declaration; or an instalment sale by which the landowner will pay instalments on the sale of the structure until the (normally long) term of the transaction expires. The latter option will be most unsuitable, because by law an option can last for five years at most.

Austria

A contractual solution can be provided by a contract for organising and overseeing a construction (Baubetreuungsvertrag). This type of contract has been developed in practice under the principle of freedom of contract without any specific statutory provisions regulating it. The parties to the contract are the organiser (developer) and the initiator. The organiser (B) is obliged to conclude construction and financing contracts in the name of the initiator (A) in order to have buildings constructed on land belonging to the initiator. A contract for organising a construction contains elements of a contract for services and a mandate.14 If a contract for organising a construction is closely connected with the acquisition of land by the initiator (A), it is deemed to be a development contract (Bautra¬gervertrag), which is subject to special legislation (Bautra¬gervertragsgesetz).15 After the construction of the building, B can manage the structure/buildings on the basis of an income-producing (usufructuary) lease.

A can grant B a hereditary building lease (superÞcies). Under the grant, B acquires ownership of the building and a right of use with regard to the land (Law on Building Rights, § 6, para. 2). The term of a building lease must be between ten and 100 years (Law on Building Rights, § 3, para. 1). On expiry of the building lease, the landowner acquires ownership of the building and has to compensate the holder for a quarter of the value of the building (Law on Building Rights, § 9).

The building can also be constructed as a superstructure (Supera¬diÞkat) on the basis of a legal relationship which entitles B to construct his/her own building on A’s land. A superstructure is a building, which, in contrast to other buildings, is legally independent from the land on which it is constructed. Its ownership does not follow the ownership of the land (Civil Code, § 435; for other buildings, see Civil Code, § 297). Whereas ownership of the land remains with the landowner, ownership of the superstructure is acquired by the contractor who erected the

14Krejci, in Rummel, Kommentar, vol. 1, §§ 1165 ff., para. 24.

15Bo¨ hm and Pletzer, in Schwimann and Verschraegen, Praxiskommentar, vol. 2, s. 2; BTVG, para. 6.

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superstructure.16 Contrary to building rights, a right of superstructure cannot be established with regard to an existing building.17

A building may only qualify as a superstructure if the developer intends to construct the building for himself/herself and wants the building to remain on the land only for a limited period of time. A limited destiny for the building is inferred from the appearance of the building,18 its purpose19 and the contractual relationship between the developer and the landowner.20 However, it is not relevant whether the building can be removed without destruction.21

Although a superstructure may be registered in the Land Register, registration is not obligatory and only has declaratory effect.22 Its legal basis can be a lease, a loan, a precarium or a servitude.23 Most frequently, the landowner and the developer conclude a contract of lease that falls under the Law on Tenancy if the superstructure serves as residential premises under this Law.24

The ownership of the superstructure is transferable25 and it may also be acquired by the landowner.26 The constructor originally acquires ownership simply by constructing the building.27 However, the transfer of the property requires the deposit of certain documents with the court.28 The superstructure can also be mortgaged,29 for example, as security for a loan covering the cost of construction.30

16See 3 Ob 158/93; JBl (1994), p. 250.

173 Ob 158/93; JBl (1994), p. 250; recently 2 Ob 242/05k; RdW 2007/626 600; Kletecka, Rechberger and Zitta, Bauten, p. 31, para. 33; Kletecka, in Koziol and Welser, Bu¬rgerliches Recht, vol. 1, p. 434.

183 Ob 67/81; JBl (1982), p. 481.

197 Ob 71/56; EvBl (1956), p. 148; OGH 24.2.1982; 3 Ob 67/81; JBl (1982), p. 481; OGH 16.4.1987; 7 Ob 513/87; JBl (1987), p. 779.

203 Ob 76/86; JBl (1987), p. 179; 5 Ob 98/90; NZ (1992), p. 66 (Hofmeister).

214 Ob 533/91; wobl (1992), p. 7 (Wu¨ rth); OGH 16.4.1987; 7 Ob 513/87; JBl (1987), p. 779.

223 Ob 17/88; JBl (1989), p. 119; 5 Ob 119/00m; NZ (2001), p. 499 (Hoyer).

23Rechberger and Oberhammer, ‘Das Supera¨dificat’, para. 60.

241 Ob 565/84; JBl (1985), p. 107; 1 Ob 704/85; MietSlg 37.223; 1 Ob 588/89; wobl (1989), p. 73; 4 Ob 533/91; wobl (1992), p. 7 (Wu¨ rth); OGH 11.12.1984; 5 Ob 607/84; SZ 57/194; 6 Ob 517/85; HS 16.536; 6 Ob 565/95; JBl (1995), p. 715; 5 Ob 115/03b; immolex 2004/22; Bydlinski, ‘Supera¨difikate’; Rechberger and Oberhammer, ‘Das Supera¨dificat’, para. 60.

25Cf. e.g. 1 Ob 565/84; JBl (1985), p. 107.

263 Ob 76/86; JBl (1987), p. 179; Rechberger and Oberhammer, ‘Das Supera¨difikat’, para. 59.

275 Ob 98/90; NZ (1992), p. 66 (Hofmeister); 5 Ob 116/91; NZ (1992), p. 243 (Hofmeister).

28Law on the Deposit of Documents Regarding Non-registered Land and Buildings; 3 Ob 130/87; JBl (1988), p. 578.

29See e.g. 3 Ob 76/86; JBl (1987), p. 179; Graf, ‘Supera¨difikate’, paras. 61 ff.

30See e.g. 3 Ob 130/87; JBl (1988), p. 578.

