Temporarily lease land

Small misunderstanding with the "being able to buy". I thought it was meant financially. But it was probably more about whether the owners would then also sell. Then I have to agree with that. That must definitely be contractually stipulated, otherwise we're playing the lottery here. The aspect of cash flow is an interesting one. I will try to bring that up with the sellers before the appointment with the tax advisor.

Hello Andreas,

this definitely needs to be clarified with a lawyer/tax advisor. Theoretically, however, it is possible to build on someone else's land; I also know a few cases where this was done (temporarily). Among strangers and especially with laypeople, it must be secured through comprehensive advice, although I would say instinctively that this can also work without a complicated leasehold agreement.

However, one must be aware that for the 4 years one acts as a community of owners in terms of building law, i.e., in all building law matters all owners/entitled parties must always be considered or the respective rights and obligations must be clearly described in the contract in advance.

Best regards
Dirk Grafe

Theoretically it is possible to build on someone else's land, I also know a few cases where this was done (temporarily).

This is also practically possible ;) - however, no bank finances it. I have only seen such a construct - own property on someone else's land - once in my 25 years since training (it was a loan approval without sense and understanding, which actually should not have been granted).

That is practically possible too ;) - but no bank finances it

I think so too. That is actually Harakiri.

Even with leasehold, the bank pays attention to a sufficiently long remaining term. In other words, the bank will not accept a 4-year leasehold contract.

The best option here would surely be, as already mentioned:
a) Agreement on immediate purchase, for which you need to know how high the additional burden on the current owners would be, meaning how to agree on the price. The obstacle does not seem insurmountable to me intuitively – just because the owners’ tax advisor threw something out there ("would be better,...") doesn’t mean it can currently be quantified.
b) Purchase with payment deadline in 4 years and immediate land registry entry, if cash flow is relevant and not the transfer of ownership.

Regards
Thorsten

That is also practically possible ;) - however, no bank will finance it.

I can hardly imagine that, it also has little to do with harakiri. If two commercial owners agree for the mutual improvement of property and operations, but the subdivision takes about a year for various reasons, then one simply builds their project first on the neighbor’s land. The investment amounts in the two cases that come to mind were in the high six-figure range (chicken coop and biogas plant). Otherwise, building sometimes takes place on the parents’/children’s land and is later subdivided.

Financing is not a problem at all, because in case of doubt you have both debtors on the hook.

Best regards Dirk Grafe

Which seller, without having sold the property, provides a complete stranger with their property as collateral. The builder throws themselves in front of the train, the property owner is stuck with the debt (they also have a house, but they don't want it)!?

You are talking here about two commercial owners, I only see one owner, namely the property owner (who cannot/will not sell their property yet). Besides, this is not about a partition (for example, a priority notice of conveyance can also be registered on a property area that is yet to be divided, and it can sometimes take several years – this is quite normal). Building on the property of parents or children is a completely different story, as a declaration of purpose for the land charge will be unproblematic there.

In the constellation mentioned by the OP, I guarantee you that no bank will finance a house on someone else's property, since the seller (who is not even a seller yet) will never see a reason to be liable for the house builder.