock for the year 2006 was then made, does not lead the Chamber to conclude that the F+B expert opinion represents a sound concept. Whether a representative sample with a proportion of collected rental data amounting to 32.3% (see p. 4 of the expert opinion) is achieved cannot be verified in this way.
In the Chamber's view, the xxx expert opinion is also not a coherent concept because the cap set at the 33rd percentile is incomprehensible. The underlying assumption that this cap separates the bottom third from the remaining two-thirds of the housing market and accurately reflects apartments of basic standard requires that the entire housing market is actually captured, which – as explained above – the Chamber does not share. It further assumes an even mix of apartments of basic, average, and high standard in the data sets. No conclusions can be drawn about this because a definition of basic standard is specifically omitted. Depending on the respective – unidentifiable – proportions, the resulting price per square meter shifts. The use of the middle ground in the rent distribution used in the rent indices of the cities of Kiel (16.6th percentile) and Berlin (50th percentile) is not a valid justification, because rent indices specifically differentiate based on location, condition, amenities, etc. Furthermore, it remains unclear how conclusions can be drawn about basic housing in the city of Göttingen. The defendant's justification in his written submission of February 12, 2010 (p. 160 of the court file), according to which the 33rd percentile represents lower-income households (20%) and households receiving basic social security benefits (10%), plus a safety margin, is therefore unconvincing. In the court's view, it can only be assumed that this cap accurately reflects the housing of basic standards.
Contrary to the defendant's assertion, the court cannot see how the prior determination of the basic standard constitutes an impermissible restriction on welfare recipients in their search for housing. The aim of the calculation remains the regionally appropriate rent, expressed as a total amount that enables the welfare recipient to realize their preferences. According to the Federal Social Court's (BSG) jurisprudence, the decisive factor is not the appropriateness of the individual elements, but rather the total financial burden. This does not alter the fact that this total amount can only be determined by considering the costs of basic housing.
Contrary to the defendant's view, the court has no further duty to investigate.
The chamber sees no further investigative possibilities, particularly due to the passage of time.
Contrary to the defendant's opinion, the court is also not in a position to conduct further investigations based on the xxx expert opinion.
The Federal Social Court (BSG) states the following regarding the court's duty to investigate:
"This duty to investigate does not automatically transfer to the social court if the basic income support provider's concept proves to be unsustainable (inconclusive) or if, in the case of an otherwise conclusive concept, the necessary data have not been collected or have not been collected properly." (Judgment of September 22, 2009, B 4 AS 18/09 R, para. 26)
"If the municipal authority's concept for determining the appropriate price per square meter proves to be flawed, as in the present case, this can ultimately mean that the court of first instance may also accept the actual price per square meter as appropriate without further examination, as the Higher Social Court (LSG) did in the present case. However, in such a case, the costs of accommodation are not to be covered without limit, but only up to the amount of the table values according to Section 8 of the Housing Benefit Act (WoGG aF), moderately increased by a surcharge. The court can only draw this conclusion from the lack of a conclusive concept, however, if it has previously (unsuccessfully) attempted to rectify the administration's inadequate findings with its support (see judgment of the presiding panel of judges of July 2, 2009, B 14 AS 33/08 R). Accordingly, the LSG will first have to conduct further investigations to determine whether and to what extent the expenses incurred by the plaintiffs for accommodation during the period in question were appropriate." Following the logic of the distribution of responsibility for developing a coherent concept, the court will first address the defendant's investigations and, if necessary, correct any conceptual weaknesses. Furthermore, it will be able to access, for example, private rental databases—where available—that do not meet the requirements of Sections 558c and 558d of the German Civil Code (BGB), but are suitable for providing at least an approximate indication of reasonableness (see Federal Social Court [BSG], Judgment of June 18, 2008 – B 14/7b AS 44/06 R, FEVS 60, 145, 149, para. 16). If necessary, it may also engage its own expert. Only if these investigations prove fruitless can the defendant be ordered to bear the plaintiffs' actual expenses, as the Higher Social Court (LSG) correctly assumed in principle. (Judgment of 20 August 2009, B 14 AS 65/08 R, para. 21)
