Leasehold estate

The leasehold ( colloquially leasehold ) is the right of the leaseholder, usually - but not necessarily - to build upon payment of a regular fee ( the so-called ground rent ) on or below the surface of land, a building or entertain ( § 1 para 1 ErbbauRG ). From the perspective of the owner of the land ( the so-called ground lease encoder) the ground lease is a limited right in rem that weighs on his property. In Liechtenstein, Austria and Switzerland is the name of the ground lease appropriate means each construction law, construction law, see ( Austria ) and construction ( Switzerland ).

Content

The leasehold is justified by a leasehold contract between Erbbauberechtigtem and property owners and subsequent registration in the land register. The leasehold itself as a treated plot (so-called property-equivalent law).

The leasehold can be sold as a lot, are inherited and loaded, for example, by mortgages ( mortgage and mortgage). It will therefore be entered in a private land register folio, called Erbbaugrundbuch (see Section Basic Books ).

The legal basis for the ground lease is in Germany the law on the ground lease ( ground lease Act ) of 15 January 1919 in the current version. With effect from 30 November 2007, the ground lease Regulation ( ErbbauVO ) was renamed the building lease Act ( ErbbauRG ). Substantive changes were not associated with this name change.

The ground lease expires by the end of the agreed time. Constructed building must not be removed after the agreed time from the plot; the leaseholder receives rather basically a compensation for the value of the building ( § 27 ErbbauRG ). A built due to a hereditary building construction is an essential part of the heritable building and not the land ( § 12 Section 1 Sentence 1 ErbbauRG ). Owner of the structure is thus the leaseholder and not the property owner. Turns off the ground lease, as is the building to the essential element of the plot, that is, that now the land owner is the owner of the building. Since a building in accordance with § 94 BGB is an essential part of the property, the property extends to the plot as a rule on the structure. However, the ground lease leads to a disintegration of ownership of the land and the building thereon and thus an exception to this rule.

In contrast to the ground lease, the term ground lease refers strictly speaking to a perpetual right to use agricultural land. This historical method of cultivation is legally no longer allowed in Germany. Colloquially, the ground lease of building land is often referred to as ground lease instead.

Books

The leasehold is documented in two basic books: in the land of the contaminated land ( Lot Land Registry ) as a burden in Abt.II as well as the ex officio to be applied for the ground lease as land equal justice special Erbbaugrundbuch ( § § 14 ff ErbbauRG ).

In Land Land Registry the ground lease is entered in Division II. It can be ordered exclusively to the first rank place; the rank can not be changed. This is to ensure that the ground lease persists at a foreclosure sale of the property in any case. Nevertheless, a deviation from the requirement of the first rank place under state legislation (§ 10 paragraph II ErbbauRG ) is possible when senior rights not endanger the existence of the ground lease; Not this threat must be shown generally by Unschädlichkeitszeugnis.

The Erbbaugrundbuch is applied separately. It is built like a normal land register. In the inventory of Erbbauvertrag, the encumbered property and the property owners are named. In Division I the leaseholder is named. In Division II the ground rent and other rights and encumbrances except for liens to be entered. Division III remains the liens, which are on the ground lease reserved.

The introduction of the ground lease should promote housing through an analysis of socially weaker sections of the population should be given the opportunity to build, and at the same time create an instrument to combat land speculation.

In practice, the ground lease in Germany is mostly used by owners of larger areas to economically exploit the development potential of land and still receive their real property permanently. Ground leases, therefore, rarely awarded mainly by municipalities, churches and foundations of aristocratic landowners and businesses. Basically, however, each property owner is entitled to appoint a ground lease. The ground lease the land speculation can be excluded, as the leaseholder is contractually obligated for construction of the property. Occasionally, a right of first refusal pursuant to § 1094 et seq of the land is given to the leaseholder.

Cities and Towns ground leases awarded occasionally to charitable organizations ( sports clubs, etc.) in order to create the possibility of building a clubhouse without the club has to take the financial risk of real estate financing.

The leasehold offers the property owner the ability to impose the Erbbauberechtigen the extent to which the leaseholder can exercise his right. Approximately, a community sports club impose to use the clubhouse only as such. Otherwise, the sports club is in breach of contract and must, unless this has been agreed, the ground lease back to the community re-transferred (called reversion ).

Critical review

For the Owner a ground lease may be of interest if the payment of the ground rent for it is cheaper than financing a property purchase price. Thus, the ground lease may allow more income families the construction of their home today.

The profitability of a ground lease for the building owner to the market rate of 4 % of the land value is currently often questioned. Since mortgage rates are relatively low for several years, a builder is an amount that exceeds the initial ground rent only slightly, can finance the annual installments for a loan to purchase the property. In addition, the debt-financed purchase annuities during the stay the same, while the ground rent increase every three to five years in most cases. Furthermore, the client is debt free after paying off the credit for the purchase of a building site, whereas it for a ground lease usually permanently ( often 99 years agreed) shall reimburse the ground rent to the land owner.

