Erbbaupacht

Erbbaupacht, often translated as hereditary building right or leasehold tenure, is a legal concept predominantly found in German law. It allows a person, the Erbbauberechtigte, to build and use a property owned by another, the Erbbaugeber, for a specified period, typically 99 years. In return, the Erbbauberechtigte pays an annual fee, known as Erbbauzins.

The key characteristic of Erbbaupacht is the separation of ownership of the land from the ownership of the building constructed upon it. While the land remains with the Erbbaugeber, the building becomes the property of the Erbbauberechtigte. This arrangement is particularly useful for individuals or entities who wish to construct buildings without the significant capital outlay required to purchase land outright. It is commonly used for residential homes, commercial properties, and even for certain public utilities.

Upon the expiration of the lease period, the ownership of the building typically reverts to the landowner, the Erbbaugeber. However, the contract often includes provisions for compensation to the Erbbauberechtigte for the value of the building, or for an extension of the lease. The Erbbaupacht contract is a complex legal document that must be notarized and registered in the land register. It defines the rights and obligations of both parties, including aspects like building regulations, maintenance responsibilities, and the possibility of transferring the leasehold to others.