
Usufruct and Right of Residence: What They Are and When It Is Appropriate to Establish Them
The term “usufruct” is familiar to many of us, but few truly understand what it means, when it applies, and what rights and obligations it entails. In this article, we explain in a simple and practical way what usufruct and the right of residence are, how they are established, where they apply, and we highlight important points that require attention in their practical implementation.
As a general rule, a property is fully owned by its registered owner. However, when a property is subject to usufruct, this results in a restriction of the absolute authority of the registered owner or, in other words, the bare owner.
Usufruct is a real right that grants the possibility of using and enjoying the fruits of a thing. In legal terminology, the term “thing” refers to an object that exists independently, is impersonal, and is subject to human control, such as a property. A typical example of use is cultivating land, and of enjoying its fruits is harvesting the products it yields.
When usufruct is established, a situation involving two parties is created: the owner and the usufructuary. The usufructuary is another person who retains the right to use and enjoy the property without owning it. In other words, the usufructuary may use and benefit from the property, even though it belongs to someone else the aforementioned owner, also known as the bare owner.
More specifically, regarding the rights of the usufructuary, they may use the property or rent it out and collect the income it generates. It is important to mention that, in case of income collection from the usufructed property, the usufructuary is obliged to bear the corresponding tax burden. However, they must preserve the substance and form of the property; that is, they cannot alter its character. For example, the usufructuary cannot demolish a house to turn it into a plot of land, nor can they convert a residence into a shop.
On the other hand, the bare owner, who is the legal owner of the property, does not have the right to enjoy the products from a cultivated field or to receive rents from leasing it. However, they remain responsible for paying the relevant property taxes and, in cases of significant damage, have the obligation to maintain it. Although the bare owner has the option to sell the property while it is subject to usufruct, such a move is generally disadvantageous since the actual sale value tends to decrease significantly when a property is encumbered with a usufruct right, as the new owner acquires a property they cannot use.
In contrast, the right of residence is a more limited right than usufruct. It offers only the possibility of residing in the property without the right to rent it out or further exploit it. It is granted personally to the beneficiary and, in some cases, to their family.
Both the right of usufruct and the right of residence are often mistakenly referred to as servitudes. This is incorrect because servitudes are registered on properties and not on persons, and because servitude requires the existence of two properties: a servient and a dominant property.
Both usufruct and the right of residence are personal rights and cannot be transferred or inherited. To activate these rights, it is necessary for them to be registered in the Land Registry, always with the consent of the legal owner. In practice, these rights are usually established for the lifetime of the beneficiary at the competent Land Registry Office and can be removed either with the consent of the beneficiary or upon their death.
In conclusion, both usufruct and the right of residence can prove extremely useful in cases where individuals wish to arrange their inheritance affairs and secure their real estate property for their children while also ensuring their own right to use and enjoy their property for the rest of their lives. Ultimately, as highlighted in this article, careful attention and proper legal guidance are required when registering usufruct and residence rights, with a focus on avoiding unnecessary disputes.
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