GER: Right to Live on Own Property Is Seizable

Apr 28, 2023 Benn-Ibler Rechtsanwälte

According to the German Federal Court of Justice (Bundesgerichtshof, hereinafter BGH), the right to live on one’s own property can be seized at any time. Thus, cancellation of this right by an insolvency administrator is possible in the event of insolvency of the property owner who is the rightful tenant. It is immaterial whether or not the tenancy right was established from the very outset or put in place at a later point in time.

The party involved was the legal owner of a developed plot of land to which he had assigned himself a tenancy right with the provision that exercising this right could not be transferred to third parties. He incorporated the property into a civil-law partnership (Gesellschaft bürgerlichen Rechts, hereinafter GbR) as a contribution. The GbR was entered in the land register as owner. Later, insolvency proceedings were opened against the assets of the parties involved. The appointed insolvency administrator filed a claim for restitution against the GbR. Moreover, he authorised and applied for cancellation of the original owner’s tenancy right. The owner subsequently filed an appeal against the cancellation which, again, was dismissed by the BGH on points of law.

In principle, limited personal easements such as the right of tenancy as a special case of a limited personal easement are not part of insolvency estates. They are not transferable and therefore not seizable. According to BGH case law, however, there is an exception to this rule. Limited personal easements are seizable in cases of identical personal status if, as in this case, the owner of the property and the holder of the tenancy right are one and the same person.

It is then irrelevant with regard to the seizability of the owner's tenancy right whether this right was created as the owner's tenancy right from the very beginning or whether the rights of tenancy and ownership were joined at a later point in time. Due to seizability, the tenancy right becomes part of the insolvency estate in the event of the insolvency of the owner-occupier and can thus be utilised by the insolvency administrator.

BGH, V ZB 64/21 (02.03.2023)

[1] Under German law, a GbR has legal capacity.