A revision, as formulated by the 14th Senate of the Federal Social Court (BSG), is not possible here. The Chamber considers the very foundations of the rent data collection, such as the incomprehensible data cleansing, to be flawed, as outlined in the expert opinion. A new survey based on a new concept would be necessary to eliminate the aforementioned weaknesses. At this point, the Chamber also reiterates that, due to the anonymized nature of the tenant survey, xxx GmbH was unable to conduct any follow-up surveys and/or control surveys – which it apparently deemed necessary (see p. 8 of the expert opinion, point 2.2)
The defendant's supplementary submissions do not alter this conclusion in the present case. The court clarifies, in contrast to the aforementioned decision, that it considers the prior definition of housing standard indispensable. Only then can the defendant determine the proportions of apartments of basic, average, and high standard that have been included. Only when a balanced mix can be demonstrated is the cap at the 33rd percentile justified. Given the approach taken by xxx GmbH, it cannot be ruled out that predominantly apartments of basic standard were included in the evaluation, thus creating a bias to the detriment of those receiving assistance. In any event, the result remains largely arbitrary
The 33rd Chamber, based on its own conviction and after its own examination, concurs with these statements made by the 23rd Chamber.
The plaintiff's housing costs are to be reimbursed in the amount specified in the judgment, in addition to the amount already granted and acknowledged in the oral proceedings. The court applies the case law of the Lower Saxony-Bremen State Social Court, according to which, in the absence of other means of determining the amount, the right-hand column of the table in Section 12 of the Housing Benefit Act (WoGG) plus a 10% safety margin must be used for the period in dispute. For a single-person household in the Göttingen area (rent level IV), the maximum reimbursable housing costs thus amount to €393.80. The plaintiff's actual rent of €358.00 is therefore to be reimbursed in full. It can remain open in the present case whether a 10% safety surcharge is also to be granted on the values of the table to Section 12 WoGG applicable from 01.1.2009, since the plaintiff's actual rental costs in the present case correspond exactly to the value of the table to Section 12 WoGG in the version applicable from 01.1.2009.
Given that, for the reasons stated above, the plaintiff's actual housing costs must already be granted, it is unnecessary to determine whether the plaintiff should have been requested to reduce these costs. The court merely notes, by way of supplementary ruling, that such a request to reduce costs would likely not have been necessary in this case. According to the established case law of the Federal Social Court (BSG), it is sufficient if the plaintiff is aware that his housing costs are excessive and what amount the defendant considers reasonable. By decision dated December 3, 2009, the defendant granted the plaintiff only reduced housing costs in the amount he deemed reasonable, namely €325.00, for the period from December 2009 to May 2010. At the latest from that point onward, the plaintiff was aware that the defendant considered his housing costs unreasonably high and what amount he deemed reasonable. At the time of the continued approval of benefits under the German Social Code, Book II (SGB II) from June 1, 2010, the 6-month protection period, during which the actual accommodation costs continue to be granted, had already expired.
The plaintiff was also entitled to the interest shown in the judgment.
Pursuant to Section 44 Paragraph 1 of the First Book of the German Social Code (SGB I), claims for monetary benefits accrue interest at a rate of four percent from the end of one calendar month after their due date until the end of the calendar month preceding payment. According to Paragraph 2.1, alternative of the provision, interest begins to accrue no earlier than six calendar months after receipt of the complete application for benefits by the responsible benefit provider. The increased benefits for the months of June to October are therefore subject to Paragraph 2 of the provision, according to which an entitlement to interest arises no earlier than December (after six months from receipt of the complete application for benefits dated May 3, 2009). The increased benefits for the month of November are subject to Paragraph 1 of the provision. The benefits would have been due in November. Therefore, interest begins to accrue one further month after the due date, and thus not until January 2011.
The decision on costs is based on § 193 SGG.
The appeal is admitted pursuant to Section 144 Paragraph 2 No. 1 of the Social Court Act (SGG) due to the fundamental importance of the legal matter.
The following is information on legal remedies.
