UNDERSTANDING USUFRUCTS OVER IMMOVABLE PROPERTY A usufruct is a real right which gives the holder (referred to as the “usufructuary”) in his personal capacity the right to the use, enjoyment and the fruits of a property owned by another person. In return, the usufructuary must exercise his rights reasonably in respect of the property and maintain the property at his own cost. The usufructuary is responsible for municipal rates and taxes but not for property insurance and he may not destroy, impair the value or change the character of the property in any way. A usufruct may be granted to a usufructuary during the life of the property owner but it is most commonly used as a means of providing for dependants after death. By way of example, a husband bequeaths his residential property to his children, but stipulates in his will that the bequest is subject to a usufruct in favour of his wife. In this way the children will receive the bare dominium in the property and the wife, as usufructuary, will benefit from the property for the duration of the usufruct, which may be for a specific period of time or linked to a future event (such as the death or remarriage of the usufructuary). Due to the personal nature of the right, a usufruct cannot be transferred by the holder to a third party, nor can it extend beyond the lifetime of the holder. The holder is however entitled to enter into certain agreements with third parties, such as lease agreements, provided that the period of the agreement does not extend beyond the duration of the usufruct. The owner’s rights to deal with the property are limited by the usufruct and the owner may not interfere with the use and enjoyment of the property by the usufructuary. The owner may however protect his interests should the usufructuary misuse the property. If the owner sells the property without the co-operation of the usufructuary, the property will remain subject to the usufruct. The owner and the usufructuary can sell the property jointly in which case it will be transferred free of the usufruct. Owners should also bear in mind that a bank will not grant bond finance over the property subject to the usufruct – the usufructuary will be required to waive their rights in favour of the bank. If the owner dies before the usufructuary, the bare dominium in the property will be transferred to his heirs subject to the usufruct. When the usufruct terminates the property must be returned to the owner in the same good condition in which it was received.
Posted on: Thu, 11 Sep 2014 10:35:14 +0000
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