The Ground Lease Agreement (Erbbaurecht) is a fundamental instrument in German real estate law that enables property development while maintaining separate ownership of land and buildings. This document is particularly useful when outright land purchase is not feasible or desired, such as in cases involving public entities, religious institutions, or long-term estate planning. It creates a registrable right under German law that allows the ground lease holder to construct and operate buildings on the landowner's property for an extended period, typically 99 years. The agreement must comply with the ErbbauRG and requires notarization and land register registration. It's commonly used for commercial, residential, and public infrastructure developments, providing a balanced solution that benefits both landowners seeking steady long-term income and developers looking to minimize initial capital investment while securing long-term development rights.
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1. Parties: Identification of the landowner (grundstückseigentümer) and the ground lease holder (erbbauberechtigter) with full legal details
2. Background: Context of the agreement including property history and parties' intentions
3. Definitions: Key terms used throughout the agreement
4. Property Description: Detailed description of the land plot including cadastral details and land register information
5. Grant of Ground Lease: Formal establishment of the hereditary building right (Erbbaurecht)
6. Duration: Term of the ground lease (typically 99 years under German practice)
7. Ground Rent: Amount, payment terms, and adjustment mechanisms for the ground rent (Erbbauzins)
8. Permitted Use: Specified uses of the property and any restrictions
9. Construction Requirements: Building obligations, maintenance requirements, and construction standards
10. Insurance: Required insurance coverage for buildings and liability
11. Assignment and Transfer: Conditions for transferring or encumbering the ground lease right
12. Termination: Grounds for early termination and consequences
13. Compensation: Terms for compensation for buildings upon expiration of the ground lease
14. Registration: Provisions regarding land register registration requirements
15. Costs and Taxes: Allocation of costs, including registration fees and property taxes
16. Notices: Communication requirements and contact details
17. Governing Law: Confirmation of German law application and jurisdiction
1. Existing Buildings: Required when the property includes pre-existing structures, detailing their condition and handling
2. Environmental Provisions: Needed when there are specific environmental concerns or requirements for the property
3. Development Obligations: Used when specific development timelines or requirements need to be imposed
4. Pre-emption Rights: Optional provisions for rights of first refusal for either party
5. Mortgage Provisions: Detailed provisions regarding the creation and handling of mortgages on the ground lease right
6. Special Use Provisions: Required for properties with specific use requirements (e.g., commercial, industrial)
7. Indexation Clauses: Detailed provisions for ground rent adjustments based on specific indices
8. Subdivision Rights: Needed when the right to subdivide the property or ground lease is contemplated
1. Land Plan: Cadastral plan showing the exact boundaries of the leased property
2. Building Plans: Architectural drawings and specifications for permitted buildings
3. Rent Calculation: Detailed methodology for calculating and adjusting the ground rent
4. Existing Encumbrances: List of existing easements or other encumbrances affecting the property
5. Construction Timeline: Detailed schedule for any required construction or development
6. Form of Bank Guarantee: Template for any required bank guarantees or security
7. Insurance Requirements: Detailed specifications for required insurance coverage
8. Land Register Extracts: Current land register entries (Grundbuchauszug) for the property
Relevant legal definitions
Clauses
Relevant Industries
Commercial Real Estate
Residential Development
Industrial Development
Infrastructure
Retail
Healthcare
Education
Religious Institutions
Public Sector
Renewable Energy
Agriculture
Relevant Teams
Legal
Real Estate
Property Development
Asset Management
Finance
Construction
Property Management
Risk & Compliance
Investment
Operations
Relevant Roles
Real Estate Director
Property Development Manager
Legal Counsel
Real Estate Investment Manager
Asset Manager
Facilities Manager
Property Manager
Construction Manager
Chief Financial Officer
Real Estate Transaction Manager
Land Acquisition Manager
Portfolio Manager
Development Director
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