Extension to the parental home: questions about inheritance and land division

You want to build on your parents' property?

Actually, one should also know:
- Is there additional wealth? What income do the parents have? How old are they actually? Married?
- Do you have additional wealth (to buy out your brother)?

No, my parents do not have any other noteworthy assets.
My parents are both in their early 60s, happily married, and live together in their house.
My father is already retired, my mother wants to work for 2 more years. Together they receive about 3000 euros in pension (could also be more, I'm not quite sure).

I don't really have additional assets. A few stocks which I would like to keep.

Deleted because a post was not seen. Sorry!

Hello, Michael,

I have some questions and comments regarding this:

[*]My parents' house is very old (1936), well maintained but not up to the latest technical standards. The house has an estimated value of 50,000 euros.

Who determined this value? Personal estimate?

If the value is plausible, the value of your brother’s inheritance drops to zero, since your parents’ roughly 22-year usufruct right will statistically "consume" the value of the house.

It is also questionable what to do with a house that hardly has any value today and would more or less already need to be completely renovated to meet the current technical standards, after another +20 years of use. The house probably has a remaining useful life in its current condition of about 20 years, possibly less. Conversely, this means that you would have to invest massively now in order to still have a value in 20 years that your brother inherits. Otherwise, your brother will only inherit demolition costs.

Furthermore, it must be clarified now in what form an extension to the old house would be built, i.e., can your parents’ house be demolished without affecting your new building?

[*]I have a brother, his inheritance must be taken into account in the agreement.

See above – the question is whether your brother inherits anything at all besides the value of the land.

[*]I have informed myself at the building authority; the property cannot be divided.

That is possible, but very unlikely. Contact a publicly appointed surveyor from your region – any professional colleague can explain to you shortly what options are available, they only need the correct address or the parcel designation (district, block, parcel).

If possible, I would like to have my parents' property registered as a land charge to get a more attractive loan.

If I were your brother, I would object to that. For this reason alone, it should definitely be checked whether the division can actually be carried out – otherwise, you have to resort to the crutch of “partial ownership,” which legally means that everything is somehow always connected. This is great for the lending bank – they take everything in doubt. This would be bad for your brother, because if you fail to service the loan, everything could go into foreclosure. Neither you, your brother, nor your parents have an interest in that.

1. My parents transfer half of the property to me. Since division of the property is not possible, I will probably have to be entered in the land register? Or does a residential property ownership (WEG) have to be established (similar to condominiums in multi-family homes)? I am now paying out my brother a quarter. The other half including the house will later be divided 50/50.

I do not understand the idea of the 1/4 payout at all. That complicates everything.

In any case, you would become the owner in the land register, supplemented by a subdivision plan.

2. The entire property remains in my parents' ownership, I am building now.

The entire property does not remain in your parents’ ownership/property.

In the event of my parents’ death, it will be divided between my brother and me. We are considering that he gets the house since he has had to wait longer for his inheritance.

There will be no division anymore; your brother takes over your parents’ shares completely if he is not (partially) paid out currently.

Have a notary explain this to you calmly; in my opinion, various thoughts are going in a completely wrong direction/conception.

In my assessment, the deal is extremely bad for your brother because he bears the entire risk that your parents’ house will still have any value in 20 years, and he also carries your loan default risk. Basically, he has to hope to invest regularly now and in the future, completely renovate and/or demolish everything in 20 years, and only then can he build/live there himself.

You, on the other hand, get building-ready land and can do whatever you want immediately.

Best regards
Dirk Grafe

We, or rather my wife, have just gone through the whole thing. Her sister built an extension onto the parental home. Their parents are even almost 10 years younger. Such a matter is very, very difficult and must be well thought out. The sum was somewhat lower (extension amount: €180,000, house value including land €170,000). After much consideration, they transferred the land and house to the sister, and the parents have a lifelong usufruct right (with many special clauses and scenarios of how the house would revert to the parents). The sister would also later take care of possible care for the parents. The arrangement is certainly legally the most interesting since each occupant of the property is on the safe side. The situation was unfortunate for my wife, as she actually had no claim to an inheritance due to the usufruct right and the young parents. This was offset by the notary and would have resulted in break-even in the end. They then agreed otherwise so that everyone was satisfied. She was paid out a sum X and with that, she is out of ownership and inheritance of the house. Of course, she would have been better off if the distribution of ownership had taken place after the death of the parents, but she now has the money and later no contracts regarding the care of the parents. In addition, due to the usufruct right, the house is practically not salable for the next 10-15 years.

From my point of view, your two scenarios are untenable. Your parents of course do not want to give up their property. That gives them the feeling that they are giving away their belongings and end up with nothing. That is a very human way of thinking and quite understandable. However, if it is certain for them that you two sons will inherit it, then in the end it makes no difference. They can live there forever and do whatever they want if they have a usufruct right. Perhaps one should discuss this scenario properly in detail with a lawyer to take away their fears.

Everything else is very risky for you, as you never know how things will develop. You currently have a value of €250,000 and want to invest €350,000. Then you have a house that partly belongs to you on land that does not belong to you or only partially belongs to you. What do you do if your parents really want to sell belongings? What if they suddenly put tenants in and you don’t get along with them at all? What happens if you fall out with your parents and they bequeath the entire inheritance to your brother? In addition, all construction measures must be approved by all owners each time (bureaucratic effort), and you have to register and contract many things (expensive!).

The house may now have a value of €50,000 (if that value is correct). What value does it have after the conversion and what share of that belongs to your parents? Share of living space? Financial share? ...? How does the value change until your parents’ death, and how high is their share then? It is quite possible that in the meantime, the land and house prices in your area will fall sharply (then good for you). But if they rise sharply, then in the end, you pay for your house twice.

This is all very difficult and will probably also lead to tensions within the family, as often the ideas differ. But now the arrangement is much easier than in a few years. Don’t make the mistake of postponing the whole thing to avoid disputes now. Later they will be worse and possibly with a rude awakening.

Otherwise, find a building plot and build new. For €350,000 and possibly a payout to your brother of €100,000-125,000, you can also build a new house.

Hello Dirk Grafe,

Thank you for your detailed response.

The 50,000 euros are just an estimate from me (us). We simply looked at how much similar houses in our settlement were sold for and just deducted the value of the land (Boris). It won’t be worth much more than that. The valuable part is clearly the land because it is located in a very nice area. It is more or less out of the question that my parents would now invest heavily in the house. Only a few adjustments for old age will be made. Walk-in shower, etc.

My house will be built in such a way that a demolition of the parents’ house would be possible.

Since we clearly favored dividing the land, we researched it through several channels. Unfortunately, it cannot be subdivided.

So, the idea of paying out ¼ should work as follows:

My parents transfer half of the land to me. From this half, I pay my brother half (money), that is a quarter of the total land (50,000 euros). The other half including the house remains with my parents. This half will again be divided in case of inheritance. Whether with profit or as a loss (demolition costs). The idea behind this is that my brother now receives exactly the same amount as I do. No one owes anyone anything.

Zu Lösungsansatz 2
Why can’t the land remain the property of my parents?

I am open to other approaches. Any suggestions?

Hello BIBO,

I agree 100% with all your statements.

Of course, the best thing would be if the entire property were transferred to me and my parents received a lifelong usufructuary right. However, I would have to pay off my brother now. Unfortunately, I don't have the money at the moment. Therefore, we are looking into other possibilities. But as you can see, we are still having some difficulties here. Therefore, I am grateful for any suggestion.