Lifelong right of residence and nursing home: Does it end, and who pays?

Does the right of residence end when you move into a nursing home?

As a rule, no. The right of residence is a limited personal servitude (beschränkte persönliche Dienstbarkeit). Under Section 1093(1) sentence 1 BGB, it is "the right … to use a building or part of a building as a dwelling to the exclusion of the owner". It is created by agreement and entry in the land register (Section 873(1) BGB).

For its end, Section 1090(2) BGB refers, among others, to Section 1061 BGB, which states: "The usufruct ends on the death of the usufructuary." The law does not name a move into a nursing home as a ground for extinction.

The Federal Court of Justice has confirmed this for the case of a move into a home:

• BGH, judgment of 13 July 2012, V ZR 206/11 (paras. 5 to 6): The right of residence continues to exist even if the holder can no longer exercise it because of her state of health. Extinction before death comes into consideration only exceptionally.
• BGH, judgment of 20 October 2020, X ZR 7/20 (para. 23): Admission to a nursing home does not generally lead to extinction.

Besides death, the right can end by cancellation (see below). The provisions read do not provide that the right of residence automatically turns into a monetary claim upon moving into a home. Whether your transfer agreement provides otherwise, and whether extinction before death exceptionally comes into consideration, depends on the individual case.

What may happen to the dwelling during the stay in the home

Without an agreement, the dwelling usually stays empty

Because the right exists "to the exclusion of the owner", the child as owner may not simply move into the rooms. If a supplementary interpretation of the contract is ruled out and there are no later agreements on use, the dwelling, according to the BGH, can be used "neither by the holder of the right of residence nor by the owner" (V ZR 206/11, para. 17). Whether your transfer agreement yields a different result by supplementary interpretation is a question to be examined in advice.

Admitting family and care staff

Section 1093(2) BGB allows the holder "to admit his family and the persons required for befitting service and for care into the dwelling". Whether this power also applies when the holder no longer lives there permanently is left open by the wording. This is a question to be examined in advice.

Leaving the dwelling to others only with permission

Section 1092(1) BGB reads: "A limited personal servitude is not transferable. The exercise of the servitude may be left to another only if leaving it is permitted."

According to the BGH, an obligation of the owner to permit such use subsequently arises, as a rule, neither from supplementary interpretation of the contract nor from good faith (V ZR 206/11, paras. 14 to 15). If one side lets the dwelling without authority, the other side, according to the BGH, generally cannot claim the rent, at least not on the basis of unjust enrichment (V ZR 206/11, headnote, paras. 9 to 10; X ZR 7/20, para. 30). Whether your transfer agreement yields a different result by supplementary interpretation is a question to be examined.

Who is entitled to the rent where leaving the dwelling to others is permitted is not governed by the wording of the law. You should therefore record this expressly in the agreement. This article does not cover the tax consequences of letting. How a usufruct affects children as owners by comparison is covered in the article on the disadvantages of usufruct for children.

Who bears the costs of the dwelling?

Section 1093(1) sentence 2 BGB declares certain usufruct provisions to apply accordingly, including Section 1041 BGB: "The usufructuary must ensure the preservation of the thing in its economic substance. Repairs and renewals are incumbent on him only insofar as they are part of the ordinary maintenance of the thing."

Who bears service charges, insurance or homeowners' association fees during the stay in the home does not follow conclusively from this wording. What the transfer agreement provides is decisive. Check this point specifically.

Who pays for the nursing home when there is a lifelong right of residence?

Care assistance only insofar as own funds cannot reasonably be expected

Section 61 sentence 1 SGB XII grants persons in need of care an "entitlement to care assistance insofar as they and their spouses or civil partners not living apart cannot reasonably be expected to raise the funds required for care assistance from income and assets …".

