[co-author: Manuel Valasakis]
- The German Federal Court of Justice (BGH) has confirmed that cross‑parcel or “neighboring” heritable building rights constitute a permissible legal structure, abandoning its jurisprudence.
- These rights are still valid even where the building is technically divisible at the boundary line.
- For transactional practice, the decision opens new structuring possibilities while raising the bar for precise legal and technical drafting.
Background and core issue
In its judgment of December 19, 2025, (V ZR 15/24), the BGH fundamentally redefined the legal framework governing neighboring heritable building rights. The court expressly distanced itself from its earlier decisions of March 15, 1973, (V ZR 160/71) and October 21, 2016, (V ZR 195/15), resolving longstanding uncertainty in the legal and real estate community.
Concept and practical relevance of neighboring heritable building rights
A neighboring heritable building right refers to a heritable building right (Erbbaurecht) pertaining to a building that extends beyond the boundaries of the designated heritable building plot and onto one or more adjacent parcels. In substance, it functions as a heritable building right combined with a commitment to tolerate a boundary‑crossing building.
This model is commonly used where a developer intends to develop a large‑scale building spanning multiple parcels, but neighboring owners aren’t willing to sell their land and agree only to grant a heritable building right. The arrangement enables the creation of a single, cohesive building across several parcels.
The BGH’s findings
The court held that a neighboring heritable building right is still legally effective even if the building was constructed in a way that allows no technical and functional separation at the boundary – contrary to a contractual stipulation requiring indivisibility.
In practical terms: even if the building can technically not stand as two distinct structures, the heritable building right doesn’t lapse.
The dispute at hand arose because the heritable building right had existed since the 1980s and had been implemented without objection from any party for decades. The beneficiary then stopped paying ground rent, arguing that the right was invalid due to the indivisibility of the structure.
The BGH rejected this reasoning and relied heavily on the legislative history of § 1(3) ErbbauRG. These materials demonstrate that the original legislator never intended to prohibit cross‑parcel neighboring heritable building rights.
The earlier case law focused on fragmentary building rights (eg rights to individual floors) that could lead to unclear and conflict‑prone ownership structures. A neighboring heritable building right, by contrast, aims to enable the uniform construction and use of a building across multiple parcels.
Practical implications
The ruling has far‑reaching effects:
- Enhanced legal certainty for existing rights: The decision materially improves reliability in due‑diligence investigations by affirming the continued validity of long‑standing neighboring heritable building rights.
- Advisory work remains complex: Follow‑up legal questions – particularly concerning structural interfaces, maintenance obligations and technical dependencies – require careful, case‑specific analysis.
- Drafting of future arrangements becomes easier: The decision lowers doctrinal hurdles, but practitioners still have to regulate key aspects explicitly, including:
- the unity and intended indivisibility of the building;
- obligations on separation, division or partial removal; and
- coordination and harmonization of cross‑parcel easements such as rights of way and utility rights.
- Complementary structuring option: The neighboring heritable building right won’t replace the overarching Gesamterbbaurecht, but offers a valuable alternative in specialized development scenarios.
- No legislative action required: With the BGH’s clarification, previous calls for statutory amendment are now unnecessary.
Summary for practice
- Substantial legal certainty for existing neighboring heritable building rights.
- Complex follow‑up issues must still be addressed through tailored legal and technical solutions.
- Facilitated structuring of future projects though detailed and explicit contractual regulation is still essential.
- An additional, non‑substitutive instrument alongside the Gesamterbbaurecht.
- No need for legislative intervention following the BGH’s clear and comprehensive ruling.
[View source.]
