Established in the German Civil Code around 90 years ago, ground leases represent a legal institution. The advantages of legally seperating the property into land and building offer the property market a wide range of cutting-edge application options.
Ground leases enable the legal seperation of land and building. As the owner of the ground, the owner of the land grants the recipient of the ground lease the use of the land for buildings standing on it for a period of up to 198 years for payment of regular ground rent.
This right is fixed by the conclusion of a ground lease agreement and is entered in the first line in the title register of the building erected. Once created, both the land and the building can go their separate ways. The land can thus be sold while the building and the added value associated with it remain in the absolute control of the recipient of the ground lease.
