Leasehold, Not Ownership (Erbbaurecht)
What does it mean?
The units here are a Wohnungs-/Teilerbbaurecht — a LEASEHOLD. You would own the building but NOT the land; the land belongs to a third party (often a church, city, or foundation) to whom an annual ground rent (Erbbauzins) is owed, and the right EXPIRES on a fixed date, after which the building can fall back to the landowner (Heimfall), typically with only partial compensation. Many banks lend less, or not at all, on Erbbaurecht — especially as the remaining term shortens.
Is this a problem when buying?
High risk. Have this point reviewed legally before you sign.
What you should do as a buyer
Treat this as a fundamentally different purchase. Have a lawyer review the Erbbaurechtsvertrag for the remaining term, the Erbbauzins (amount + indexation/Wertsicherung), Heimfall conditions and compensation, and any consent the Erbbauberechtigte needs for a sale. Confirm with your bank that they will finance an Erbbaurecht with this remaining term.
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