Glossary · Law and contract
Ground lease (Erbpacht)
The right to own a building on someone else's land, against a running fee and for a limited period.
In Germany it is called Erbbaurecht, in Austria Baurecht. The building belongs to the buyer, the land does not, and an annual ground rent is due for it. The closer the end of the term, the more the value falls, and banks often lend only at a discount.
Where it appears in the report
A ground lease appears in the Warning signals chapter with its severity and affects financeability in the Bank analysis. Look at the sample report →
Common questions about it
What happens when the ground lease ends?
The contract decides. Often the building passes to the landowner against compensation, or the term is extended on new conditions.
Related terms in the glossary
Last updated: 2026-09-15