In the world of business and investment, the term "usufructuary" is more common than one might think. To put it bluntly: the usufructuary is the person or company that obtains the right to use and benefit from an asset that legally belongs to another person. It can be real estate, land, agricultural property, or anything else. The usufructuary exploits that asset, reaps the benefits, but does not have ultimate ownership.
Who is involved? On the one hand, there is the usufructuary (the one who uses and benefits), and on the other, the bare owner, who holds ownership of the asset but cannot enjoy it while the usufruct lasts. In some cases, especially with life contracts, there is talk of the "bare owner," which is the same as the bare owner, but the term emphasizes that full ownership may only be exercised when the usufruct ends.
This agreement is formalized by contract and is regulated by law (yes, the Civil Code has everything detailed in articles 467 et seq., for those who want to look it up).
Key features to consider in the business context:
- Temporality: Usufruct always has a defined term—it can be for years or until the death of the usufructuary, but it is never indefinite.
- Right of use and enjoyment: The usufructuary may exploit the asset within the legal and contractual framework; for example, lease a property, cultivate crops, or collect rents.
- Use of fruits and benefits: In practical terms, all income, products, or benefits produced by the asset during the usufruct belong to the usufructuary. - Limitation of ownership: The usufructuary cannot sell, mortgage, or transfer ownership of the asset. They may, however, lease or assign their usufruct rights, provided this does not contravene the terms of the contract or applicable legal provisions.
Responsibilities of the usufructuary: Maintain the asset in optimal condition, cover maintenance costs, taxes, and routine repairs. Basically, they must operate the asset with discretion and responsibility, as any serious company seeking to protect its investment would.
And the bare owner? Their role is more passive during the usufruct. They retain ownership, but their rights are limited until the usufruct ends. Once it ends, they can recover the asset and exercise full control over it.
In short: the usufructuary is the person who operates the asset, the bare owner is the person who retains ownership, and both have clear rights and obligations. This is a useful legal concept for estate planning, investment strategies, or simply to maximize the use of an asset without transferring ownership. If the opportunity to negotiate a usufruct arises in your business environment, understanding these points will be key to making informed decisions.
Types of usufruct, executive and direct versions:
- By origin:
1. Legal usufruct: Here, the law establishes who has the right to the usufruct. For example, the surviving spouse may remain in the family home because the regulations so provide. It is not dependent on private agreements.
2. Voluntary usufruct: In this case, the usufruct is established by agreement between the owner and the usufructuary. The parties define the terms: duration, limits, rights, and obligations, all in accordance with the agreement.
- By duration:
1. Life term: The usufructuary enjoys the property for their entire life. Upon death, the usufruct automatically terminates.
2. Temporary term: A specific period or condition is established (for example, until the beneficiary reaches a certain age). Upon expiration of the term or condition, the usufruct ends. 3. Fixed-term: Similar to temporary, but with a specific period from the start. Upon reaching the expiration date, the usufruct ends.
- Conditional:
Some usufructs are subject to specific events. For example, the right can be maintained until the usufructuary marries, completes their studies, or retires. Once this event occurs, the usufruct is extinguished.
- Life with encumbrances:
Sometimes, a life usufruct comes with certain obligations. The usufructuary may be required to make payments, maintain the property, or meet certain requirements. Failure to do so could result in the loss of the usufruct prematurely.
Regarding the concepts of "inter vivos acts," "mortis causa," and "usufruct by adverse possession":
- Inter vivos acts: Usufruct is established through agreements between living persons, whether by contract, donation, or other legal acts.
- Mortis causa: Usufruct is granted after the death of the original owner, usually through a will or by legal inheritance.
- Usufruct by adverse possession: In certain cases, the right of usufruct can be acquired through the peaceful and continuous use and possession of the property for the period required by law, even if there is no formal deed of transfer.
In summary, these are the main types and forms of establishing usufruct in the legal and property sphere.
The right of usufruct is not indefinite; there are several circumstances under which it may be extinguished. The main reasons for termination are detailed below, in clear language but maintaining a professional approach:
1. Death of the usufructuary: If the usufruct is for life, it is automatically extinguished upon the death of the usufructuary. The asset returns to the original owner or the corresponding beneficiary.
2. Fulfillment of a term or condition: When the usufruct is established for a defined period or under a specific condition, once the term or condition is fulfilled, the right ends.
3. Renunciation by the usufructuary: The usufructuary may formally renounce their right through the corresponding legal act. In this case, the owner regains full control of the asset.
4. Consolidation of ownership: If a person combines ownership and usufruct of the asset, ownership is consolidated and the usufruct disappears.
5. Loss or destruction of the property: If the property subject to the usufruct is destroyed or permanently lost, the right is automatically extinguished as the object over which the usufruct could be exercised no longer exists.
6. Expropriation: If the property is expropriated for reasons of public utility or other legal reason, the usufruct is extinguished, although in some cases compensation may be available under applicable regulations.
7. Breach of obligations: If the usufructuary fails to fulfill his or her legal or contractual obligations, the owner has the right to request the termination of the usufruct and recover full disposition of the property.
Some additional considerations should be noted:
- If the waiver is made in fraud of creditors, rescission is possible.
- If the usufruct is mortgaged, the mortgage is not extinguished until the debt is settled.
- In the event of partial loss of the property, the usufruct continues over the remaining portion.
- If the person who established the usufruct loses their right to the property, the usufruct also expires.
- By statute of limitations: if the usufruct is not exercised within the legal time limits (6 years for movable property, 30 years for real estate), the right is lost.
- In compulsory expropriation, upon loss of ownership, the usufruct automatically expires.
In conclusion, usufruct is a temporary right subject to various causes of termination, each regulated by current legislation and the corresponding contractual agreements.
Let's put it in a more professional light, without losing clarity:
In a usufruct contract, the parties have well-defined roles, each with specific rights and responsibilities.
Rights of the usufructuary
1. The usufructuary has the right to use and enjoy the property according to its nature and purpose. They may exploit the property, provided they respect the legal and contractual limits.
2. He or she is entitled to receive the fruits, yields, or benefits generated by the property. This includes income from rent, crops, dividends, etc., during the term of the usufruct.
3. He or she is obligated to keep the property in good condition and make the necessary repairs for its ordinary maintenance.
4. He or she may make necessary improvements, provided they do not harm the rights of the bare owner and that the improvements remain on the property at the end of the usufruct.
5. In certain cases, the usufructuary may assign or lease his or her right to a third party, respecting legal limits and the rights of the owner.
Obligations of the usufructuary
- He or she must maintain the property, use it according to its intended purpose, bear the usual expenses (taxes, insurance, maintenance), and may not dispose of the main property; that is, he or she may not sell, transfer, or mortgage it.
Rights of the bare owner
1. He or she retains ownership of the property, even if he or she cannot use or enjoy it during the usufruct. 2. At the end of the usufruct, the owner regains full ownership and control of the property.
Obligations of the bare owner
- The owner must respect the usufructuary's rights and allow them to use and enjoy the property for the agreed term. Furthermore, the owner is responsible for any necessary extraordinary or structural repairs.
Valuation of Usufruct
The value of usufruct is relevant for purchase and sale transactions, inheritances, and tax settlements. For a temporary usufruct, it is usually calculated by applying 2% of the asset's value for each year of duration, with a minimum of 10% and a maximum of 70%. In a life usufruct, the calculation is adjusted based on the age of the usufructuary, in accordance with current tax regulations.
In short, usufruct is a legal concept that allows the use and ownership of an asset to be divided, establishing clear rights and obligations for both parties.