If we told you that it is possible to sell your house encumbered by usufruct, and therefore to sell the bare ownership, would you know what we are talking about?
It must be admitted that the concept of bare ownership in the real estate sector appears to be apparently thorny, but perhaps only because it does not happen so often to have to deal with it.
However, rest assured: through practical examples, understanding all the steps will be very simple.
Here we have in fact created a practical guide that can allow you to delve into the subject of usufruct, and therefore of its bare ownership, without too many words.
It may actually happen that you have to deal with this particular mode of real estate transaction both as a potential seller and as a potential buyer.
What we will focus the reading on is, however, precisely the concept of “selling a house with usufruct” and, of course, everything that derives from this concept. So, if you are ready to untie the knots and arrive prepared for the possible sale, make yourself comfortable … we begin!
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Usufruct and bare ownership: let’s be clear
A first and obligatory step to explain how bare ownership works, we must dedicate it to the concept of usufruct.
These two rights are in fact closely linked to each other and for you, selling a house with usufruct without knowing the definition of bare ownership, would be practically impossible.
So let’s start right from here: usufruct is, by definition that particular agreement between the owner and a second subject defined as “naked owner”, who will enjoy the property under particular conditions.
It is therefore clear that following a more than logical condition, the two protagonists of this real estate operation must be two different people. Otherwise, however, if the subject were the same, it would be trivially property.
Here then comes the concept of bare ownership: selling a house with usufruct means making a second person enjoy the right of ownership who, however, will not be able to enjoy the property in question at least as long as the first owner remains alive.
Let’s explain ourselves better: with the transfer of the right of usufruct, the owner of the asset is defined as “naked owner”; that is, he always remains the sole owner of the asset itself, but with reduced powers. In fact, it is required to tolerate the presence of the usufructuary. This is why we use the definition of “naked owner”: it is an owner stripped of his main right, that of using the property.
Now it will certainly be clearer, therefore, that usufruct and bare ownership are actually two reverses of the same coin, or in this case of the same real estate situation: you just need to know their facets and understand hypothetical consequences before choosing the best solution with full knowledge of the facts.
Why should you want to sell a house with usufruct?
After clarifying the concepts of usufruct and bare ownership, you are probably wondering what could be the reasons that push a potential seller to choose this path.
In reality, it is good to specify that never as in this case, the reasons could really be the most disparate.
According to what is written in the previous paragraphs, it is possible to sell both the bare ownership and the usufruct of a property.
To better understand the two dynamics, let’s make some practical examples.
Selling the usufruct of a property: who can sell it and how it works
What could be the needs of life that push the owner of a property to want to sell a house with usufruct? As already partially anticipated, the needs naturally vary according to the cases of the private life of each one. But what does the sale of the usufruct consist of?
With the sale of the usufruct, the owner of the property remains so, but must vacate the property to allow it to be used by the usufructuary.
It is therefore clear that to sell the usufruct must be the same owner who completes the operation, together with a second subject called the usufructuary.
Subsequently, however, the usufructuary himself may grant his usufruct to third parties both for consideration and free of charge.
To understand this step even better, it is essential to specify, however, that the sale of the usufruct must have an “expiration date” in the contractual phase.
The maximum duration of the usufruct is the life of the usufructuary. If two parties agree to a usufruct with a duration of 20 years, but the usufructuary dies after just five years, the usufruct would never be transferred to his heirs and the asset would return to the rightful owner.
Selling bare ownership: who can sell it and how it works
Here we come to talk about the sale of bare ownership, which is nothing more than the reverse step compared to the sale of the usufruct.
The owner of a real estate could in fact also decide to sell the bare ownership and not the usufruct of his property. What is the difference?
Selling the bare ownership implies that the first owner can continue to live in the property, until his death, even if in effect, as soon as the contract is signed, the “real” owner will become whoever takes over.
Let’s explain it even better: the first owner retains the right to continue living inside his home until the usufruct expires (which can be equal to its own residual life) while transferring the ownership to a third party.
To clarify this further, let’s take a practical example.
If Grandma Tina decides to sell the bare ownership, Mr Rossi, despite acquiring full ownership of the property, will have to contractually respect the usufruct deadline, allowing Grandma Tina to continue to live in the property.
Who can sell bare ownership of an asset? Of course, grandmother Tina in the first place; subsequently, however, Mr. Rossi will also be able to enjoy this right, re-selling his title while respecting grandmother Tina’s initial usufruct agreements. Basically, if Grandma Tina decides to sell the bare property, no new buyer will be able to “send it away” until the agreement expires.
Let’s now see together some concrete cases in which you choose to sell a house with usufruct and why it is often the best move.
Elderly parents and children as property heirs: so then it is better to move forward…
It happens often and is actually also a very good thing, it must be admitted.
The tendency to exploit these particular real estate rights is more frequently used by families with elderly parents and more than one child to whom to assign the properties as an inheritance.
So then it happens that bare ownership is transferred to a child, maintaining the usufruct on one’s own property until death.
In this way, all you do is anticipate the hereditary division of your real estate assets. In fact, as soon as the usufructuary passes away, the son acquires full ownership of the property, without the need for a will.
Elderly people, without children: a smart choice for immediate liquidity
It could also happen that people who are now elderly and without children choose to sell the bare ownership of their property in order to obtain immediate liquidity in exchange, perhaps thinking of having to face expenses for medical treatment or other needs.
In this way, the elderly person in question, having no family to leave their home to, decides to sell the bare ownership of the house in order to recover the money to be allocated to their assistance.
Despite this, he will be able to live in the property by virtue of the usufruct until the end of his life, when full ownership and availability of the property will definitively pass to the buyer.
Making the most of a second home thanks to usufruct
Another aspect that often involves enjoying usufruct rights is precisely that of making the most of a second home that has not been used. What does this mean?
It means that anyone who does not want to come across the real estate lease segment could in fact think of selling the usufruct of that housing unit, to obtain liquidity and not to make the property deteriorate without losing the title of ownership.
Selling a house with usufruct: do you have clearer ideas?
We are sure that we have kept faith with the word given at the beginning of the reading: although it is a subject that is little dealt with and therefore still too little “known”, know that if you have real estate needs, which may be for sale or purchase, there are many other ways parallel to the more classic real estate sale.
The advice is of course to inform yourself adequately about every possible choice, to get the best results for your needs and not run into future problems.
The real estate world as you can see is vast, and there are many of those quibbles that an owner intent on selling or a buyer with a need to buy, must necessarily know before acting.
Relying on real estate professionals is certainly the recommended choice, but in parallel, through the web and authoritative sources, you will be able to arrive properly prepared at the moment.