Right of perpetual use

Perpetual Right of Use - The perpetual right of use is a right in rem governed by the Condominium Act (§ 31 WEG) that grants a beneficiary the commercial use of specific rooms within a condominium complex on a permanent basis. It is the commercial counterpart to the perpetual right of residence and is recorded in the land register. The holder of a right of permanent use may use the premises without being the owner of the unit - similar to a heritable building right, but limited to premises within a building.

Legal Classification

The right of permanent use is established pursuant to § 31 WEG and entered in the land register. It may be established for a definite or indefinite period and is inheritable, transferable, and encumberable (e.g., with a land charge). Unlike a unit owner, the holder of a permanent right of use is not a co-owner-they have no voting rights at the owners’ meeting, unless the declaration of division provides otherwise.

Typical applications:

• Retail stores on the ground floor of a residential building that cannot be structurally separated as separate partial ownership units
• Medical practices or consulting offices in residential complexes
• Commercial spaces with common areas that are difficult to demarcate

Distinction from the right of permanent residence

The perpetual right of residence (§ 31 WEG) entitles the holder to live in the premises, while the perpetual right of use entitles the holder to commercial use. Both rights are entered in the land register, are rights in rem, and can be sold or encumbered. In practice, both are rare-most cases are resolved through partial ownership (commercial use) or exclusive ownership (residential use), as these structures are clearer and easier for all parties involved to manage.

The permanent right of residence and the permanent right of use can be combined: In a building, a party may hold a permanent right of residence for a residential floor and, at the same time, a permanent right of use for a retail space on the ground floor. Both rights operate legally independently of one another and can be sold or encumbered separately-which, in practice, can lead to complex ownership and usage structures that require careful legal review.

Obligations of the Holder of a Permanent Right of Use

Although the holder of a permanent right of use is not a co-owner, they nevertheless bear a number of obligations. As a rule, the deed of creation contains provisions regarding cost sharing for the facility’s operating expenses-similar to the monthly maintenance fee for condominium owners. Maintenance obligations for the used premises may also be imposed on the holder. If the holder substantially and persistently violates these obligations, the right of perpetual use may, under certain conditions, be revoked by a court-a procedure that is rare in practice but theoretically possible (Section 36 WEG by analogy).

Valuation and Transfer

The right of perpetual use has an independent economic value that depends on the market rent level, the remaining term, and the location of the premises. In real estate valuation, the value of a right of perpetual use is calculated similarly to a usufruct: annual use value (local commercial rent) multiplied by a multiplier. For the owner of the complex, the right of perpetual use constitutes a burden that reduces the value of the unit in question or the entire property. The transfer of the right of perpetual use to a third party requires a notarized declaration of assignment and registration in the land register.

Right of Perpetual Use vs. Partial Ownership vs. Usufruct - Distinction

Feature	Right of perpetual use (§ 31 WEG)	Partial ownership (§ 1 WEG)	Usufruct (§ 1030 BGB)
Ownership share	No - only right of use	Yes - co-ownership share	No - only right of use
WEG Voting Right	No (except special provisions)	Yes	No
Transferability	Yes (assignment + land register)	Yes (purchase agreement + notary)	Generally not transferable
Land Register Entry	Yes (Section II)	Yes (land register page)	Yes (Section II)
Encumbrance	Yes (e.g., land charge)	Yes	No (personal usufruct)
Typical Use	Commercial space in a condominium	Retail unit, office, parking space	Residential/usufruct rights for parents

Practical Tip for Owners in Nuremberg and Franconia

We recommend that buyers in the Nuremberg metropolitan area check the land registry extract for registered permanent residence or permanent use rights when reviewing condominium complexes. Such rights can significantly influence the potential uses and value of individual units-for example, if a ground-floor retail space has a permanent use right that is not tied to ownership of the unit. In Nuremberg’s Old Town and the Wilhelminian-style neighborhoods (Gostenhof, St. Johannis), such arrangements are found in older buildings where the legal structure has evolved over time and is not always transparent. In case of doubt, a notary should fully clarify the legal situation before the purchase.

Frequently Asked Questions

Is a right of perpetual use the same as partial ownership?

No-partial ownership is separate ownership of non-residential spaces and is firmly linked to a co-ownership share in the common property. The partial owner is a full member of the condominium association (WEG) with voting rights and all associated rights and obligations. The right of perpetual use is merely a right in rem without a share of ownership-the beneficiary is not a co-owner and generally has no voting rights in the condominium association. In practice, we recommend structuring ground-floor retail units as fractional ownership whenever possible, because this structure is more transparent, easier to finance, and better known in the market than the less common right of perpetual use.

Can a right of perpetual use be deleted?

Deletion requires the express consent of the beneficiary-unilateral termination by the owners’ association or the owner of the entire complex is not possible. The right in rem enjoys full grandfathering. In the case of time-limited rights of perpetual use, the right automatically expires upon the expiration of the term; formal cancellation in the land register then takes place upon request. The cancellation fees at the land registry office are based on the value of the right. If the right of perpetual use is to be terminated by mutual agreement before the term expires, the owner and the beneficiary must agree on any compensation-the economic value of the remaining period of use is the decisive benchmark for negotiation.

How does a right of perpetual use affect property value?

The right of perpetual use encumbers the property and reduces the value of the affected unit for the owner, as the owner cannot use the premises themselves nor rent them out at market rates. Conversely, the right of perpetual use has an independent economic value for the beneficiary-they can use the premises without paying the full market price. When valuing the entire property, the present value of the right of perpetual use must be taken into account as a liability. When financing a unit encumbered by such a right, it should also be noted that banks generally take a more conservative approach to lending against a property restricted by a right of perpetual use than against an unencumbered one-which can reduce the maximum possible financing amount.

Back to the Real Estate Glossary.