When you appraise or buy a property in a city like Amsterdam, you quickly come across the concept of leasehold. This often raises the question, “Is the apartment right fully owned?” At first glance, this seems logical. After all, you buy a property, you have a notarized deed, and you can do anything with it. Yet the legal answer is often: no.
In this blog, we explain why an apartment right does not count as full ownership if the underlying land is leasehold. And why that also has implications for how to assess the ownership situation.
What is ground rent anyway?
Leasehold is a legal construct that gives someone the right to use land that does not belong to him or her. The owner of the land (often a municipality, such as Amsterdam) issues this right to a user (the leaseholder) for a long period of time. In exchange, the leaseholder pays a fee: the canon. Sometimes this canon is bought off for a long period of time.
What about apartment rights?
An apartment right is a right to a share in a building (and possibly the land) that is legally divided. You then have the right to the exclusive use of, for example, your home on the first floor, and co-ownership of the common parts such as the roof and stairs.
When an apartment complex is on its own land, the apartment right is a share in full ownership. But if the complex is on leasehold land, your apartment right is only a share in the leasehold – that is, a right of use, not ownership of the land.
Two questions, two times ‘no’
Many appraisal reports ask two seemingly similar questions:
- Is the apartment right fully owned?
- Is the apartment complex on private land?
For homes on leasehold land (as is common in Amsterdam), the answer to both questions is no.
- Question 2 is simple: the land belongs to the municipality. So not your own land.
- Question 1 is more subtle: even though you are the legal owner of the building (the superficies), your apartment right is a partial right in the leasehold, and therefore not in full ownership of the whole.
But doesn’t the building belong to me then?
Yes and no. The superficies (the property itself) are legally yours. You have the right to use it, remodel it, sell it, and so on. But the right you have to the land is derivative, namely via ground lease. You do not own the land, and therefore do not fully own the whole in which you have an apartment right.
What are the implications?
For buyers and appraisers, this means:
- The property is not on private land.
- The apartment right is not full ownership, but a right of use via ground lease.
- This legal nuance can affect value, fundability and risk assessment.
For lawyers the difference is sharp, for laymen sometimes confusing. But clarity on this is important when buying or selling, financing and valuing real estate.
In conclusion
Amsterdam is full of homes that are on leasehold land. Many buyers do not realize that they are not full owners of their land. This is often not a problem in practice, as long as people understand how it works legally. It is essential for appraisers to properly interpret this difference in their report.
A house may be your home, but the ground beneath it may not be.