A usufruct is a real right that is registered over immovable property and gives a person, who is not the owner of the property, the right to use and enjoy the profits and advantages of the property. The profits and advantages are usually referred to as the fruits of the property and the holder of the usufruct is called the usufructuary.
The property owner may grant the usufruct to the usufructuary during his lifetime or after his death. The latter is the most common way and is used to provide for the property owner’s dependants after his death. For example, a husband leaves his immovable property to his child (the heir), but stipulates in his Will that the bequest to the child is subject to a usufruct in favour of his wife. As a result the child will be the bare dominium holder of the property and the wife, the holder of the usufruct, will be entitled to the use and enjoyment of the property for the duration of the usufruct.
The usufructuary must exercise his rights to use the immovable property in a reasonable manner. Municipal rates and taxes and daily maintenance costs are payable by the usufructuary and he must take care that the property is not damaged or changed in any way. Large scale maintenance due to wear and tear is the responsibility of the property owner or heir. The property owner or heir should also ensure that structural insurance is taken out in respect of the property. In the case of an heir the upkeep of the property and insurance premiums may cause financial strain as the heir may not be able to finance this. It is therefore important that the property owner take this into account and make provision in the Will (the husband in our example) for the maintenance of the property as this could put an unnecessary burden on the heir.
A usufruct limits a property owner’s rights to deal with the property. The owner has no right with regard to the use or enjoyment of the property by the usufructuary and should refrain himself from interfering. However, to protect the property owner’s interest in the property intervention may be necessary when the property is misused by the usufructuary. The property owner has a right to sell the property, but if done without the co-operation of the usufructuary, the property will be sold subject to the usufruct. On the other hand when the property is sold with the co-operation of the usufructuary the property will be transferred to the purchaser free of the usufruct. Furthermore when a property owner wishes to apply for a mortgage bond the bank will not approve the bond subject to the usufruct. The bank will require the usufructuary to waive his rights in favour of the bank.
The usufructuary may not transfer the usufruct to a third party. It is, however, possible for the usufructuary to enter into a lease agreement with a third party and receive rental income. This may be done on condition that the lease agreement does not extend beyond the duration of the usufruct.
The duration of the usufruct may be for a specific period of time or linked to the happening of a future event such as the death or remarriage of the usufructuary. When the usufruct terminates the usufructuary must hand over the property to the person who owns it in the same respectable condition in which it was received. In the event that the property owner passes away before the usufruct has terminated the bare dominium he holds in the property will be transferred to his heirs and will remain subject to the usufruct.
This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)
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