One way to counteract this situation, the landowner regularly in that it provides for benefits upon ground lease orders. This can be done in such a way that the serving of calculating floor value is set lower than the actual market value. Alternatively, the interest rate can be lowered out of the land value. A concrete possibility of benefit, for example, differently configured reductions in the interest rate for minor children of the leaseholder (eg, the ground rent will be reduced at a reduction of 1 % of land value per child for a family of five to 25 %).

The leaseholder has today approximately every three to five years, depending on the contractual agreement in clause up to, expect an adjustment of the ground rent by the consumer price index. In most cases, this means an increase of the ground rent, as the general consumer prices fall only in exceptional cases.

Ground rent

The ground lease dealer receives that he presents his ground the leaseholder available, the ground rent; this is a fee in the form of a regular service (§ 9 para 1 ErbbauRG ). By registration as Erbbauzinsreallast in Erbbaugrundbuch the ground rent receives proprietary effects. As a rule, set at the beginning of the term ground rent as a percentage of the current land value.

Before 1 October 1994 ( entry into force of the Property Law Amendment Act ) of the rem ground rent for the entire term of the ground lease in advance had to be determined. An increase of the ground rent could only be achieved by fault legal value hedging agreements, the increase in claim could be backed up by flag in the land register. October 1, 1994, an adjustment clause may be made to the content of rem Erbbauzinsreallast. Ground leases without adjustment clause may be adjusted due to elimination of the basis of the case-law of the Bundesgerichtshof in a purchasing power loss of more than 60%. With respect to December 1999 was the cost of living index for a four -person household with middle-income workers, since the consumer price index is decisive. As a result of this change is taken into account in the calculation of the chaining month. If the price index for 2005, for example, 108.3 and for the year of the real estate lease agreement in 1965 for example, 33.7, a purchasing power loss of 221.37 % ( = ( 108.3 calculated - 33.7 ) / 33, 7) × 100%). Since the purchasing power loss is greater than 60%, an adaptation of the ground rent may be required. Here according to the case law of the BGH, an increase of 379.51 % would be required. The limitation of both the in rem as well as a possible contractual legal claim to payment of ground rent is governed by § 195 BGB and thus is three years.

Maturities

Ground leases typically run 75-99 years. Commercial ground leases typically have a term of 40 to 50 years. The leasehold can be sold and - be inherited - as the term says. Disposals and structural extensions require the consent of the property owner.

Assessment

Determination of market value

The fair value of the ground leases were calculated using the valuation standards 2006 basically out of the building property value or alternatively the building yield value and the land value portion of the leaseholder. Can be added nor a market adjustment factor as well as increases or reductions due to contractual particularities.

Mortgage lending value

Ground leases are land rights and as such can be mortgaged as well. The limits were up to the year 2005 in § 21 ErbbauVO aF regulated as follows: " ground leases may in accordance with § 11 and 12 of the Mortgage Bank Act of mortgage banks are encumbered when the § 20 Section 1 No. 3 and 4 ErbbauRG is agreed appropriate repayment. " Through the reorganization of the Pfandbrief law and the associated elimination of the mortgage Bank Act was amended, however, this passage ( " ground leases may in accordance with § 54 of the insurance Supervision Act are encumbered by insurance companies when the § 20 Section 1 No. 3 and 4 ErbbauRG is agreed appropriate repayment. "). According to § 20 Section 1 No. 3 and 4 ErbbauRG ground leases may therefore are then loaned if the repayment of the loan is at least 10 years before the end of the ground lease. Furthermore, it must be ensured that the scheduled repayment of the loan does not exceed the accounting depreciation of the structure according to economic criteria.

The evaluation takes place in modern times generally following the procedure described in the valuation guidelines. Here, the ground lease is initially valued by the cost approach or the income approach as full ownership, that is, the land and building are valued as if there were no ground lease.

From the thus determined value then the following amounts shall be deducted:

Obtained in this way the lending value of the erbbauzinsfreien ground leases, that is, the value at a (fictitious) ground rent of 0%. As a rule, however, a ground rent is agreed, this must also be adequately taken into account in the valuation. For this purpose, first the present value of the ground rent is calculated.

Depending on the contractual agreement Erbbauvertrag can now enter different cases:

For smaller objects, the land value is often completely deducted and did not make any reductions due to more of the ground rent for the sake of simplicity.

Tax valuation using FL

After Bewertungsgesetz the control values ​​of heritable building rights for the purposes of inheritance and gift tax and the land transfer tax be determined ( § § 192 et seq BewGVorlage: § § / Maintenance / juris - side).