Erbbaurechtsvertrag

An Erbbaurechtsvertrag is a German legal agreement that creates an Erbbaurecht (heritable building right), a limited real right allowing a person or entity to erect or hold buildings on land owned by someone else. The contract is concluded between the landowner and the beneficiary (Erbbauberechtigter) and must be entered in the land register (Grundbuch) to be effective against third parties.

Typical features include a long, fixed term—commonly several decades, often 30 to 99 years—payment of a periodic ground rent (Erbbauzins), and detailed provisions on construction, maintenance, transfer and termination. The Erbbaurecht can normally be transferred, inherited and encumbered with mortgages, which makes it usable as collateral. Rights and duties of both parties are governed by the contract together with applicable provisions of German property and civil law.

Common uses are residential and commercial development, municipal projects and situations where separation of land ownership and building use is desirable (for example to lower upfront acquisition costs). Advantages include reduced purchase price for the builder and long-term site security; disadvantages can include ongoing ground rent obligations and eventual reversion issues at expiry. On termination or expiry statutory and contractual rules determine the fate of buildings and possible compensation. The institution broadly corresponds to long-term leasehold systems in other legal traditions.