When we talk about a house, words such as landlord, tenant, owner or tenant usually come to mind. We do not often think of other terms that may accompany a house, such as the usufruct of a house. Although almost all of the above words have to do with earning or spending money, the usufructuary simply acquires a right to enjoy something that does not necessarily belong to him or her.
Do you want to know more about this right and how it can be acquired? We will tell you everything you need to know in case you are ever named usufructuary of an asset.
What is the usufruct of a house?
We talk about a house because, normally, it is the property that is most often left in usufruct, but in reality it can be anything. It is the right (there is no obligation) to use and enjoy, in this case, a property, without being its owner. In order to enjoy this right, it is necessary that, when a person dies, he/she leaves a statement in his/her will that he/she wants someone else to be the usufructuary of one of his/her assets. The person chosen will become the usufructuary, while the real owner of the property will be the bare owner. He or she will be the owner of the property but will not be able to enjoy or command it. This type of situation is common in inheritances and wills. It has very specific legal conditions.
Although there are cases in which the right of usufruct can be for life, it normally has a limit of 30 years for legal entities (corporations, partnerships, companies, etc.). When this right is to a family or to the partner of the deceased person, it is usually for life. This concept can be applied both to ordinary dwellings and to common areas in residential communities, commercial premises, garages, etc.
If, as a usufructuary, you would like to live in the inherited property, for example, you would have no problem. As a usufructuary, any profits generated by the property would accrue to you, which is why many people who acquire this right rent out the property. They can earn income from the property unless the will has set limits on this right. However, not everything is positive: the usufructuary will have to bear the tax burden of the property when he inherits it. He or she will have to pay inheritance tax, property tax and other obligations.
One of them is to return the space in the same condition in which it was given. For this reason, before handing over the property, all the assets of the property are detailed and valued in order to know how everything was and what was there before anyone moved in or rented it. The maintenance and repair of the property will also be the responsibility of the usufructuary.
How is it obtained?
There are currently 3 options for obtaining the usufruct of a property:
- Inheritance: this is the most common option, since, by law, the widow or widower has the right to enjoy the usufruct of the property for life (for life). The children will never be able to evict the widow or widower from the property, who will have the right to use it and even to rent it. In this case, we will need to know how much this usufruct costs in order to know what taxes we have to pay. We leave you this article so that, if this is your case, you can calculate your own usufruct.
- Private contract: another option is to make a private contract governing the usufruct. Any living person can decide to make a private contract, they would only have to have it drawn up and establish the terms that they prefer. It is also possible to sign a usufruct during life, but this is not common.
- Prescription: this last option is also the least common. It may happen that a person who uses an asset for a certain number of years ends up becoming, by law, a usufructuary by prescription.
Rights and obligations of the usufructuary
Although the right of usufruct offers a great advantage (to dispose of an asset without being its owner), there are other rights that you should be aware of. As mentioned above, the usufructuary has the full right of use or enjoyment of the thing and may receive the natural, industrial and civil fruits of the accessions and easements. He may not, however, perceive the fruits of the products of the same or of the treasures, unless there is an agreement to the contrary.
Let us now turn to the obligations of the usufructuary:
- He must draw up an inventory before being able to enjoy the goods of the usufruct in question. He must appraise the movables and record their condition. This guarantees their restitution and, if necessary, compensation.
- With the exception of the parents, everyone is obliged to give a bond to guarantee that everything will be used sparingly. If there is a bond and there is any damage to the property, the person who caused the disaster must return to the owner his or her property, neither worsened nor deteriorated by his or her negligence.
- Payment of contributions and ordinary charges.
- The usufructuary shall be responsible for the indispensable repairs that the dwelling needs to maintain it in a basic condition. Unless this need arises from old age, intrinsic defect or serious deterioration prior to the usufruct.
He must inform the owner of the disturbance of his right.
Is it possible to buy the usufruct of a property?
