In countries like France and Belgium it is a very widespread alternative, although in Spain the concept of bare ownership remains largely unknown. The National Institute of Statistics indicates that in recent years only about 1,000 operations of this type have been carried out.
What is bare property?
Bare ownership is a legal concept according to which a person has the right to a thing of which he is the owner, but cannot use it. Therefore, although he owns the property, the possession and enjoyment of it is in the hands of a third party, who exercises what is known as the right of usufruct.
The owner of the right is called the “owner node”. That natural or legal person is the owner of the asset, but his/her powers to use it are very limited since he/she does not have the right of usufruct, so he/she cannot dispose of and enjoy the asset.
What is bare home ownership?
The concept of bare ownership is frequently applied to housing. In these cases, the usual thing is for the owner of the home to sell the bare property and reserve the right of usufruct. Generally these are older people who do not have heirs and need liquidity to meet their expenses.
Through this legal tool they become usufructuaries, ensuring the use of the home, almost always for the rest of their life, and receiving financial compensation in exchange for the property.
There are different sales modalities. The most common is to receive a single payment, although you can also collect a periodic annuity or even receive a part of the capital when signing the contract and collect the rest in the form of monthly income for life.
The entity or person who buys the home becomes the bare owner, but will not be able to enjoy it until the usufruct ends, generally after the death of the usufructuary, although there are also temporary contracts.
The rights of the bare owner
- Right to property, even if he cannot use or enjoy it.
- Right to sell the bare property, provided that the rights of the usufructuary are respected and his condition is maintained with the change of ownership.
- Right to mortgage bare property; That is, the bare owner can request a mortgage loan on the bare ownership of the home and if when the usufruct is extinguished, full ownership is consolidated, the mortgage will also extend to the usufruct, unless otherwise agreed.
- Right to carry out works and improvements, as long as they do not harm the usufructuary or reduce the value of the usufruct.
- Right to have the use and enjoyment of the property restored when the usufruct ends.
The obligations of the bare owner
- Assume the expenses of the sale, both the notary and registration costs and taxes. The only exception is the municipal capital gain, which is the responsibility of the seller.
- Respect the right of the usufructuary, so that he cannot do anything that harms it or alters the characteristics of the usufructuary property.
- Take care of extraordinary repairs to the property in bare ownership, especially if they are urgent.
- Pay the taxes and taxes corresponding to the usufruct property, with the exception of the Real Estate Tax, which will be borne by the usufructuary.
- Assume the contributions on the capital during the usufruct, although the usufructuary must pay the interest corresponding to the sums that he has paid. If the usufructuary has advanced them, he must receive the amount when the usufruct ends.
- Defray the mortgage of the usufruct property. In fact, if the property is seized or sold judicially to pay the debt, the owner must respond to the usufructuary for what he loses as a result.
- Take charge of community expenses, unless both agree that the expenses will be borne by the usufructuary.