A leasehold property is one that has been built on land owned by someone else.
If planned correctly, the owner will typically arrange for the building to be registered as a separate property in the Danish Building and Housing Register (BBR). The building will then be given its own entry on the register, where the title and any mortgage can be recorded. Additionally, the building owner will often have their right to use the land secured by a long-term land lease, which should also be registered.
However, experience shows that this is not always the case, which can make a transaction somewhat challenging.
It is also worth noting that a leasehold property may not be recorded on the land in question. Therefore, there may be a building belonging to a third party on the land that is not apparent from the title register.
Examples include production and storage buildings in port areas. These types of buildings are often not properly registered. This can make it difficult to establish the title to individual buildings.
Often, the building owner’s right of use is not registered on the land, and individual buildings are not registered in the BBR (Building Register) with their own property number (BFE number — specifically defined real property, in Danish: bestemt fast ejendom). Therefore, even if a building has its own title register and the owner’s title is registered, there may be an unclear connection to the buildings actually located on the land.
This issue is often exacerbated by the fact that there can be a large number of buildings on the same plot of land and that addresses are not always reliable for identification purposes (addresses may not be registered, or multiple buildings may have the same address). Furthermore, the number of buildings and their numbering in the BBR and Land Register can differ so greatly that they are of no help.
Therefore, checking the building’s title register alone is often insufficient to gain a complete understanding of what is registered.
A more comprehensive investigation and compilation of information from the Land Register, the BBR, cadastral maps, etc. is often necessary. There may also be situations where sufficient certainty cannot be achieved without the involvement of a surveyor to help update public registrations.
Fortunately, there is hope for the future.
To improve coherence between registrations in the BBR and the Land Register, a new system for registering leasehold properties has been introduced, effective from 1 January 2024.
The process now involves a surveyor first creating a new leasehold property with its own BFE number. The building can then be registered in the Cadastre at the Danish Geodata Agency, and finally in the Land Register’s title register. Overview and coherence are ensured by the fact that the building in question can be searched for in all these registers via the BFE number.
Improving data quality for older buildings has also been a focus. Between 2023 and 2024, the Danish Geodata Agency and the Land Registration Court carried out a project to harmonise the Cadastre and the Land Register by transferring BFE numbers from the Cadastre to the Land Register.
However, as previously mentioned, not all leasehold properties are identified by BFE numbers. Until this happens, extra caution should be exercised.
Gorrissen Federspiel’s Real Estate specialists are ready to help you navigate the hidden complexities of leasehold transactions, including ownership issues and missing building records.