Under Section 82(1) sentence 1 SGB XII, income includes "all income in money or money's worth". Under Section 82(1) sentence 2 no. 11 SGB XII, income does not include, among other things, "receipts in money's worth that do not accrue in the context of gainful employment, the Federal Volunteer Service or a youth volunteer service". Under Section 90(1) SGB XII, "all realisable assets" must be used. Section 90(2) SGB XII exempts certain assets, and under subsection 3 social assistance may not be made dependent on the use of assets insofar as this "would constitute hardship" for the person who has to use the assets and for their dependants entitled to maintenance.

If rent in money actually accrues to the holder from permitted use by others, this is, according to the wording of Section 82(1) sentence 1 SGB XII, income in money; under Section 82(2) sentence 1 no. 4 SGB XII, "the necessary expenses connected with earning the income", among other things, are to be deducted. What remains open, however, is how the right of residence itself or compensation for its cancellation is to be classified. This article is not based on any read decision of a supreme court on this point. No assurance that the social welfare office will demand nothing can be derived from this.

Long-term care insurance benefits, nursing home fees and personal contributions are not covered by this article; no official source was available for them.

Claims under the transfer agreement

If the transfer agreement contains care or maintenance obligations, a supplementary interpretation of the contract can, according to the BGH, lead to a claim for a contribution to care costs to the extent of expenses saved. This requires, among other things, that the parties assumed when concluding the contract that the transferor could be cared for at home in old age and therefore made no provision for the case of a move into a retirement or nursing home. According to this decision, care and services that were to be provided in person are not replaced by a payment claim (BGH, judgment of 29 January 2010, V ZR 132/09, paras. 9, 10 and 12). Whether these conditions are met in your case is a question to be examined.

If the person entitled to benefits has, "for the period for which benefits are provided", a claim against another person "who is not a benefit provider within the meaning of Section 12 of Book One", the social assistance agency can, under Section 93(1) sentence 1 SGB XII, bring about "by written notice to the other person" that this claim passes to it "up to the amount of its expenditure". Under sentence 3, the transfer may be effected "only insofar as, had the other person performed in time, either the benefit would not have been provided or, in the cases of Section 19(5), reimbursement of expenses or a cost contribution would have to be paid". Under sentence 4, it is "not excluded by the fact that the claim cannot be assigned, pledged or attached". Whether such a claim against the owner exists in your case depends on the contract.

Children and maintenance for parents

Section 1601 BGB provides: "Relatives in the direct line are obliged to provide maintenance to one another." If the person entitled to benefits has such a maintenance claim for the period of the benefits, it passes, under Section 94(1) sentence 1 SGB XII, to the social assistance agency up to the amount of the expenditure incurred, insofar as Section 94 SGB XII does not exclude the transfer.

The important limit is in Section 94(1a) SGB XII: maintenance claims against children and parents "are not to be taken into account unless their annual total income within the meaning of Section 16 of Book Four exceeds EUR 100,000 in each case". The law presumes that this threshold is not exceeded. Under Section 94(1) sentence 3 SGB XII, a transfer is excluded where the persons are related in the second degree or further, for example grandchildren.

According to its wording, this income threshold applies to maintenance claims. The wording read of Section 93 SGB XII for other claims contains no corresponding threshold.

Reclaiming the original house transfer

Irrespective of the right of residence, an impoverished donor can reclaim a gift under the conditions of Sections 528 and 529 BGB, and this claim can become relevant for the social assistance agency. How this works for a house transfer is explained in the articles on the ten-year period for care after transferring a house and on gifts in the event of a need for care and the social welfare office.

Your options at a glance

Cancellation, waiver and deletion in the land register

How the right is cancelled

Under Section 875(1) BGB, cancellation requires "the declaration of the holder that he gives up the right, and the deletion of the right in the land register". The declaration must be made "to the land registry or to the person in whose favour it is made". Under land register law, Section 19 of the Land Register Code (GBO) applies: "An entry is made if the person whose right is affected by it consents to it."

