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What is the right of usufruct?

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September 2, 2021

A usufruct is a real, non-saleable and non-inheritable property right that grants another person – the usufructuary – the right to make use of one or more assets which belong to someone else – the main proprietor – and to earn income such as rent from it without owning it himself.

A usufruct is a combination of the two property rights usus and fructus. Usus refers to the right to use something directly without damaging or altering it. Fructus refers to the right to enjoy the fruits of the property being used, which basically means profiting from the real property by leasing it, selling crops produced by it, charging admission to it, or similar. Still a usufructuary does not have full ownership of the property, because they do not enjoy the third property right, abusus, which refers to the right to consume, destroy, or transfer the ownership of a property to another person.

What is the difference between the right of residence and usufruct?

A usufruct keeps all rights open. At least economically the usufructuary remains entitled to use the property like an owner whereas someone who has “only a right to live” is not allowed to arrange renting, because the right to live applies exclusively to him alone.

How to obtain the right of usufruct

A usufruct can either be applied by law (as in case of Spanish inheritance rules) or voluntarily. Moreover, it can be total or a percentage, temporary or for a lifetime.

As an example, it is possible for a couple that owns a property jointly, thus 50% each, to choose in their Wills to leave their 50% to their children, but with a usufruct to their spouse. It allows the spouse to remain in the property until death and avoids the children of a previous marriage forcing you to leave the property if it is left to them. Nevertheless, there are tax implications as there may be taxes when inheriting a lifetime usufruct. Therefore, it should not be seen as a way of avoiding inheritance taxes.

How to terminate a usufruct

There are seven ways to terminate a usufruct:

  • Contractual conditions
  • Death of usufructuary (most common)
  • Loss of property (one of the most complicated methods)
  • Abuse by usufructuary
  • Prescription of non-use
  • Confusion
  • Renunciation

Furthermore, the following Articles need to be considered:
Art. 890 CC: usufruct terminates by remarriage or death, whichever comes first.
Art. 891 CC: usufruct terminates at death of both parents.
Art. 223 CC: usufruct terminates when child turns 18.

Written in collaboration with Natalie Efiamarho

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