416 c a s e s t u d i e s

The desired results can also be achieved by arranging for A to maintain the ownership of the building site and for the developer to acquire ownership of the buildings that are erected. The developer then leases the buildings to A. A can also include in this lease an option to purchase the buildings when the developer or his/her successors wish to sell them (a right of first refusal), or whenever A wishes to exercise his/her option (the developer has an obligation to sell on demand), or at a given time (obligation to buy). Such an option must be registered in the Land Register in order to obtain protection. The developer may register his/ her rights over the buildings (Law on Registration of Property, s. 19) and the buildings may be charged separately. Contracts of this kind are frequently concluded.

A third possible solution is to sell the land and include an option for A to buy the land and the buildings at a later time. In the purchase agreement this option for A can be a right of first refusal, an obligation for the developer to sell on demand or an obligation on A to buy at a later fixed date. Of course, by choosing this method, A will not be able to control the erection of the buildings unless control mechanisms are included in the purchase agreement. These types of contracts are rare.

England

It is possible for A to grant B a so-called ‘building lease’, being a lease for which the consideration is the erection or improvement of buildings.32 A is able to retain control over the structural work by stipulating in covenants the type, nature and style of such buildings to be constructed.33 A building lease will incorporate repair and improvement as well as building from scratch (Law of Property Act, s. 99(9)). The effect of a building lease is usually that B is then able to enjoy the building, subject to repairing obligations, and so on.

France

Freedom of contract allows the parties to devise a suitable contract solely limited by mandatory rules. If A does not wish to undertake the construction, the developer of this structure will require money to finance the construction. The contract chosen must thus facilitate the

32See LPA, s. 205(1)(iii) for a statutory definition.

33See Hill and RedmanÕs Law of Landlord and Tenant, pp. A1428 ff.

procurement of bank financing which will be the case if A grants the developer a real right limited in time in respect of the land, which can be hypothecated.

A hereditary land lease (emphyteusis) meets this criterion, even if it does not, in essence, comprise the obligation to build, as is the case with the hereditary building lease for construction. The holder of the hereditary land lease is obliged to improve the land and to tidy up existing structures and even to erect new structures. Since the holder has a real right, he/she can hypothecate it as security for a loan to finance the project. The expiry of the hereditary land lease brings with it the automatic and immediate extinction of the real right under the lease.

The hereditary building lease (droit de superÞcie), which obliges the holder to improve the land by the erection of buildings and other structures on the land, is even better suited for this purpose. Like the holder of a hereditary land lease, the holder of a hereditary building lease has a real right which can be hypothecated (Code for Construction and Habitation, art. L 251–3). The holder is, however, in a position to offer a more solid security to the source of his/her funding, since the hypothec which will be granted stays in force for the term set at the beginning of the construction lease even if the lease is cancelled before the end of this term (art. L 251–6). The obligation on the holder may consist in the landowner-landlord receiving the structures or fractional shares in the structures, or of titles giving the right of ownership in or enjoyment of such structures which ideally suits A’s desire to recover, in the end, the full ownership of the land and the structures erected on the land.

The following possibilities must also be mentioned. Land concessions are regulated by the Law on Land Planning.34 This statute allows the owner of land to grant a concession to B for a term of at least twenty years to build on the land in return for payment of an annual rent (art. 48, para. 1, read with art. 50). The doctrinal writers have not reached agreement as to whether this right of B is a personal or a real right. This contract must be executed notarially and, since it is subject to the provisions pertaining to registration, it must be registered in the Land Register. Unless restrictions pertaining to the protection of the land and its surroundings have been agreed upon, the grantor (concessionaire) of the concession may choose the purpose for which he wants to exploit

34See the Law on Land Planning (Loi dÕorientation foncie`re), no. 67–1253 of 30 Dec. 1967, arts. 48–60.

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the property. The concessionaire can change or develop the property with the consent of the person who granted the concession. The latter is only entitled to refuse his/her consent for a legitimate reason. On termination of the contract, the owner must reimburse the concessionaire with the amount by which the completed structures have increased the value of the property (art. 54).

The contract to develop an industrial complex which is allowed under the principle of freedom of contract is complicated. Under this contract, the developer undertakes to design and build an industrial complex and hand over the keys to the landowner on completion of the complex. It is therefore designated as a ‘key in hand’ contract. Its purpose is the erection of an industrial complex that the developer undertakes to design and build.

A lease of land for restoration (Code for Construction and Habilitation, arts. L 252–1 to L 252–4) permits public or quasi-public organisations to lease property from landowners with the aim of restoring the property and renting it out as residential premises for the term of the lease. The duration of this contract must be at least twelve years, and it cannot be renewed tacitly. Under certain conditions, this lease may be assigned. It confers upon the organisation a real right which can be made the subject of a hypothec. At the end of the lease, the tenant must return vacant possession of the premises. The landowner can offer the previous occupants a lease of the premises or offer them alternative accommodation.

The French contract of trust (Þducie) must be distinguished from the common-law trust. This institution was introduced into French law by the Law of 19 February 2007 (Civil Code, arts. 2011 to 2031) and amended by Law no. 2008–776 of 4 August 2008 and by Ordonnance no. 2009–112 of 30 January 2009. It permits the settlor to transfer part of his/her patrimony to the ‘trustee’, subject to the latter acting in favour of a beneficiary for a fixed period of time (no more than ninety-nine years since the reform of 2008) and a specified purpose (Civil Code, art. 2011). Despite its wide definition, it is doubted whether this contract suits the situation described, since, even though the beneficiary can be the settlor himself (Civil Code, art. 2016), the settlor must be a legal person subject to corporate taxation (Civil Code, art. 2014) and the trustee must be a financial institution (Civil Code, art. 2015). Since the reform of 2008, a lawyer (avocat) may also be a trustee (Civil Code, art. 2015) and since article 2014 has been abolished the settlor may now also be a natural person.