Waiver without consideration: the key warning

The BGH has held that waiving a right of residence registered in rem is, as a rule, a benefit (Zuwendung) from the holder's assets even if the holder can permanently no longer exercise the right (X ZR 7/20, headnote). According to this decision, what must be surrendered is not the value of the right of residence to the holder, but the value the waiver has for the owner; it is regularly reflected in the increase in the market value of the property (paras. 39 to 40). Under the conditions of Sections 528 and 529 BGB, the social assistance agency can, according to this decision, assert the transferred claim for return under Section 528 BGB even if the need already existed before the waiver (paras. 42 to 43). According to the decision, however, the transferred claim exists only for the period from the waiver onwards (paras. 46 to 47).

For gift tax purposes, Section 7(1) no. 1 of the Inheritance and Gift Tax Act (ErbStG) treats as a gift "every gratuitous benefit between living persons insofar as the recipient is enriched by it at the expense of the donor". How a waiver is to be valued and whether tax is payable remains a question to be examined in the individual case.

Cancellation against compensation

Cancellation against compensation does not automatically avoid every consequence. Clarify in advance the amount of the compensation, to whom it accrues and how it is taken into account for care assistance. If the holder can no longer decide for themselves, an authorised representative or a court-appointed custodian (Betreuer) may act. Whether court approval is required for this should be clarified before any declaration is made.

Adjustment of the contract under Section 313 BGB

Section 313(1) BGB allows an adjustment if circumstances that have become the basis of the contract "have changed significantly after conclusion of the contract", the parties "would not have concluded the contract or would have concluded it with different content if they had foreseen this change", and holding one party to the unchanged contract "cannot reasonably be expected", "taking into account all the circumstances of the individual case, in particular the contractual or statutory distribution of risk". According to the BGH, this regularly fails in the case of a move into a home because the need for care outside the home is not an unforeseeable circumstance (V ZR 206/11, para. 7). Whether your case is different remains a question to be examined.

Deletion after death

A right limited to the lifetime of the holder may, after death and if arrears of performance are not excluded, be deleted only with the consent of the legal successor if the deletion is to take place before the end of one year or if the legal successor has objected (Section 23(1) GBO). This consent is not required if the land register contains an entry stating that proof of death suffices for deletion (Section 23(2) GBO).

Step by step: what families should clarify when a parent moves into a home

1. Review the documents. Land register extract and transfer agreement: scope of the right of residence, permission to leave the dwelling to others, provisions for a move into a home, allocation of costs, care or maintenance obligations, entry under Section 23(2) GBO.
2. Clarify representation. Can the holder still make valid decisions? If not: who holds a power of attorney or has been appointed, and is court approval required?
3. Do not cancel prematurely. Do not sign any consent to deletion before compensation, the risk of a claim for return and the tax consequences have been examined.
4. Settle the costs for the period of absence. Besides Section 1041 BGB, the contract counts. Record agreements in writing.
5. Decide on use. Leave it empty, admit relatives, or leave it to others with written permission, including the question of who is entitled to the rent.
6. Examine the social assistance position in advance. If care assistance may be needed, have it clarified before any agreement on use, cancellation or compensation how this will be taken into account in income and assets.
7. Have official letters reviewed promptly. An objection or an action for annulment against an administrative act that brings about the transfer of a claim has no suspensive effect (Section 93(3) SGB XII).

For future transfers: three questions for the notary appointment

If you still intend to hand over a house, you can consider this situation in advance. Three questions help for the meeting with the notary:

1. Should leaving the dwelling to others be permitted, and who is then entitled to any payments?
2. What should apply if the holder stays in a home permanently?
3. Should the land register contain an entry stating that proof of death suffices for deletion?

The detailed structuring is covered in the article on structuring the right of residence when handing over a house. An overview of the entire process is given in the guide to transferring a house; further articles can be found in the topic area on transferring a house.

Frequently asked questions

Does the right of residence end automatically when the holder moves into a nursing home?

No, not as a rule. The law links extinction to death (Section 1090(2) in conjunction with Section 1061 BGB), and the BGH has held that a permanent stay in a home does not, as a rule, end the right. Extinction before death comes into consideration only exceptionally and must be examined in the individual case.

