Real Estate Industry

A Green Lease is a rental or lease agreement that legally regulates sustainability goals, such as energy efficiency, resource use, data transparency, and ecological standards in building operations.

Green Lease regulations must be specifically designed, particularly regarding obligations, metrics, and legal consequences; non-binding ESG letters of intent generally have no legal effect.

In a usufructuary lease (Pacht), in addition to the transfer of use, the use of the yields ("fruits") is also permitted, which is legally relevant particularly in agriculture and the wine industry.

Wine industry lease agreements often involve long terms, management obligations, investments in vineyards, as well as climate- and yield-related risks that must be considered contractually.

Section 550 BGB meant that long-term lease agreements were considered indefinite and could be terminated prematurely if the written form requirement was not met.

Through the Bureaucracy Relief Act IV (BEG IV), which came into force on January 1, 2025, the strict written form requirement for long-term commercial lease agreements under Section 550 BGB was replaced: now, text form (Section 126b BGB) is generally sufficient if a tenancy is concluded for more than one year. This allows contract conclusions and amendments to be made via readable textual communication (e.g., email, PDF) without requiring a handwritten signature. At the same time, the former "written form trap" – where the contract was considered indefinite if the form was not observed – remains relevant, but will in the future be shifted to the text form as a minimum requirement. Existing lease agreements concluded before the act came into force are generally still subject to the old written form requirement until December 31, 2025; thereafter, the new regulation also applies to old lease agreements.

In an Asset Deal, the property itself is transferred; in a Share Deal, shares in the property-owning company are acquired, each with different tax and liability consequences.

An Asset Deal allows for a targeted selection of the assets and liabilities to be transferred, but requires individual transfers and is regularly subject to real estate transfer tax.

Risks exist primarily in existing liabilities, corporate law liabilities, legacy tax issues, and long-term contractual obligations of the property company.

Real estate transfer tax arises upon the direct acquisition of land as well as upon certain share transfers in property-owning companies. The following are subject to real estate transfer tax:

a purchase agreement under the law of obligations or another legal transaction that establishes the claim for transfer of ownership, as well as the real agreement on the transfer of ownership (Auflassung) if no legal transaction preceded it that established the claim for transfer of ownership. The assessment basis is regularly the agreed purchase price. If the purchase price is subsequently reduced – for example due to defects, purchase price adjustment clauses, or subsequent agreements – this does not automatically lead to a reduction in the assessed real estate transfer tax. An adjustment is only made upon express application by the tax debtor to the tax authorities and requires that the change in purchase price be recognized for tax purposes.

RETT stands for Real Estate Transfer Tax. It is incurred not only upon the direct acquisition of a property (Asset Deal) but also upon certain share transfers in property-owning companies (Share Deals) if legally defined participation thresholds are exceeded. RETT blockers refer to corporate law structures aimed at avoiding real estate transfer tax events by ensuring that the relevant participation thresholds (in particular 90%) are not reached or maintained. Typical models include participation models with multiple shareholders and compliance with statutory holding periods to prevent tax attribution. However, RETT blockers are subject to narrow legal limits: anti-abuse regulations, economic attribution facts, and tightened participation thresholds mean that such structures only remain tax-effective with careful planning and consistent compliance with legal requirements. Faulty or purely formal designs can retroactively trigger real estate transfer tax.

In a sale-and-leaseback structure, a property is sold and simultaneously leased back by the seller to create liquidity while continuing use.

Central aspects include the coordination of the purchase and lease agreements, terms, termination rights, tax classification, and accounting effects.

Operating facilities (Betriebsvorrichtungen) are movable assets that directly serve the business and are not necessarily part of the property for tax purposes. Typical examples of operating facilities include technical plants and machinery (e.g., production machines), conveyor and transport systems (e.g., conveyor belts, cranes), technical infrastructure in special-purpose properties such as cooling and ventilation systems in logistics or food properties, server racks, busbars, UPS systems, and cooling technology in data centers, filling, pressing, or storage technology in agricultural and wine-growing operations, and permanently installed but operationally characterized systems that do not primarily serve the building function. The distinction between a building component and an operating facility is complex in individual cases, but has significant tax and accounting implications, particularly regarding trade tax, real estate transfer tax, and purchase price allocation.

Certain operating facilities can lead to income no longer being considered as asset management, thereby triggering trade tax.

The availability of power – particularly grid connection capacity, redundancies, and supply contracts – is a central location factor. Without a secured power supply, a data center is generally neither economically viable nor eligible for permits.

Waste heat from data centers can be fed into district heating networks or adjacent uses. Legally relevant factors include energy law requirements, municipal requirements, and ESG criteria, which increasingly influence permits and financing.

Data centers are regularly held via property companies due to complex operator, energy, and contractual structures. A share deal allows for the preservation of existing permits, contracts, and infrastructure connections, but brings with it increased corporate and tax law audit requirements.

A Powered Plant refers to a plot of land or a property where building rights, secured power supply, and basic technical infrastructure are already present or bindingly assured. Such locations are considered particularly developable, as major hurdles of data center development have already been overcome.

Data centers are highly energy-intensive facilities. Their permit eligibility regularly depends on planning law admissibility, secured power connection, and concepts for waste heat utilization being in harmony with one another. A lack of coordination can lead to permit risks, delays, or operational restrictions.

Data centers are regularly held via property companies due to complex operator, energy, and contractual structures. A share deal allows for the preservation of existing permits, contracts, and infrastructure connections, but brings with it increased corporate and tax law audit requirements.