Early transfer of property ownership
February 23, 2011 | 25,00 EUR | answered by Bernhard Müller
My parents own a piece of land. The house on it is to be demolished. Our plan now is for my parents to transfer ownership of my share of the land (1 half) to me now. In return, I will build either a two-family house or two semi-detached houses on the entire property. However, I have a sister. She will only receive the second half of the property after my parents' death. The house, however, belongs to me (as I built it). How can this be arranged and what if we only build a two-family house? In that case, my sister could move into the ground floor and use her share of the land, but not sell it, as I also live in the house. Now we are considering whether we can actually implement this plan, so that there will be no unpleasant surprises when my parents pass away.
Dear questioner,
According to § 94 I BGB, the buildings standing on a property are essential components of the property. Therefore, according to § 93 BGB, the house can only belong to the owner of the property. Since it doesn't work like that, your plan needs to be changed.
One possibility would be to build the house, whether it's 2 semi-detached houses or a 2-family house, on only one half of the property. Then your sister could get the undeveloped half. This would be recommended if you both want to use the entire house for yourselves.
If your goal is for you and your sister to each use one half of the house, it makes sense to build 2 semi-detached houses. One on your half of the property and one on the half your sister will receive. A mortgage will be registered on your sister's half of the property. At the notary, you and your sister can then have a contract drawn up stating that your sister will pay you amount X (value of the house) when she sells her half of the property, and this claim will be secured by the mortgage. Your sister can then use and sell her half of the property. This doesn't change the fact that the house on your sister's half of the property belongs to her, but you won't incur any loss if the property is sold. Alternatively, it could also be notarized that amount X must be paid to you upon the occurrence of inheritance, or that the house will be appraised upon the occurrence of inheritance and this appraised value must be paid to you either at once, in installments, or upon the sale of your sister's half of the property. This takes into account possible changes in value between the construction of the house and the occurrence of inheritance. It is also possible to stipulate now that your sister will pay amount X upon the occurrence of inheritance and that this amount will decrease by Y % each year until the occurrence of inheritance. This would be recommended if your parents are likely to continue using the semi-detached house for several more years and want to make structural changes there.
If your goal is for your sister to live in one half of the semi-detached house while you still retain control over what happens to the house, a usufruct right according to §§ 1030 ff. BGB can be registered in your favor on the half of the property belonging to your sister. This is the solution that comes closest in a legally permissible way to the scenario where the property belongs to the sister and the house belongs to you. You could then rent the house to your sister.
To find the variant that best serves your goals, please describe in your follow-up what objectives you are pursuing with the planned approach. Then one of the aforementioned variants can possibly be adjusted to best achieve your goals.
I hope this initial overview was able to help you.
Sincerely,
Bernhard Müller Attorney at Law