May the child as owner use or let the empty dwelling?

If a supplementary interpretation of the transfer agreement is ruled out and there is no agreement, the dwelling, according to the BGH, can be used neither by the holder nor by the owner. Clarity is created by an agreement between both sides, which should also settle who is entitled to the rent.

Does the child have to pay for the nursing home because of the right of residence?

The provisions read on the right of residence contain no obligation of the owner to bear nursing home costs. Maintenance claims against children are to be taken into account under social assistance law only if their annual total income exceeds EUR 100,000 in each case (Section 94(1a) SGB XII). Claims under the transfer agreement and a possible reclaim of the gift must be examined separately.

Is waiving the right of residence a simple solution?

According to the BGH, a waiver without consideration is generally a benefit (Zuwendung) to the owner even if the holder can permanently no longer exercise the right. Under the conditions of Sections 528 and 529 BGB, a reclaim may then come into consideration, which, according to the BGH, the social assistance agency can also assert after transfer of the claim, even where the need already existed beforehand, but only for the period from the waiver onwards. You should therefore have compensation and the consequences under social assistance and tax law examined before signing the consent to deletion.

What applies to deletion after death?

If arrears of performance are not excluded, Section 23(1) GBO requires the consent of the legal successor if the deletion is to take place before the end of one year after death or if the successor has objected to the deletion at the land registry. If the land register contains an entry stating that proof of death suffices, this consent is not required (Section 23(2) GBO).

Sources, assumptions and limits of this article

Assumptions: This article concerns German law and a right of residence under Section 1093 BGB that is registered in the land register and granted for life, whose holder moves permanently into a nursing home. Status of legislation: retrieved from gesetze-im-internet.de on 12 October 2026. Your transfer agreement may contain different provisions, which may take precedence. Quotations from statutes are our English renderings of the German text; only the German wording is authoritative.

Deliberately left open: the classification of the right of residence itself and of any compensation as income or assets under social assistance law, the allocation of rent where leaving the dwelling to others is permitted, claims to rent under the transfer agreement in the case of unauthorised letting, the admission of relatives without the holder living there, the outcome of a supplementary interpretation of your transfer agreement, the valuation and taxation of a waiver, and any court approval required where a custodian has been appointed. This article does not state nursing home costs, personal contributions or long-term care insurance benefits.

Statutes:

• Section 313 BGB, Interference with the basis of the contract
• Section 528 BGB, Return due to impoverishment of the donor
• Section 529 BGB, Exclusion of the claim for return
• Section 873 BGB, Acquisition by agreement and registration
• Section 875 BGB, Cancellation of a right
• Section 1041 BGB, Preservation of the thing
• Section 1061 BGB, Death of the usufructuary
• Section 1090 BGB, Statutory content of the limited personal servitude
• Section 1092 BGB, Non-transferability; leaving the exercise to others
• Section 1093 BGB, Right of residence
• Section 1601 BGB, Persons obliged to provide maintenance
• Section 7 ErbStG, Gifts between living persons
• Section 19 GBO, Consent to entry
• Section 23 GBO, Deletion of rights for life
• Section 61 SGB XII, Persons entitled to care assistance
• Section 82 SGB XII, Definition of income
• Section 90 SGB XII, Assets to be used
• Section 93 SGB XII, Transfer of claims
• Section 94 SGB XII, Transfer of claims against persons liable for maintenance

Case law:

• BGH, judgment of 13 July 2012, V ZR 206/11
• BGH, judgment of 20 October 2020, X ZR 7/20, ECLI:DE:BGH:2020:201020UXZR7.20.0
• BGH, judgment of 29 January 2010, V ZR 132/09

This article provides a general overview and does not replace individual legal or tax advice. Which option suits your family depends on the contract, on the health and representation of the holder and on the financial situation of everyone involved. If you would like to have your situation assessed, you can arrange an initial consultation.