Property as equity even without transfer

Meal time everyone!

While we are struggling with the city regarding the building permit, I am thinking about how we should best handle the property.

The situation is that we are receiving a plot of land as a gift from my parents. For that, we first need to apply for the subdivision.
To be able to apply for or carry out this subdivision, we would first have to establish the future boundaries.

Attached is a screenshot with the displayed site plan:

My parents own Plot A. We are supposed to get a part of it. The future boundary is represented by the blue line.
Plot B belongs to my parents and my aunt. Plot A is separated from Plot B by the red line.

To ensure future development of Plot B, the space for a turning area must be kept clear.
The size of the turning area strongly depends on the size of the development on Plot B.

The eastern property boundary of our plot is therefore not fixed yet, which is why we cannot apply for subdivision yet.
Would a declaration from my parents (notarized if necessary) confirming that they are gifting us the part of the property be sufficient for a bank in this case?
How does it work with registering the land charge? Because we would not yet have the property then...

How should we proceed best?

Thank you very much!

Hello matte1978,

I would initially separate the matters mentally into

1. Financing and
2. Division/Development/Turning circle

Regarding 1:

Basically, you can submit the building application on your parents' property and later divide it, but this has various drawbacks – in NRW the division might be more expensive, and notary costs will likely increase. Additionally, until the division, your parents would be liable for your debts in case of an emergency, as the financing affects the entire property. So discuss this with the bank and especially the notary to see what options are available to you.

Regarding 2:

Is there a development plan? Is the turning circle indicated there as such? The turning circle looks like a standard design; it could just as well be changed asymmetrically towards property B, so that you have more space left to build. Your aunt’s property seems to be somewhat larger, so a bigger share of the turning circle could also be placed there without affecting the development of property B.

This helps you, the building authority doesn’t care, and it doesn’t hurt your aunt.

Best regards
Dirk Grafe

Hello Dirk,

Thank you very much for your response.

Regarding 1.

We are currently in talks with the city concerning the building permit. The plot still belongs to my parents at the moment. The boundaries with my parents are also agreed upon, the subdivision is to be applied for as soon as we have the building permit and thus the turning area is secured.
Although there is still a land charge registered on the property, it was already arranged back then that a certain part of the property can be separated, with the land charge remaining on the remaining part. This would also ensure that "our part" is unencumbered.
However, since we want to register our land charge on the new parcel, it must exist first before we can finalize the financing. That is why I asked about the possibility of whether the subdivision can be done afterwards, or if the banks are quite strict and we absolutely have to own the already subdivided property, or if a corresponding declaration from my parents would be sufficient.

Regarding 2.:

Many years ago, there was a preliminary building enquiry by my parents and aunt regarding property A AND B. In response to this enquiry, the city specified a turning option. An attachment showed several turning possibilities. Two of these were available to us. The one we marked corresponds to one of them but is still by far the smallest.

Attached are some plan excerpts with the turning options specified by the city:

- According to the city's supplement sheet, the two red turning areas and the orange turning area are “turning bays for trucks up to 10m length (3-axle garbage truck, 22t truck)

- The white one is our preferred, smaller turning area for trucks up to 8m length (2-axle garbage truck, 16t truck). According to this sheet, there is only the synchronous turning bay for the smaller one, not a one-sided one.

This actually shows quite well that the smaller one is better suited, also because property B would not be too burdened. A 3m parallel to the property boundary is not exceeded with the smaller turning area. This would make building without restrictions possible.

However, since property B is a relatively steep slope below street level and because only the upper part may be built on, it is extremely important not to exceed the aforementioned parallel and thus exert a kind of building encumbrance. Property B must remain completely unburdened.

The matter with the building authority is very delicate anyway. On the one hand, they want the turning area, on the other hand, they want nothing to do with it. Construction costs are also to remain private, as are liability and security obligations. We are now in talks with the city about this...

All quite tricky, I hope I conveyed it understandably :)

Regards

Mathias

Hello Mathias,

several things are interrelated here that need to be checked, which will be quite difficult in the forum.

I would be interested in:

1. Do you already have an architect/authorized construction submitter?
2. Is there a legally binding approved development plan?

The rest possibly via PM.

Best regards
Dirk Grafe