Hereditary Building Right (Erbbaurecht)
Hereditary building right (Erbbaurecht/Erbpacht) explained: How does it work, what are its advantages and disadvantages, and what happens when it expires?
Legal
ErbbauRG
Also known as: leasehold, ground lease, heritable building right
The Erbbaurecht (hereditary building right) grants the leaseholder the right to construct and use a building on someone else's land. In return, they pay a regular ground rent (Erbbauzins), typically between 3% and 5% of the land value per year. Hereditary building rights usually have a term of 60 to 99 years.