USUFRUCTS: Ensuring family and friends have a roof over their head

USUFRUCTS: Ensuring family and friends have a roof over their head

A USUFRUCT can be described as a legal right which is given by an owner or prospective owner of property to someone else (known as the “usufructuary”) who is not the owner or prospective owner of that same property.

Author: Nikita Amy Lewis

A USUFRUCT can be described as a legal right which is given by an owner or prospective owner of property to someone else (known as the “usufructuary”) who is not the owner or prospective owner of that same property. This legal right grants the usufructuary the right to use and enjoy such property for a specific period of time or for their lifetime. This right is particularly reserved by a condition in the Original Title Deed.

What is a USUFRUCT?

It is commonly known to be included in wills where a spouse bequeaths their property to his or her child(ren) subject to the surviving spouse’s lifelong use and enjoyment thereof. Such surviving spouse may live on the property for the remainder of his or her life, and may enjoy it anyway they please, provided that he or she does not misuse it. However, one must take note that such right cannot be extended beyond the lifetime of the usufructuary. Furthermore, this right cannot be sold by the usufructuary to any other person, and upon the death of the usufructuary the right will terminate.

What most people are not aware of is that usufructuary rights, subject to the owners or prospective owners’ consent, can be extended to parents and other parties such as a family member or a close friend. Although such extension is possible, it has its own set of legal implications. Furthermore, one must distinguish between a lifelong usufruct being registered notarially and one that is not being registered notarially.

An example of a lifelong usufruct which does not need to be registered notarially, is where the right is granted to a surviving spouse in terms of a will where the deceased and surviving spouse were married in community of property, and were therefore co-owners of the property. If you are purchasing a property and would like a lifelong usufruct to be registered in favour of your parents who are married in community of property, it must be clearly stated in the Offer to Purchase (also known as the Deed of Sale). This can only occur if your parent(s) are both the owners of the property and are selling it to you. The same applies if your friends or family members are owners and are selling the property to you subject to a usufruct being registered in their favour.

A lifelong usufruct which must be registered notarially is where the right is granted to third parties to use and enjoy the property for their lifetime. These third parties are not the current owners of the property and are not selling the property to you. For example, parents who are married out of community of property and only one party is the owner of the property which you are purchasing. In these cases, a lifelong usufruct can be registered notarially in favour of the other parent. The Offer to Purchase must clearly state who will receive the lifelong usufruct. A usufructuary agreement must be entered into between the owner(s) or prospective owner(s) and the third party, which states that they agree to grant the third party a lifelong usufruct. Other notarial deeds and documents will also have to be signed by all parties and notarised by a Notary. The same applies if you would like to grant this right to your family members or friends where they are not the current owner(s) of the property.  Usufructs are there to protect your family and friends and provide them with a roof over their head when you pass on, or when they prefer to stay on the property but would like to sell it to you. It is important to note that the owners cannot sell or transfer the property without the usufructuary’s consent, and a usufructuary who was granted the right cannot sell the property either but they can rent it out. Furthermore, there are possible tax implications for the parties involved and one must consult with a professional financial adviser, tax legal practitioner or professional tax consultant.

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