The Lautereck Waterpalace was built in a widening of the Murr Valley, surrounded by the high, green-wooded Löwenstein Mountains. It was built by the Counts von Löwenstein who ruled the community of Sulzbach from the sixteenth century until 1867. The exact date of its construction is still unclear – one assumes the third quarter of the sixteenth century. It is known that the palace was in need of repair towards the end of the seventeenth century and some parts had to be renewed. From 1844 to 1939, the palace was in private hands. Subsequently, it was taken over by the Reich Labour Service and until 1945 served as accommodation for refugees, as a school and for other public purposes.

Originally the palace complex – to which a handsome garden and a sheep shed belonged – was “surrounded by a square, very broad, bricked moat, now mainly drained” (description from the administrative office from 1871). A bridge crossed the moat on the northern side. Today, all that remains of the moat is a flat depression. The curtain wall enclosing the courtyard with its gothic entrance and bridge, all of which can be seen on the old plans, no longer exists.