General Questions (Heritable Building Rights)

Multi-family house construction

Ouch. With a scaredy-cat as a landlord, the only option really is to shoot yourself.

It is not uncommon for there to be no adjustment for years and then suddenly a corresponding increase occurs. I once heard about an old lady who paid the same interest rate for decades and then overnight had to pay 300% (or so) more. But that is surely RTL news.

No, this is not fake news, but completely normal where there is a lot of leasehold land. And that is exactly one of the big pitfalls with leasehold properties. You have to accommodate the increase in your budget annually or at least keep it in mind. Some have forgotten this clause and are now facing ruin in their old age in their leasehold house because they can no longer manage it financially. It gets even "better" when the renewal of the leasehold becomes necessary and suddenly 4% p.a. on the current land value forms the basis. This way, the bargain quickly turns into a nightmare. One must not forget that the "leasehold" is an instrument from the Imperial era – consumer protection is not really built in. Simply adding an extension to a house without the consent of the leaseholder can already be difficult. With a new building it may still be justifiable, but 60 years later, or with a due sale from the existing stock, the situation is different – 1919 + 99 – the issue is only now surfacing.

No, this is not a hoax, but quite normal where there is a lot of hereditary lease. And this is exactly one of the big pitfalls with hereditary leasehold properties. You have to include the increase in your budget annually or at least keep it in mind. Some have forgotten this clause and now face the end in old age in their hereditary lease house, as they can no longer afford it economically. It gets even "better" with the necessary renewal of the hereditary lease right, when suddenly 4% p.a. on the current land value becomes the basis. This quickly turns the bargain into a nightmare. One must not forget that the "hereditary lease" is an instrument from the imperial era – consumer protection is not really built in. Simply putting an extension on a house without the consent of the hereditary leaseholder can already become difficult. Maybe everything is still justifiable with a new build, but 60 years later, or when a sale from the existing stock is due, the situation is different – 1919 + 99 – the issue is just coming up now.

may be. Quite possible even. There are simply areas where plots are not available, and then they are as expensive as the house to go on them. Existing buildings from the 80s with oil heating cost €600,000 plus. It might still be an alternative there. We build entirely with equity. We see it as rent. If it doesn’t work anymore someday, the place will be sold.

Good evening,

You are totally wrong.

That is probably your opinion, because the mere fact that there is a possibility that expropriation is possible does not set the probability to 0 for me.

You suffer a damage of 0! (except for a move – but you get a new house for that)

Well, a move is not exactly easy, when you think that the purchased plot of land, with more than 100,000 previous questions (Matthew was already helpful during the execution), was actually supposed to be the final destination.

Both types of plots show absolutely the same risk. There is no difference at all.

Isn't it typically the case with a heritable building right that the house may stand on the property for about 100 years and then the owner of the land is allowed to acquire the house? (let me guess, if the answer is yes, do I then get the "market value"?)

You are standing in your own way with a possible desire for a house. All potential builders weigh it up.........

How do you know that I am standing in my own way with considerations (of whatever kind) when the considerations are about purchasing a plot of land?

How do you also know whether I have not already asked myself most of the questions you listed in advance?

Kind regards

That is probably your opinion, because the mere fact that there is a possibility that expropriation is possible does not reduce the probability to zero for me.

Then you are not allowed to build anywhere in the world (especially not in other countries). Furthermore, you must not own any assets. Expropriation does not refer only to land.
Otherwise, please read up on the legal texts. You are addressing such an important topic that it is even enshrined in the Basic Law.
And if you see the probability as greater than zero, then I really feel sorry for you. No trust in our state anymore, or do you have so many people in your circle of acquaintances who have already been expropriated?

Well, moving is not exactly easy when you think that the purchased property, with more than 100,000 previous questions (Matthew was already helpful during execution), was supposed to be the final stop.

The 100,000 questions are your problem. The average builder asks far fewer and deals with the topic of location. With this, he can already avoid expropriation with the first and most important question. He simply does not build in outskirts or where railway lines, airports or highways are planned. He takes care of the really important issues.

Is it not typically the case with a hereditary building right that the house may stand on the property for about 100 years and then the owner of the land may acquire the house? (Let me guess, if the answer is yes, then I get the "market value"?)

The answer is yes and no. Usually, there is a clause that the hereditary building right holder can also get an extension of the hereditary building right. Alternatively, an agreed compensation amounting to X% of the market value. It is basically a buyback – but the hereditary building right issuer must provide the money to buy an outdated shack. And if suddenly 150 hereditary building rights expire in the building area, that will be an expensive affair.
The original builder has been dead for 60 years by then and has enjoyed his "land lease," as otherwise he would not have been able to build.

How do you know that I stand in my own way with considerations (of whatever kind) when the considerations are about the acquisition of a property?

That’s just a rhetorical question according to your posts, isn’t it? If you are already asking such questions about the type of property and obsessing over expropriation, which simply does not exist in normal areas in Germany.

P.S. I have one more curious question. However, it does not concern [Erbpacht]. Do you have securities (in particular shares or equity funds)?