Yes, it is possible to buy this right. But there are certain characteristics or conditions that are required for this to happen. If only the usufruct (and not the bare ownership) is purchased, the buyer’s right to it would end with the death of the first usufructuary (if for life) or with the expiry of the usufruct (if temporary).
It is also possible to acquire the usufruct of a property from the usufructuary and the bare ownership of the property from the bare owner. In this way, a single person would have both rights at the same time. He or she would have full ownership of the property. This means that, therefore, the right disappears, since he/she is the owner and can benefit from the property at the same time.
The bare owner can never sell the property without also having the right of usufruct over it. Likewise, the usufructuary cannot sell the freehold either, as technically he is not the owner. It is most profitable for both parties to sell each other’s rights to a third party by mutual agreement.
This third party would become the owner of the property without any limitations. It is also possible to acquire the usufruct of a property while already being the owners of the property in order to have full ownership of the property.
Whichever solution is chosen, the usufructuary will receive, by law, an economic consideration for the sale of his right. The concept of usufruct is a complex legal concept with a lot of twists and turns. We recommend that, if you find yourself in the position of enjoying this right, you hire the legal services of a team of lawyers to help you with any problems or doubts.
Can the usufruct of a property be extinguished?
The simple answer is: yes, the right of usufruct will eventually be extinguished. It can be due to ‘natural’ or ‘artificial’ causes. Let us look at the possible scenarios:
Death of the usufructuary. In the case of usufruct for life, the right is extinguished with the death of the usufructuary. There are, however, some exceptions, which are contained in Articles 521 and 781 of the Civil Code. The former explains that the usufruct in favour of several persons will not be extinguished until the death of all the usufructuaries. The second refers to the possibility of the death of the usufructuary. In this case, the usufruct is not transmitted to his heirs unless previously established by the parties.
Expiration of the term. The usufruct is extinguished naturally when the term for which the person constituted it expires. It can also be extinguished in case of fulfilment of the resolutory condition or if the usufructuary dies before the end of the term.
Consolidation of usufruct and bare ownership in the same person. We have explained above that it is possible for the right of usufruct and the right of bare ownership to be consolidated in a single person. This can be achieved by an agreement between the usufructuary and the bare owner. The usufructuary would receive a monetary consideration.
Renunciation of the usufructuary. It is possible, but not usual, that the usufructuary renounces the usufruct. In these cases, it is the bare owner to whom the powers of use and enjoyment of the dwelling are transferred. This case has some limitations: if the renunciation is made in fraud of creditors, rescission may be requested, and if the usufruct is mortgaged, the mortgage will not be extinguished until payment is made.
Total loss of the thing that is the object of the usufruct. Although it is logical, it is necessary to comment on it: if the thing object of the usufruct is lost, the right is lost. This loss can be partial or total. According to the Civil Code (article 1122) total loss refers to when it perishes and cannot be recovered. Article 514 of the Civil Code explains that if the property is lost only in part, the right of usufruct continues in the remaining part.
Termination of the right of the grantor. This means that no one can transfer further rights to another person over those he already has over the dwelling or property.
Prescription. This case is governed by the rules of extinctive prescription. In the case of real estate, a period of 30 years is set.
Forced expropriation. In this case, ownership is lost and the right of usufruct is extinguished. In the event that the property is expropriated for reasons of public utility, the owner has the right to be compensated for the expropriation. He has the option to:
- To have it exchanged for something else of equal value.
- To be paid the legal interest on the amount of the compensation during the time the usufruct is to last. If the owner chooses the second option, he must guarantee the payment of the claims.
If you are going through inheritance proceedings and need help and advice on the right of usufruct in a property or any other related issue, Blegal can provide you with an exclusive lawyer. We offer you a close and professional service tailored to your needs, with the advantages of working within the framework of a group of comprehensive services. More than 2,000 companies and businesses already trust us. You can contact our team and we will be delighted to help you in any way we can.
