Leasehold

Description

According to Section 1 ErbbauV, the heritable building right includes the right to erect your own building on someone else's land. This breaks with the principle that ownership of a building and a plot of land always belong together. The provisions of the Erbbaurechtsverordnung (ErbbauV) thus form an exception to Sections 93 and 94 BGB and Section 946 BGB, in which ownership of the land also includes ownership of the building.
Example:

A receives a heritable building right for 99 years on the property of B. He can build the long-desired detached house on it and saves the high land price. In return, he regularly pays B the ground rent and the public charges and levies. At the end of the contract term, i.e. after 99 years, B or his heirs receive the land with the building back. However, B or his heirs must compensate A or his heirs for maintaining the building.

The main content of the leasehold is the development of the property. The type of development does not have to be determined in detail when the heritable building right is granted. It is sufficient if the leaseholder may erect any building permitted under building law (BGH, 22.04.1994 - V ZR 183/93).

The heritable building right always covers the entire building. Limiting the heritable building right to parts of the building is not permitted under Section 1 (3) ErbbauV. In contrast, however, the heritable building right can only relate to part of the property. The creation of a partial heritable building right then requires entry in the land register, see BayObLG decision of 10.03.2004, 2Z BR 268/03.

It is also possible to create an overall heritable building right, i.e. a heritable building right to several properties.

A heritable building right can also be granted as a residential heritable building right in accordance with Section 30 WEG, in which case it is possible to build condominiums on the property. The heritable building right then corresponds to condominium ownership. The heritable building right is granted for 99 years.

The same rules apply to those entitled to build on an apartment as to other apartment owners. Without the consent of the other co-owners, impairing structural alterations are not permitted, see also OLG Düsseldorf - 30.07.2005, ZfIR 2004, 816

As a rule, an annual ground rent of approx. 5% of the property value is payable for the leasehold.

The longest contract term is 99 years. However, an option for extension can be agreed.